<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                      ------------------------------------
                                   Form 10-K
                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

<Table>
<S>         <C>                                                           <C>
(Mark One)

   [X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934
                      For the fiscal year ended March 31, 2004
                                         OR
   [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from        to
</Table>

                        Commission File Number 33-99970

<Table>
<S>                                            <C>
              AIRPLANES LIMITED                            AIRPLANES U.S. TRUST
  (Exact Name of Registrants as specified in memorandum of association or trust agreement)
           JERSEY, CHANNEL ISLANDS                               DELAWARE
               (State or other jurisdiction of incorporation or organization)
                    7359                                        13-3521640
                 (SIC Code)                        (I.R.S. Employer Identification No.)
              AIRPLANES LIMITED                            AIRPLANES U.S. TRUST
       22 GRENVILLE STREET, ST. HELIER                   1100 NORTH MARKET STREET,
               JERSEY, JE4 8PX                              RODNEY SQUARE NORTH
               CHANNEL ISLANDS                        WILMINGTON, DELAWARE 19890-0001
            (011 44 1534 609 000)                            (1-302-651-1000)
</Table>

    (Addresses and telephone numbers, including area codes, of Registrants'
                          principal executive offices)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT

<Table>
<Caption>
                                                           NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS                             ON WHICH REGISTERED
--------------------------------------------    --------------------------------------------
<S>                                             <C>
                    None                                            None
</Table>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT
                                      None

                                (Title of class)

  Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                        Yes [X]                      No [ ]

    Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 126-2)
                        Yes [X]                      No [ ]

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 or Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

    Aggregate market value of registrant's common stock held by non-affiliates:
$Nil.

    Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

<Table>
<Caption>
                                                                                          OUTSTANDING AT
ISSUER                                                       CLASS                        JUNE 14, 2004
------                                                       -----                        --------------
<S>                                      <C>                                              <C>
Airplanes Limited....................          Ordinary Shares, $1.00 par value                 30
</Table>

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--------------------------------------------------------------------------------
<PAGE>

                   AIRPLANES LIMITED AND AIRPLANES U.S. TRUST

                          2004 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                          PAGE
                                                                          ----
<S>         <C>                                                           <C>
PART I
  Item 1.   Business....................................................    3
  Item 2.   Properties..................................................   41
  Item 3.   Legal Proceedings...........................................   42
  Item 4.   Submission of Matters to a Vote of Security-Holders.........   42
PART II
  Item 5.   Market for Registrants' Common Equity and Related
            Stockholder Matters.........................................   43
  Item 6.   Selected Combined Financial Data............................   43
  Item 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations...................................   45
  Item 7A.  Quantitative and Qualitative Disclosures about Market
            Risks.......................................................   72
  Item 8.   Financial Statements and Supplementary Data.................   76
  Item 9.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure....................................   76
  Item 9A.  Controls and Procedures.....................................   76
PART III
  Item 10.  Directors and Executive Officers of the Registrants.........   77
  Item 11.  Executive Compensation......................................   86
  Item 12.  Security Ownership of Certain Beneficial Owners and
            Management..................................................   87
  Item 13.  Certain Relationships and Related Transactions..............   87
  Item 14.  Principal Accountant's Fees and Services....................   88
PART IV
  Item 15.  Exhibits, Financial Statement Schedules and Reports on Form
            8-K.........................................................   90
</Table>

                                        2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION

     Airplanes Limited ("AIRPLANES LIMITED") is a limited liability company
formed under the laws of Jersey, Channel Islands. Airplanes U.S. Trust
("AIRPLANES TRUST") is a Delaware business trust. "AIRPLANES GROUP" refers to
Airplanes Limited and Airplanes Trust, and in this report, we use "WE," "US" and
"OUR" to refer to Airplanes Group and its subsidiaries and Airplanes Pass
Through Trust. We are in the business of leasing aircraft to aircraft operators
around the world. At March 31, 2004, we owned 172 aircraft (the "AIRCRAFT"), 153
of which were on lease to 58 lessees in 35 countries. Our website contains
limited information and is found at http://www.airplanes-group.com/index.html.
Our website contains links to the SEC's website on which you can obtain
electronic copies of our periodic and current reports filed electronically with
the SEC free of charge.

     On March 28, 1996, we established eight separate pass through trusts to
issue and sell $4,048 million in aggregate principal amount of subclass A-1,
A-2, A-3, A-4 and A-5 and class B, C and D pass through certificates in an
underwritten offering. We used the proceeds from this offering, together with
the proceeds from the sale of the class E notes of Airplanes Limited and
Airplanes Trust to GPA Group plc (now known as debis AirFinance Ireland plc), to
acquire a portfolio of 229 aircraft from GPA Group and its subsidiaries. We use
the rental payments that we receive from leasing the aircraft to pay interest
and principal on this debt. On March 16, 1998, we established four additional
pass through trusts to issue and sell $2,437 million in aggregate principal
amount of subclass A-6, A-7 and A-8 and class B certificates in connection with
the refinancing of our subclass A-1, A-2 and A-3 and class B certificates. On
November 20, 1998, General Electric Capital Corporation ("GE CAPITAL") acquired
a majority of the class E notes from GPA Group (then known as AerFi Group and
now known as debis AirFinance Ireland) and its subsidiaries. On that date, a
subsidiary of AerFi Group also granted GE Capital an option to acquire the
residual interest in Airplanes Trust. See below at "Airplanes Trust" for more
information about the option. The subclass A-5 certificates were fully repaid as
of May 15, 1998. We established a new pass through trust on March 15, 2001 to
issue and sell $750 million in aggregate principal amount of subclass A-9
certificates which rank equally in right of payment with our outstanding
subclass A-6 and A-8 certificates. We used the proceeds from this offering to
refinance our subclass A-4 and A-7 certificates and the corresponding subclass
A-4 and A-7 notes.

AIRPLANES PASS THROUGH TRUST

     "AIRPLANES PASS THROUGH TRUST" and the "TRUST" refer to all the pass
through trusts created under the Airplanes Pass Through Trust Agreement dated
March 28, 1996, as supplemented (the "TRUST AGREEMENT") among Airplanes Limited,
Airplanes Trust and Bankers Trust Company (now known as Deutsche Bank Trust
Company Americas), as trustee (the "TRUSTEE"), except where it is clear that
this term means only a particular pass through trust. The certificates issued by
each pass through trust each represent a fractional undivided beneficial
interest in two corresponding classes or subclasses of notes issued and
cross-guaranteed by Airplanes Limited and Airplanes Trust pursuant to indentures
dated as of March 28, 1996 (as amended or supplemented, the "INDENTURES") they
entered into with Bankers Trust Company (now known as Deutsche Bank Trust
Company Americas), as trustee (the "INDENTURE TRUSTEE"), and held by that trust.
The two corresponding classes of notes and guarantees held by each trust are the
principal sources of payment for the class or subclass of certificates issued by
that trust.

AIRPLANES LIMITED

     Airplanes Limited is a special purpose limited liability company formed on
November 3, 1995 under the laws of Jersey, Channel Islands. Its sole purposes
are to (a) acquire, own, manage, maintain, lease, re-lease, modify and sell
(subject to restrictions under its indenture) the aircraft, (b) finance and
refinance these activities, including guaranteeing the obligations of its
subsidiaries and of Airplanes Trust, (c) manage its interest rate and currency
risks, and (d) engage in other activities related to the aircraft and their
financing.

                                        3
<PAGE>

     Airplanes Limited's principal assets are the intercompany loans it has
advanced to its subsidiaries and 95% of the capital stock of Airplanes Holdings
Limited. As of March 31, 2004, Airplanes Holdings owned a total of 159 aircraft
directly and through its aircraft-owning subsidiaries, and owned a number of
aircraft-leasing subsidiaries which lease aircraft from the aircraft-owning
subsidiaries and sublease them to lessees. The remaining 5% of the capital stock
of Airplanes Holdings is owned by GECAS. See below "Risk Factors -- Risks
Relating to Tax" for a discussion of the tax benefits of this 5% ownership by
GECAS and the risk of losing these benefits. Airplanes Limited has no ownership
or leasehold interests in any real property.

     For information on the capital stock of Airplanes Limited, including a
discussion of annual dividends, see "Item 5. Market for Registrants' Common
Equity and Related Shareholder Matters."

     Airplanes Limited has a board of directors, which is currently composed of
five directors. See "Item 10. Directors And Executive Officers Of The
Registrants -- Directors and Controlling Trustees" for details on these
directors. Airplanes Limited does not have any employees or executive management
of its own and relies solely on service providers to service, lease and re-lease
aircraft and perform other executive and administrative responsibilities. For a
description of the services provided by the service providers, see "Item 10.
Directors and Executive Officers of the Registrants -- The Servicer" and "-- The
Administrative Agent and Cash Manager."

     We have taken steps to structure Airplanes Limited and its acquisition of
the aircraft-owning and aircraft-leasing subsidiaries from GPA Group (now known
as debis AirFinance Ireland) in 1996 to ensure that its assets would not be
consolidated with the assets of debis AirFinance Ireland and would not otherwise
become available to its creditors in any bankruptcy or insolvency proceeding
involving debis AirFinance Ireland or any of its affiliates. For a description
of the risks if these steps are not effective, see below "Risk Factors -- Risks
Relating to Bankruptcy."

AIRPLANES TRUST

     Airplanes Trust is a Delaware statutory business trust formed in November
1995. Its sole purposes are to (a) acquire, own, manage, maintain, lease,
re-lease, modify and sell (subject to restrictions under its indenture) the
aircraft, (b) finance and refinance these activities, including guaranteeing the
obligations of its subsidiaries and of Airplanes Limited, (c) manage its
interest rate and currency risks and (d) engage in other activities related to
the aircraft and their financing.

     Airplanes Trust's principal assets are the intercompany loans it has
advanced to its subsidiaries and 100% of the capital stock of AeroUSA, which as
of March 31, 2004, owned 13 aircraft. The shares of AeroUSA and AeroUSA 3 are
held by separate voting trusts with First Security Bank of Utah, acting as
trustee, in order to satisfy the U.S. Federal Aviation Administration
regulations regarding the U.S. citizenship of the owners of U.S. registered
aircraft. Airplanes Trust has no ownership or leasehold interests in any real
property.

     debis AirFinance, Inc., a wholly-owned subsidiary of debis AirFinance
Ireland, holds the residual ownership interest in all of the property of
Airplanes Trust. In connection with the sale of the class E notes to GE Capital
by GPA Group (now known as debis AirFinance Ireland) and its subsidiaries in
1998, GPA, Inc. (now known as debis AirFinance, Inc.) granted an option to GE
Capital for it to purchase this residual ownership interest in Airplanes Trust
for $1.00. If GE Capital does not exercise this option before its expiry date,
which is 30 days after notice of the dissolution of the trust, the option will
become void. Upon repayment in full of all of the indebtedness of Airplanes
Trust and the dissolution of Airplanes Trust, legal title to the AeroUSA shares
and other property of Airplanes Trust will revert to debis AirFinance, Inc. or
GE Capital, if GE Capital has exercised its option.

     Airplanes Trust has five controlling trustees, who are the same individuals
as those who currently serve as directors of Airplanes Limited, and a Delaware
trustee, Wilmington Trust Company. For information on its management, see "Item
10. Directors and Executive Officers of the Registrants." Airplanes Trust does
not have any employees or executive officers of its own and relies solely on
service providers to service, lease and re-lease the aircraft and perform other
executive and administrative responsibilities. For a description of these
services, see "Item 10. Directors and Executive Officers of the Registrants --
The Servicer" and "-- The Administrative Agent and Cash Manager."
                                        4
<PAGE>

     We have taken steps to structure Airplanes Trust and its acquisition of the
aircraft-owning and aircraft-leasing subsidiaries from GPA Group (now known as
debis AirFinance Ireland) in 1996 to ensure that its assets would not be
consolidated with the assets of debis AirFinance Ireland and would not otherwise
become available to its creditors in any bankruptcy or insolvency proceeding
involving debis AirFinance Ireland or any of its affiliates. For a description
of the risks if these steps are not effective, see below "Risk Factors -- Risks
Relating to Bankruptcy."

RISK FACTORS

     The following summarizes various risks and uncertainties which may
materially affect the ability of Airplanes Limited and Airplanes Trust to pay
interest, principal or any premium on the notes and hence our ability to pay
interest, principal or any premium on our certificates in full at or before
their respective final maturity dates. We first describe how the difficulties
currently facing the airline industry have adversely affected our cashflows and
the effect these reduced cashflows has had and is likely to have on our ability
to make payments on the certificates. We then describe other risks which may
further adversely affect our cashflow. These risks and uncertainties are not the
only ones relevant to the certificates, the notes and guarantees, the trust or
Airplanes Group.

     This Form 10-K contains forward-looking statements that involve risks and
uncertainties. In most cases, you can identify these forward-looking statements
by terms such as "may," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," "continue" or similar terms that relate to
the future or express uncertainty. Our actual results could differ materially
from those anticipated in these forward-looking statements. In evaluating these
statements, you should specifically consider various factors, including the
risks outlined below, that may impact our results of operations.

RISKS RELATING TO PAYMENT ON THE NOTES AND CERTIFICATES

OUR REDUCED CASHFLOWS MEAN THAT WE ARE UNABLE TO MAKE PAYMENTS ON JUNIOR NOTES
AND CERTIFICATES.

     We have been unable to meet all of the base case assumptions either in our
original prospectus dated March 28, 1996 (the "1996 BASE CASE") or in our
prospectus dated March 8, 2001 (the "2001 BASE CASE"). In light of continued
lease restructurings and a weak leasing market generally, as more fully
discussed in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations", we are generating revenues at
significantly lower levels than we had assumed and at levels which have been
inadequate to pay minimum principal on the class A notes in full, or to pay any
interest or minimum principal on the class B notes or any interest on the class
C and class D notes, since the December 15, 2003 payment date. Even though, as a
result of the consent solicitation (described more fully in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations") we are now able to sell aircraft which we may not have been able to
sell previously, such sales in the current market are difficult to achieve and
where sales have been completed, they have not yielded sales proceeds sufficient
to repay a proportionate amount of the notes and certificates or even to make a
significant difference to our cashflow. On each payment date we are currently
only paying in full our administrative and lease expenses and certain other
payments in the ordinary course of business, interest on the class A notes and
swap payments, and the "First Collection Account Top-Up". We use any remaining
cashflows towards payment of minimum principal on the class A notes which at May
17, 2004 was $24.3 million in arrears. It is highly unlikely that we will ever
be able to resume making payments of interest or principal on the class B, C and
D notes.

BACKGROUND

Class A principal adjustment amount

     As a result of our low revenues and a greater than assumed decline in the
appraised value of the aircraft in our portfolio, we have been required to pay
class A principal adjustment amount to the extent of available
                                        5
<PAGE>

cashflows in order to maintain certain loan to current appraised value ratios on
the class A notes. We have not always had sufficient cashflows to pay class A
principal adjustment amount in full and since the April 15, 2003 payment date,
we have not had sufficient cashflows to pay any class A principal adjustment
amount, resulting in accumulating arrears. In the year to January 31, 2004,
there has been a decline of 15.21% in the appraised value of our fleet, being
$176 million greater than the decline assumed in setting the payment schedules
on our notes. This has resulted in an increase in the arrears of class A
principal adjustment amount from $343.5 million to $451.2 million at February
17, 2004 (the first payment date following the 2004 appraisals).

     Class A principal adjustment amount ranks ahead of scheduled principal
payments on the class C and D notes. If, on any payment date, we were unable to
make payment in full of class A principal adjustment amount, then by definition
we were unable to make any scheduled principal payments on the class C and D
notes. Between February 1999 and March 2000, we were unable to make some
scheduled principal payments on the class C and D notes and since April 2000 we
have not paid any scheduled principal on the class C and D notes (or paid any
minimum interest on the class E notes) which continues to be deferred.

Class A minimum principal amount

     To the extent that we have sufficient available funds, we are also required
to pay a minimum principal amount on the class A notes in order to maintain
certain loan to initial appraised value ratios. (Since class A minimum principal
amount is determined by reference to initial appraised values, it is unaffected
by the annual appraisals referred to above.) As a result of earlier payments of
class A principal adjustment amount described above we remained ahead of the
required class A minimum principal payment schedule. However as described above,
we have not always had sufficient cashflows to pay class A principal adjustment
amount in full and since the April 15, 2003 payment date, we have not had
sufficient cashflows to pay any class A principal adjustment amount. As a
result, since the August 15, 2003 payment date we have no longer been ahead of
the required class A minimum principal payment schedule. Therefore on that date
we had to recommence payments of minimum principal on the class A notes to the
extent of available cashflows and we were unable to fund the "Second Collection
Account Top-up" in full. Beginning on the December 15, 2003 payment date our
cashflows were insufficient to allocate any funds at all to the "Second
Collection Account Top-up" or to pay minimum principal on the class A notes in
full. Minimum principal arrears on the class A notes were $24.3 million
following the May 17, 2004 payment date. Since minimum principal on the class A
notes ranks ahead of interest and minimum principal on the class B notes and
interest on the class C and D notes in the priority of payments, our cashflows
have been inadequate to pay any interest or minimum principal on the class B
notes or any interest on the class C and D notes, since the December 15, 2003
payment date.

Class B, C and D notes

     It is highly unlikely that we will ever be able to resume making payments
of interest or principal on the class B, C and D notes. Given our failure to pay
interest when due on these notes beginning on the December 15, 2003 payment
date, interest has begun to accrue on the unpaid interest in accordance with the
terms of the notes and will continue to accrue until all interest arrears are
paid in full. Since interest (and minimum principal) on the class A notes is
payable prior to payment of interest and minimum/scheduled principal on the
class B, C and D notes (and all other amounts of principal on the class B, C and
D notes), available cashflows will be used first to service interest and, to the
extent possible, minimum principal on the class A notes. The minimum principal
arrears on the class A notes on each payment date have been and will continue to
be carried over to the next payment date causing the amount payable to increase
over time, making it more difficult to make payments in full. Even if cash were
available at any subsequent time to make payments ranking below class A minimum
principal, cashflows would first be used to pay interest on the class B notes,
which would then include all the accrued interest from the period when no
payments were made on these notes. Thus the likelihood of remaining cashflows
over the life of Airplanes Group being sufficient to resume any payments of
class B principal or any payments of interest or principal on the class C and,
ultimately, the class D notes is even further diminished.

     If we were able to resume making payments on the class B, C and D notes,
payments would be made according to the priority of payments, commencing with
the then most senior class and only making payments on more junior classes to
the extent of available cashflows. The more junior the class of notes is in the
order of
                                        6
<PAGE>

priority, the greater the risk that we would be unable to make further payments
on that class of notes. Our failure to make payments on a class of notes results
in failure to make payments on the corresponding class of certificates.

Ratings

     This vulnerability of the various classes of notes has been reflected in
actions taken by the rating agencies which continue to re-evaluate structured
aircraft financings.

     Set out in the table below are the ratings of our certificates at June 14,
2004:-

<Table>
<Caption>
                                                              OUTSTANDING
                                                               PRINCIPAL
                                                               BALANCE AS
                                                               AT MAY 17,                     MOODY'S (S&P
                        CERTIFICATE                               2004       S & P   FITCH     EQUIVALENT)
                        -----------                           ------------   -----   -----   ---------------
<S>                                                           <C>            <C>     <C>     <C>
Subclass A-6................................................    $ 74.5m      AA-     BBB-    A2 (A)
Subclass A-8................................................    $700.0m      A       BB      Baa3 (BBB-)
Subclass A-9................................................    $750.0m      BB+     BB      Ba2 (BB)
Class B.....................................................    $226.8m      D       CCC     Caa2 (CCC)
Class C.....................................................    $349.8m      D       CCC     Caa3 (CCC-)
Class D.....................................................    $395.1m      D       CC      Ca (CC)
</Table>

     Given the continuing difficulties in the aircraft industry and their impact
on the factors which determine our revenues, there can be no assurance that the
rating agencies will not further downgrade any class of our certificates.

     The ratings of the certificates address the likelihood of the timely
payment of interest and the ultimate payment of principal and premium, if any,
on the certificates. A rating is not a recommendation to buy, sell or hold
certificates because ratings do not comment as to market price or suitability
for a particular investor. A rating may be subject to revision, suspension or
withdrawal at any time by the assigning rating agency.

SUBORDINATION PROVISIONS RESTRICT THE RIGHTS OF JUNIOR NOTEHOLDERS AND
CERTIFICATE HOLDERS.

     In general, the rights and remedies with respect to a note event of default
are exercisable only by the trustee of and the holders of the most senior class
of notes outstanding, and then only to the extent that there is an event of
default with respect to that senior class of notes. For example, a failure to
make a required payment on a class of notes is a default only with respect to
that class of notes and the corresponding certificates. Accordingly, if, as
occurred on December 15, 2003, when we were unable to pay interest on the class
B, C and D notes, an event of default occurs with respect to a class of notes
which is not the most senior class outstanding, the holders of that class of
notes (and thus, the corresponding certificates) will not be permitted to
enforce their rights until all amounts owing under any more senior class of
notes outstanding and certain other amounts have been paid in full. The class A
notes are the most senior class of notes currently outstanding.

CERTIFICATEHOLDERS HAVE NO SECURITY INTEREST IN THE AIRCRAFT OR THE LEASES TO
SECURE OUR REPAYMENT OF THE CERTIFICATES.

     None of the certificateholders, the trustee or the security trustee has any
security interest, mortgage, charge or similar interest in any aircraft in our
portfolio or in the related leases. If an actionable event of default occurs,
neither the certificateholders nor anybody acting on their behalf can sell the
aircraft or exercise other remedies with respect to the aircraft or the leases
to repay the principal and interest, which they would have been able to do if
they had held a security interest in the aircraft or the leases. Airplanes
Limited and Airplanes Trust have, however, pledged to the security trustee, as
security for the notes and their other obligations, one-third of the ordinary
share capital of each of AeroUSA, Airplanes Holdings and their subsidiaries,
cash balances in the accounts and investments made with our cash balances.

                                        7
<PAGE>

THE TRUST HAS LIMITED SOURCES OF INCOME.

     The trust is a pass through trust. The principal assets of the trust are
the notes and guarantees, and its only sources of payment on the certificates
are payments by Airplanes Limited and Airplanes Trust on those notes and
guarantees, including proceeds from any disposition of them. If Airplanes
Limited and Airplanes Trust do not make payments on the notes and guarantees to
the trust, the trust has no other funds to make payments to certificateholders
on the certificates. The certificates and notes are not guaranteed by the
trustee, the security trustee, the indenture trustee, the servicer, the
administrative agent, the cash manager or any of their affiliates, and
certificateholders cannot look to them or anyone else to repay them if the trust
defaults in payment on the certificates.

AIRPLANES LIMITED AND AIRPLANES TRUST HAVE LIMITED SOURCES OF INCOME.

     The principal assets of Airplanes Limited and Airplanes Trust are shares of
their direct subsidiaries and intercompany loans to their direct and indirect
subsidiaries. Airplanes Limited and Airplanes Trust do not directly own any of
the aircraft and are dependent on payments and distributions from their
subsidiaries for their cashflow. If their subsidiaries do not make principal or
interest payments to Airplanes Limited and Airplanes Trust on the intercompany
loans, or if their subsidiaries do not make any distributions to them, Airplanes
Limited and Airplanes Trust would have less cash available to make payments to
the trust on the notes or guarantees. Also, if withholding or other taxes are
imposed on payments or distributions to Airplanes Limited and Airplanes Trust,
or if other significant tax liabilities arise, Airplanes Limited and Airplanes
Trust would have less cash available to make payments to the trust. In these
circumstances, the trust's cashflows would be further reduced.

AIRPLANES LIMITED AND AIRPLANES TRUST HAVE OTHER CLAIMS THAT RANK SENIOR TO THE
NOTES AND GUARANTEES.

     Airplanes Limited and Airplanes Trust have guaranteed a significant number
of their respective subsidiaries' obligations to lessees. Payments on these
guarantees will be treated as lease expenses and will rank ahead of other
payment obligations of Airplanes Limited and Airplanes Trust.

CLAIMS ON OUR SUBSIDIARIES ARE EFFECTIVELY SENIOR TO THE CLAIMS OF
CERTIFICATEHOLDERS ON AIRPLANES LIMITED AND AIRPLANES TRUST, AND OUR
SUBSIDIARIES MAY HAVE MATERIAL CONTINGENT LIABILITIES UNKNOWN TO US.

     Any claims on the subsidiaries of Airplanes Limited and Airplanes Trust are
effectively senior to the notes and guarantees because the subsidiaries would
generally have to make payments on those claims before making payments or
distributions to Airplanes Limited and Airplanes Trust. These claims include any
payment obligations to lessees and other contingent liabilities, such as
liabilities to third parties from operating and leasing the aircraft. There may
also be liabilities of this type that arose before we acquired our subsidiaries
from GPA Group (now known as debis AirFinance Ireland) in 1996 of which we are
not aware. If the subsidiaries are called upon to pay any of these contingent
liabilities, our cashflows would be further reduced.

THERE IS NO PUBLIC MARKET FOR THE CERTIFICATES.

     The certificates have a limited trading market which may harm
certificateholders' ability to sell them or depress the price at which
certificateholders sell them. The certificates are listed only on the Luxembourg
Stock Exchange. No one has an obligation to make a market in the certificates.
We do not intend to seek approval for quotation through any automated quotation
system. Future trading prices for the certificates depend on many factors,
including general economic conditions, our financial condition, performance and
prospects and the market's then current perception of the commercial aircraft
industry and the operating lease business generally.

                                        8
<PAGE>

RISKS RELATING TO AIRPLANES GROUP AND THIRD PARTIES

WE HAVE A HISTORY OF INCURRING NET LOSSES IN OUR OPERATIONS.

     Airplanes Group has incurred net losses since its inception and expects to
continue to incur substantial and increasing net losses. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" for a further discussion of these net losses.

WE HAVE NO MANAGEMENT RESOURCES AND DEPEND ON SERVICE PROVIDERS TO OPERATE OUR
BUSINESS AND COLLECT OUR REVENUES.

     We have no employees or executive management resources of our own and rely
solely on the servicer, administrative agent, cash manager and other service
providers for all aircraft servicing, leasing, re-leasing, sales and other
executive and administrative functions relating to our portfolio. If these
service providers do not perform their contractual obligations to us, our
operations and cashflow may suffer, thereby adversely affecting the timing of
payments on, and ultimate repayment of, the certificates. We may find it
difficult to recover damages for any of these third parties' poor performance
pursuant to their contracts and may not be able to terminate these contracts by
ourselves. In particular, our rights to terminate the servicing agreement are
very limited. We cannot guarantee that we will continue our arrangements with
the existing service providers or that they will continue their relationship
with us until the certificates are paid in full. If a service provider resigns
or if we terminate any service provider, we may be unable to find a suitable
replacement that we can engage on suitable terms, which would harm our
operations and impede our cashflow. The appointment of replacement service
providers may also cause the rating agencies to lower or withdraw the ratings on
the certificates. You should refer to "Item 10. Directors and Executive Officers
of the Registrants" for more detailed information on the responsibilities we
have delegated to the service providers.

THE SERVICER WILL NOT BE LIABLE TO US FOR LOSSES WE INCUR IN CONNECTION WITH ITS
PERFORMANCE OF THE SERVICES.

     The servicer will not be liable to us for losses we incur in connection
with its performance of the services, except where a court has finally
adjudicated that the losses have been directly caused by the servicer's willful
misconduct or gross negligence. In addition, we have agreed to indemnify the
servicer on an after-tax basis for a broad range of losses in connection with
its performance of the services. Any such indemnification payments would rank
senior to payments on the notes and certificates, which would further reduce
available cashflow.

WE DEPEND ON SWAP COUNTERPARTIES IN MANAGING INTEREST RATE RISKS. IF OUR SWAP
COUNTERPARTIES DEFAULT, OR IF WE ARE UNABLE TO FIND ELIGIBLE SWAP
COUNTERPARTIES, THERE MAY BE A MISMATCH BETWEEN OUR FIXED AND FLOATING RATE
ASSETS AND LIABILITIES WHICH COULD REDUCE OUR CASHFLOW.

     We manage interest rate risks arising from any mismatch between fixed and
floating rate lease rental receipts and our floating rate interest obligations
(the only interest obligations we are currently able to pay) through swaps and
other derivative instruments. This strategy for managing interest rate risks is
dependent upon our ability to enter into interest rate swaps with eligible
counterparties and on the counterparties fulfilling their contractual
obligations. If a counterparty defaults or if we are unable to find eligible
counterparties willing to enter into interest rate swaps with us because of our
financial condition, a mismatch between our floating rate interest obligations
and our fixed and floating rate lease receipts may arise, which could further
harm our cashflow.

     As further discussed under "Item 7A. Quantitative and Qualitative
Disclosures about Market Risks -- Interest Rate Risk and Management" we have
reviewed and modified our hedging policy with the approval of the rating
agencies and no longer enter into hedges of the class B notes and certificates
as we ceased payments of interest on these notes and certificates on the
November 17, 2003 payment date. We believe it prudent to continue to hedge our
interest rate exposure in respect of the class A notes and certificates as the
mix of fixed and floating rental receipts does not correlate to the floating
payments due on the class A notes and certificates. Our cashflows are
insufficient to enable any funds to be allocated to the "Second Collection
Account Top-up" in the priority of payments. Therefore, we have not included
this cash balance in our hedging calculations since the end of 2003.
                                        9
<PAGE>

     Our indentures required that any counterparty with whom we enter into a
swap have at least a short-term unsecured debt rating of A-1+ from Standard &
Poor's and a long-term unsecured debt rating of A1 from Moody's. It was proving
increasingly difficult to find counterparties meeting these requirements and
therefore, as further described under "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Recent
Developments", the board of directors of Airplanes Limited and the controlling
trustees of Airplanes Trust resolved to undertake a consent solicitation
seeking, among other things, to amend the indentures so as to reduce the
required rating for a swap counterparty to a short-term unsecured debt rating of
at least A-1 from Standard & Poor's and a long-term unsecured debt rating of at
least A2 from Moody's or otherwise as approved by the Board with the prior
agreement of the rating agencies. The consent solicitation was successful and
the indentures accordingly amended in September 2003. We believe that the
amendment to the indentures should help us to identify eligible counterparties
to enter into interest rate swaps to hedge our interest rate exposure in respect
of the class A notes and certificates. However, because of our financial
condition, we may nevertheless be unable to find counterparties willing to enter
into swaps with us, and/or it may become more expensive for us to enter into
swaps with eligible counterparties.

GECAS, THE SERVICER, MAY HAVE CONFLICTS OF INTEREST IN MANAGING OUR PORTFOLIO AS
A RESULT OF ITS OTHER AIRCRAFT MANAGEMENT ACTIVITIES.

     In addition to acting as the servicer for Airplanes Group, GECAS manages a
large portfolio of aircraft owned by its affiliates, including the GE group of
companies, and third parties, including other securitization vehicles such as
Lease Investment Flight Trust and Aircraft Finance Trust. GECAS also arranges
aircraft or engine financings and other lease transactions and GE Capital, an
affiliate of GECAS, is the owner of the class E notes. GECAS may therefore face
conflicts of interest in managing and marketing our portfolio for re-lease or
sale. The aircraft it manages for itself or others may compete with our aircraft
when they are being marketed for re-lease or sale. These conflicts will arise as
decisions affecting some aircraft that GECAS is managing or that GECAS or one of
its affiliates owns may be adverse to other aircraft also managed by GECAS. The
servicing agreement provides that the standard of care applicable in cases where
such conflicts arise requires that GECAS not discriminate between aircraft on an
unreasonable basis. For a fuller description of the standard of care, see "Item
10. Directors and Executive Officers of the Registrants -- The Servicer -- The
Servicing Agreement." While GECAS has agreed to perform the services for us with
reasonable care and diligence at all times, GECAS may give preference to its
affiliates and other third parties under the terms of its other marketing and
servicing arrangements. In addition, GECAS is not obliged to inform us of any
conflicts of interest of which it is aware. If, as a result of a conflict of
interest, GECAS makes a decision potentially adverse to us, it could have a
material adverse effect on the servicing of our aircraft, which may cause
additional reductions in our cashflow, see "Item 10. Directors and Executive
Officers of the Registrants -- The Servicer" for more information on the
activities of the servicer.

THE ADMINISTRATIVE AGENT AND CASH MANAGER MAY HAVE CONFLICTS OF INTEREST BECAUSE
OF THEIR PARENT COMPANIES' OTHER AIRCRAFT MANAGEMENT ACTIVITIES AND OWNERSHIP
INTERESTS.

     debis AirFinance B.V. and debis AirFinance Ireland, parent companies of the
administrative agent and the cash manager, manage a large portfolio of aircraft
owned by themselves, their affiliates and third parties. debis AirFinance
Ireland also acts as the servicer for AerCo Limited, a securitization vehicle
similar to Airplanes Group, and currently holds substantially all of the class
D-2, E-1 and E-2 notes issued by AerCo. Subsidiaries of debis AirFinance Ireland
also act as administrative agent and cash manager for AerCo. As a result, the
administrative agent and the cash manager of Airplanes Group may from time to
time have conflicts of interest in performing their obligations to Airplanes
Group. While the roles of the administrative agent and the cash manager are more
limited than those of the servicer, any conflicts of interest that they cannot
resolve could have an adverse impact on our cashflow.

                                        10
<PAGE>

OUR LEGAL COUNSEL MAY HAVE CONFLICTS OF INTEREST IN NEGOTIATING SOME OF OUR
AGREEMENTS BECAUSE THEY ALSO REPRESENT PARTIES WITH WHICH WE DEAL.

     Airplanes Group and debis AirFinance Ireland are represented by the same
Jersey, Irish and United States legal counsel, and we anticipate that this
multiple representation will continue. Our legal counsel may face conflicts of
interest when negotiating agreements between Airplanes Group and debis
AirFinance Ireland. If a significant dispute does arise in the future between
Airplanes Group and debis AirFinance Ireland or any of their respective
affiliates, we anticipate that we will retain separate counsel to represent us.

RISKS RELATING TO THE AIRCRAFT

THE COMMERCIAL AIRCRAFT MARKET IS CYCLICAL. DECREASED DEMAND FOR OR EXCESS
SUPPLY OF AIRCRAFT CAN DEPRESS AIRCRAFT VALUES AND LEASE RATES, WHICH MAY CAUSE
US TO BE UNABLE TO RE-LEASE OR SELL AIRCRAFT ON FAVORABLE TERMS AND CAN DECREASE
CASHFLOW.

     The market for commercial jet aircraft is cyclical and can produce sharp
increases or decreases in aircraft values and lease rates depending on the level
of supply or demand. During the past three years, there has been a general
downturn in the world economic climate, with a consequential negative impact on
the commercial aviation industry. The effects of this downturn were exacerbated
by the terrorist attacks of September 11, 2001, the military action of the U.S.
and its allies in Afghanistan, the war in Iraq, terrorist attacks in various
locations and the outbreak of Severe Acute Respiratory Syndrome (SARS). The
threat of terrorist attacks continues to deter air travel. The drop in passenger
demand has led to reductions in flight schedules and a consequent oversupply of
aircraft (including aircraft available for lease), as well as severe financial
difficulties for many airlines. Over the past three years, we have experienced
increased aircraft downtime, steeper than expected declines in lease rates,
additional lease restructurings, unanticipated redeliveries of aircraft with
associated costs, and a fall in the realizable value for aircraft (particularly
older technology models) in open market sales.

     Airlines increasingly prefer jet aircraft to turboprop aircraft, and new
generation Stage 3 aircraft to older Stage 3 aircraft (which make up a
significant proportion of our portfolio), and so the markets for these types of
aircraft remain unfavorable in terms of both aircraft values and lease rates.

     The conditions in the aircraft market depend upon, among other things, the
business cycle for the lessees and buyers, as well as general economic
conditions worldwide or in specific regions. The condition of the market at the
time when any of our aircraft are being marketed for re-lease or sale will
affect our ability to re-lease or sell those aircraft on satisfactory terms.
Unsatisfactory market conditions, particularly for older aircraft, such as those
we are currently experiencing, mean that the lease rates and, where applicable,
sales proceeds that we obtain are unfavorable and less than those assumed in the
2001 Base Case, resulting in decreased cashflows. We cannot predict when, if at
all for certain aircraft types, the market will recover.

THE AIRCRAFT VALUES AND LEASE RATES FOR AIRCRAFT MAY FLUCTUATE SIGNIFICANTLY
BECAUSE OF FACTORS OUTSIDE OUR CONTROL AND AFFECT OUR CASHFLOW.

     Decreases in aircraft values or lease rates cause a decrease in our
cashflows. Depending on market conditions, we may be unable to re-lease or sell
aircraft on terms that will allow us to make payments on the notes and
certificates. Aircraft values and lease rates depend on various factors that are
outside our control, including:

     -  general economic conditions affecting lessee operations as discussed
        above, including passenger demand and the cost of fuel and other
        expenses;

     -  the supply of and demand for used aircraft;

     -  manufacturer production levels and prices for new aircraft;

     -  interest rates, currency exchange rates and credit availability;

     -  retirement and obsolescence of aircraft models;
                                        11
<PAGE>

     -  re-introduction into service of aircraft previously in storage;

     -  governmental regulations; and

     -  lack of capacity in the aircraft traffic control system.

     Additional factors outside our control that may lead to sharp increases or
decreases in aircraft values or lease rates for specific aircraft include:

     -  manufacturer production levels and competition between aircraft
        manufacturers, such as the current competition between The Boeing
        Company and Airbus Industrie, which has led to an increased supply of
        new aircraft at lower prices;

     -  manufacturers merging or leaving the aircraft industry, such as the
        merger between Boeing and McDonnell Douglas and the bankruptcy of Fokker
        N.V., which has led to the termination of production of MD and Fokker
        aircraft and a resulting decrease in the values and lease rates for our
        MD and Fokker aircraft;

     -  the maintenance and operating history of the aircraft;

     -  the number of operators using a particular type of aircraft (which may
        be reduced by bankruptcy or industry consolidation) and the supply of
        that type of aircraft;

     -  legal or regulatory requirements that prevent or diminish the
        opportunity or ability to re-lease or sell that type of aircraft or make
        it more expensive to do so;

     -  the discovery of manufacturing defects in an aircraft model; and

     -  new regulatory requirements relating to an aircraft model.

THE CONCENTRATION OF AIRCRAFT TYPES IN OUR PORTFOLIO COULD MAGNIFY THE IMPACT OF
DECLINES IN LEASE RATES OR AIRCRAFT VALUES AND ADVERSELY AFFECT OUR CASHFLOW.

     As of March 31, 2004, each of the B737-400, MD-83 and A320-200 models of
aircraft comprised more than 10% of our portfolio by appraised value as of
January 31, 2004 and, in addition, each of the B737-300, B737-500, B767-300ER,
DC8, MD-11 and F-100 models of aircraft comprised more than 5% of our portfolio
by appraised value as of January 31, 2004. Furthermore, at March 31, 2004,
widebody aircraft comprised more than 15%, and turboprop aircraft comprised more
than 5% of our portfolio by appraised value as of January 31, 2004. The
concentration on particular models or types of aircraft magnifies the adverse
impact to our cashflow of a decline in lease rates or aircraft values for these
models or types of aircraft and of specific governmental or technical
regulations imposed on those aircraft types. In this connection, we have seen
(x) decreasing popularity of the turboprop aircraft, the cessation of production
of MD-83s and MD-11s, the reduction in demand for B767s including in particular
B767s powered by Pratt & Whitney engines, and the bankruptcy of Fokker, (y)
noise regulations restricting the use of Stage 2 aircraft which, as of March 31,
2004, accounted for approximately 1.4% of our portfolio by appraised value as of
January 31, 2004, and (z) Airworthiness Directives ("ADS") with respect to the
MD-80s, MD-11s and B737s, all as described more fully below in "-- The Aircraft,
Related Leases and Collateral." These events have caused, and are likely to
continue to cause, our overall lease rates and the aircraft values to
significantly decrease and may cause us to incur significant costs which would
further reduce our cashflow. Given the current oversupply of aircraft,
particularly newer types, the market for some of our older types of aircraft
such as MD-80s and F-100s may never recover to previous levels.

CURRENT APPRAISED VALUES OF THE AIRCRAFT ARE LOWER THAN THE VALUES NEEDED TO
REPAY A PROPORTIONATE AMOUNT OF THE NOTES AND CERTIFICATES AND THE ACTUAL MARKET
VALUE OF THE AIRCRAFT IS LESS THAN THE APPRAISED VALUE.

     The appraised values of the aircraft are determined based on the assumption
that there is an "open, unrestricted stable market environment with a reasonable
balance of supply and demand" and take into account long-term trends, including
current expectations of particular models becoming obsolete more quickly, as a
result
                                        12
<PAGE>

of airlines switching to different models or manufacturers ceasing production,
and expected declines in lease rates. Appraised values for an aircraft do not
necessarily reflect the market value for the aircraft at a specific time and you
should not rely on appraised values as an indication of the price that we could
obtain if we sold an aircraft. The aircraft market is cyclical and there may be
imbalances of supply and demand at any one time, especially for specific
aircraft types. At the high point in the industry cycle, the current market
value of some aircraft may be at or above their appraised values while the
current market value of others may be significantly less than their appraised
values. At a low point in the industry cycle such as we are experiencing
currently, the current market value of most aircraft types is generally less, or
in many cases, much less, than appraised values. As of the date of this Form
10-K the appraised value of each of our aircraft is higher and in some cases,
such as the MD-11s, significantly higher than its market value.

     The current appraised values of all of our aircraft are below and, in some
cases, significantly below, the values necessary to repay a proportionate amount
of the notes and certificates upon sale of such aircraft. In most cases we do
not expect the appraised values to recover. Because market values of our
aircraft have also declined significantly we were unable to meet certain
indenture requirements for aircraft sales. We therefore decided to have a
consent solicitation (see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Consent Solicitation for
Indenture Amendment") in order to amend the indentures to enable us to sell
aircraft free of such requirements where a sale is the best economic option for
an aircraft. As a result, when recommended to do so by the servicer and
administrative agent, we are currently selling aircraft at prices which cannot
repay a proportionate amount of the notes and certificates, but in circumstances
where we believe there are no existing or foreseeable better alternative
economic prospects for an aircraft. We believe that in such circumstances it is
better to realize what cash we can as soon as possible.

     Since we are no longer able to pay class A principal adjustment amount and
since, as a result of our consent solicitation, we are no longer required to
sell our aircraft at or above the note target price, the appraised values of our
aircraft are now of little significance except as a basis for providing
statistical information on the portfolio and for complying with certain
technical provisions in the indentures.

SOME OF OUR LESSEES MAY EXERCISE PURCHASE OPTIONS AT PRICES THAT ARE LESS THAN
THE PROPORTIONATE SHARE OF THE UNPAID PRINCIPAL OF THE NOTES AND CERTIFICATES
ALLOCABLE TO THE RELEVANT AIRCRAFT THEREBY REDUCING CASH AVAILABLE TO US TO MAKE
PAYMENTS ON THE NOTES AND CERTIFICATES.

     As of March 31, 2004, five lessees had options to purchase a total of 6
aircraft, representing 3.81% of our portfolio by appraised value as of January
31, 2004. The purchase price will be less than the proportionate share of the
unpaid principal of the notes and certificates allocable to the aircraft being
purchased. If those options are exercised, there could be additional reductions
in our cashflows.

WE MAY BE UNABLE TO REPOSSESS, RE-LEASE OR SELL THE AIRCRAFT IF THE LESSEES DO
NOT DISCHARGE LIENS ON THE AIRCRAFT, WHICH WOULD REDUCE OUR CASHFLOW.

     Liens which secure the payment of airport taxes, customs duties, air
navigation charges, landing charges, crew wages, repairer's charges or salvage
may attach to the aircraft in the normal course of operations. The sums which
these liens secure may be substantial and could exceed the value of the
aircraft. In some jurisdictions, a holder of aircraft liens may have the right
to detain, sell or cause the forfeiture of the aircraft. While our lessees are
generally required to discharge all liens arising during the term of their
leases, their failure to discharge any liens may impair our ability to
repossess, re-lease or sell the aircraft if the lessee defaults, which could
further reduce our cashflow.

OUR LESSEES MAY FAIL TO MAINTAIN REGISTRATION OF OUR AIRCRAFT, WHICH MAY AFFECT
THEIR ABILITY TO MAKE PAYMENTS TO US AND REDUCE OUR CASHFLOW.

     All aircraft in operation must be duly registered with an appropriate
aviation authority. If any lessee fails to maintain a valid registration of an
aircraft, the lessee operator or, in some cases, the owner or lessor may be
subject to penalties which may result in a lien being placed on the aircraft.
Loss of registration could also have

                                        13
<PAGE>

other adverse effects, including grounding of the aircraft and loss of
insurance, which may prevent the aircraft from generating cashflow.

THE AVAILABILITY OF NEWER, MORE TECHNOLOGICALLY ADVANCED AIRCRAFT MAY IMPAIR OUR
ABILITY TO RE-LEASE OR SELL AIRCRAFT AND REDUCE OUR CASHFLOW.

     The availability of newer, more technologically advanced aircraft could
adversely affect our ability to re-lease or sell our aircraft because lessees
and buyers of used aircraft tend to favor these newer, more technologically
advanced models. Within the last three years demand for some older narrowbody
Stage 3 aircraft, which make up a significant proportion of our portfolio, has
been adversely affected by the availability of new generation narrowbody Stage 3
aircraft. Although this risk is common to all aircraft lessors, it is
particularly significant for us because we have a comparatively older portfolio
(the weighted average age of the portfolio at March 31, 2004 by appraised value
as at January 31, 2004 is 13.08 years) and will need to re-lease all of our
aircraft at least once before the final maturity date of the certificates. Our
ability to manage these technological risks through modifications to aircraft is
limited by the significant costs of modifications and by the restrictions
imposed on modifications to aircraft under the indentures.

     In addition, in light of the age of our fleet, should the current
oversupply of aircraft continue in the longer term, our aircraft are highly
likely to become obsolete earlier than the useful life expectancies assumed in
the 2001 Base Case and/or it is highly likely that we will be unable to realize
the residual values assumed in the 2001 Base Case at the end of the useful lives
of certain of our aircraft.

INCREASED REGULATION OF THE AIRCRAFT INDUSTRY MAY CAUSE US TO INCUR MORE
EXPENSES OR MAY IMPAIR OUR ABILITY TO RE-LEASE OR SELL AIRCRAFT AND REDUCE OUR
CASHFLOW.

     The aircraft industry is heavily regulated and aviation authorities may
adopt additional regulations in jurisdictions where our aircraft are registered
or operate. In particular, governmental regulations, especially in North America
and Europe, impose increasingly strict noise and emissions levels and enhanced
safety and security requirements for aircraft, such as fire safety insulation,
traffic collision avoidance systems and emergency locator transmitters. We may
have to incur significant costs in order to comply with additional regulations.
In addition, because our portfolio is composed of a significant number of older
aircraft and we have a heavy concentration of some types of aircraft,
increasingly stringent noise or emissions regulations that disproportionately
affect older aircraft or particular types of aircraft, could have a significant
adverse impact on our results. We could incur significant costs in order to
comply with these regulations and aircraft that fail to comply with noise or
emissions regulations could be prohibited from flying into some jurisdictions,
which would adversely affect their values and lease rates. We will also incur
significant costs in connection with other U.S. Federal Aviation Administration
("FAA") regulations. For example, it will cost an estimated $12.3 million to
comply with the MD-11 and MD-80 fire safety regulations, $6.1 million of which
has been incurred to date in relation to fourteen aircraft.

RISKS RELATING TO THE LEASES AND CASHFLOW FROM LEASE PAYMENTS

OUR OPERATIONAL AND FINANCIAL RESTRICTIONS AFFECT OUR ABILITY TO COMPETE AND
GENERATE CASHFLOW.

     The indentures and constitutive documents of Airplanes Limited and
Airplanes Trust impose restrictions on how we operate our business. These
restrictions limit our ability to compete against other lessors who are not
subject to similar restrictions or who have greater financial resources than we
do. For example, we are not permitted to grant concessionary rental rates to
airlines in return for equity investments in the airlines. There are also
restrictions on potential lessees and limits on leasing to lessees in particular
geographic regions. Many competing aircraft lessors do not operate under similar
restrictions or have a stronger financial position or other strengths and
therefore have a competitive advantage over us when negotiating leases and
sales. These restrictions could further adversely affect the amount and timing
of cashflows.

                                        14
<PAGE>

     Additionally, prior to the amendments to the indentures following our
consent solicitation, as further discussed under "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Recent Developments", we could not have sold aircraft at prices below a
specified target price except in limited circumstances and in limited aggregate
amounts, which restricted our ability to sell aircraft to generate cashflow.
Following the consent solicitation we amended the indentures to permit sales
below note target price where the board of directors of Airplanes Limited or the
controlling trustees of Airplanes Trust, as applicable have unanimously
confirmed that such a sale is in the best interests of Airplanes Group and the
noteholders and certain other conditions are met.

     Whilst we expect that such an amendment of the indentures should help us
generate cash sales proceeds for aircraft that have little, if any, economic
future and enable us to eliminate expenditures on storage, insurance and
maintenance for those aircraft, we do not expect any such sales to yield
proceeds which are sufficient to pay a proportionate amount of the notes and
certificates.

OUR CASHFLOWS WILL BE ADVERSELY AFFECTED IF WE CANNOT RE-LEASE AIRCRAFT QUICKLY
AND ON FAVORABLE TERMS.

     We may not be able to re-lease the aircraft upon expiration or termination
of the leases without incurring significant downtime. If we cannot quickly
re-lease the aircraft, or if we cannot obtain favourable rates and lease terms
for the aircraft, our cashflows will be adversely affected. Our ability to
re-lease aircraft at acceptable lease rates and terms may suffer because of a
number of factors, including:

     -  economic conditions affecting the airline industry;

     -  the supply of competing aircraft and demand for particular aircraft
        types;

     -  increased bargaining power of lessees as they join global alliances with
        other airlines;

     -  reduced number of potential lessees as airlines consolidate or file for
        bankruptcy;

     -  competition from other lessors; and

     -  restrictions on our flexibility imposed by the indentures.

     For the reasons discussed above and in "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Recent
Developments" the airline industry is suffering some of the worst times in
aviation history. Our cashflows are suffering as a result of an oversupply of
aircraft for lease, increased aircraft downtime and an overall decline in lease
rates. We cannot predict when, if at all for certain aircraft types, the market
will recover to previous levels.

                                        15
<PAGE>

     The following table shows the number and type of aircraft as of March 31,
2004 that we must re-lease during the next five years. The table assumes that
(1) no lease terminates early, (2) there are no sales of aircraft and (3)
existing letters of intent will result in leases. Additional aircraft may need
to be re-leased if they become available through early terminations, if letters
of intent do not result in leases or if new leases are for short terms.

   AIRPLANES GROUP EXPECTED LEASE PLACEMENT REQUIREMENT AS OF MARCH 31, 2004

<Table>
<Caption>
                                                                  YEAR ENDING DECEMBER 31,
                                                            ------------------------------------
AIRCRAFT TYPE                                               2004    2005    2006    2007    2008
-------------                                               ----    ----    ----    ----    ----
<S>                                                         <C>     <C>     <C>     <C>     <C>
A300-B4-200.............................................      1      --      --      --      --
A300-C4-200.............................................     --       1      --      --      --
A320-200................................................      5      --      --       1       4
ATR42-300...............................................      3      --      --       1      --
B737-200A...............................................      4       4       4       1      --
B737-300................................................      1      --       6       1       1
B737-400................................................      4       9       3       2       2
B737-500................................................      2       4       3      --      --
B747-200SF..............................................     --      --      --      --      --
B757-200................................................     --       1       2      --      --
B767-200ER..............................................     --      --      --       1      --
B767-300ER..............................................     --       1      --       1       2
DC8-71F.................................................     11       6      --      --      --
DC8-73F.................................................      1      --      --      --      --
DC9-32..................................................      5      --      --      --      --
DHC8-100................................................      2       1       2      --       1
DHC8-300................................................      2       2       1       3       1
DHC8-300C...............................................      2      --      --      --      --
F-100...................................................     --       8      --       6       2
MD-11...................................................      3      --      --      --      --
MD-82...................................................     --      --       2      --      --
MD-83...................................................      5       2       4       7       4
MD-87...................................................      1      --      --      --      --
                                                            ---     ---     ---     ---     ---
Total...................................................     52      39      27      24      17
                                                            ===     ===     ===     ===     ===
</Table>

     Our longest lease is scheduled to expire in June 2014. Therefore we will be
required to re-lease all of our aircraft at least once before the final maturity
date for the certificates. We currently expect that the majority of our fleet
will prove difficult to re-lease because of the factors noted above,
particularly turboprop aircraft, older widebody aircraft, Stage 2 aircraft and
some older Stage 3 narrowbody aircraft. If we cannot on a timely basis re-lease
the aircraft that are coming off lease or can only re-lease them at lease rates
lower than the lease rates assumed in our 2001 Base Case, our cashflow will be
further reduced with the potential consequences described above under "-- Risks
Relating to Payment on the Notes and Certificates." There are currently 43
aircraft which are scheduled to come off lease within a year from March 31,
2004. Our forecasts assume that future lease rates for many of these aircraft
will be significantly lower than currently contracted rates.

WE MAY NOT BE ABLE TO OBTAIN REQUIRED LICENSES, CONSENTS AND APPROVALS, AND
CONSEQUENTLY OUR CASHFLOW MAY BE REDUCED.

     A number of lessees require specific licenses, consents or approvals for
different aspects of the lease. These include consents from governmental or
regulatory authorities to make payments under the leases and to the import,
re-export or de-registration of the aircraft. If they cannot obtain the required
governmental licenses, consents and approvals, if these requirements are
increased by subsequent changes in applicable law or administrative practice, or
if the licenses, consents or approvals are withdrawn, we may be unable to
re-lease or sell our aircraft. In that case, our cashflow would be further
reduced.
                                        16
<PAGE>

LESSEES MAY NOT PERFORM REQUIRED AIRCRAFT MAINTENANCE, CAUSING THE AIRCRAFT
VALUES AND LEASE RATES TO DECLINE AND THEREBY REDUCING OUR CASHFLOW.

     The standard of maintenance observed by our lessees and the condition of
the aircraft at the time of lease or sale may also affect the aircraft values
and lease rates on our aircraft. If a lessee fails to perform required or
recommended maintenance on an aircraft during the term of the lease or does not
comply with all applicable governmental requirements, the aircraft could be
grounded and we may incur substantial costs to restore the aircraft to an
acceptable maintenance condition before its re-lease or sale. Also, an
increasing number of lessees no longer provide any cash maintenance reserves. If
the lessees do not perform their maintenance obligations in any month, or if the
maintenance costs for any month exceed the maintenance payments made by the
lessees or are more than our maintenance reserves, we will have to fund these
maintenance costs out of cashflow from the leases for that month. As a result,
our cashflow may be volatile from month to month after paying significant
maintenance costs, especially as the aircraft age.

OUR AIRCRAFT INSURANCE MAY NOT BE AVAILABLE OR MAY NOT BE ADEQUATE TO COVER THE
LOSSES OR LIABILITIES WE INCUR, THEREBY REDUCING CASHFLOW.

     Our lessees are required under the leases to maintain property and
liability insurance covering their operation of the aircraft and to indemnify us
against any damages. Although we believe that the required levels of insurance
are prudent and reasonable in the context of industry experience and practice,
we cannot guarantee that losses and liabilities from one or more aviation
accidents and other catastrophic events will not exceed the insurance coverage
limits. If the proceeds of insurance held by the lessees or contingent policies
held by us do not cover the losses or liabilities we incur, or if our lessees
default in fulfilling their insurance or indemnification obligations, we would
have to cover these losses or liabilities which would further reduce our
cashflow.

     The effects of the events of September 11, 2001, have included, amongst
other things, increased insurance premiums required by the insurance markets. In
particular, airlines worldwide continue to experience difficulties in
maintaining war insurance cover and some other types of insurance cover in the
amounts required under their leases with us and other lessors. These insurance
issues have been mitigated in certain jurisdictions by a number of temporary
government schemes and the emergence of a limited available insurance market,
however, failure by a lessee to obtain adequate insurance cover as required
under its lease could result in the relevant aircraft being grounded. This would
likely further reduce our cashflows if, as a result, aircraft were returned
early and/or we do not receive rental payments from lessees which are affected
by such developments.

OUR HEDGING POLICY MAY NOT ADEQUATELY MANAGE OUR INTEREST RATE RISKS, INCLUDING
THE ASSOCIATED LESSEE CREDIT RISKS, AND WE MAY NOT BE ABLE TO PURCHASE AN
ADEQUATE PORTFOLIO OF SWAPTIONS IF REQUIRED TO MITIGATE OUR INTEREST RATE RISKS,
INCLUDING THE ASSOCIATED LESSEE CREDIT RISKS. IN THIS CASE, THERE COULD BE A
MISMATCH BETWEEN OUR FIXED AND FLOATING RATE ASSETS AND LIABILITIES WHICH COULD
REDUCE OUR CASHFLOW.

     We currently manage our interest rate risks, including the associated
lessee credit risks, through the use of swaps. In the past we have also hedged
the associated lessee credit risks through the use of swaptions. Following
consultation with the rating agencies in the year ended March 31, 2002, it is
not currently proposed to purchase any further swaptions primarily due to the
low interest rate environment and our current cashflow performance.

     If we are required by the rating agencies to purchase swaptions, the
premium would be payable at two points in the priority of payments under the
indentures. Fifty percent of any swaption premium in any month is a "minimum
hedge payment" and would be payable fourth in Airplanes Group's order of
priority of payments (ahead of class A minimum principal amount). The other 50%
of the premium is expended as a "supplemental hedge payment" and would be
payable seventeenth in Airplanes Group's order of priority of payments but given
our current cashflow performance it is highly unlikely we would ever be able to
make such payment.

     In light of our current financial condition and our current or future
ratings, we may also be unable to find counterparties willing to enter into
swaps with us. If our hedging policy does not adequately manage our interest
rate risks, including the associated lessee credit risks, we cannot find swap
counterparties or we do not have
                                        17
<PAGE>

sufficient cashflow to purchase the total amount of any swaptions required, a
mismatch between our floating rate interest obligations (the only interest
obligations we are currently able to pay) and fixed and floating rate lease
receipts may arise, which could further harm our cashflow. Additionally, because
of our financial condition the cost of entering into swaps may increase and
further reduce our cashflow.

     See "Item 7A. Quantitative and Qualitative Disclosures about Market Risks
-- Interest Rate Risk and Management" for a discussion of changes we have made
to our hedging policy.

WITHHOLDING TAXES MAY BE IMPOSED ON LEASE RENTALS, INCREASING OUR COSTS AND
REDUCING OUR CASHFLOW.

     We have tried to structure our leases so that either withholding taxes do
not apply to lease payments or, if withholding taxes do apply, the lessees are
obliged to pay corresponding additional amounts so that we always receive the
full lease payment. However, if withholding taxes must be paid and we cannot
recover additional amounts from the lessees, that would further reduce cashflow.

RISK OF LESSEE DEFAULT

LESSEES IN WEAK FINANCIAL CONDITION COULD FAIL TO MAKE LEASE PAYMENTS, CAUSING
OUR REVENUES TO FALL.

     There is a significant risk that lessees in weak financial condition may
default on their obligations under the leases. If lessees do not make rent and
maintenance payments or are significantly in arrears, our cashflow will be
further reduced. The ability of each lessee to perform its obligations under its
lease depends primarily on its financial condition, which may be affected by
many factors beyond its control, including competition, fare levels, passenger
demand, currency exchange rates, operating costs (including in particular fuel
and labor costs), cost and availability of financing, and environmental and
other governmental regulation. Because a substantial portion of business and,
especially, leisure airline travel is discretionary, the general economic
conditions of the geographic regions where our lessees operate also affects
their ability to meet their lease obligations. Since the majority of our leases
require lease payments in U.S. dollars, any weakness in the local currency in
which a lessee operates against the U.S. dollar could also adversely affect its
ability to pay us.

     The prolonged downturn in the airline industry has resulted in a number of
airlines experiencing severe financial difficulties. Some carriers, including
two of our largest lessees as measured by appraised value of aircraft on lease
to them (one Canadian and one Colombian) have filed for bankruptcy, while
others, including many of our lessees, continue to announce large losses or face
severe financial difficulties. We have agreed to rental holidays, rental
restructurings, the early return of aircraft and similar measures for a number
of lessees. You should expect that some of our current or future lessees will
continue to be in a weak financial position, and a sizeable proportion of our
lessees will continue to be in significant arrears on their rental or
maintenance payments at any particular time.

     The current level of defaults and arrears may not even be representative of
future defaults and arrears, and defaults and arrears may increase if the
airline industry faces continued difficulties. Some regions where our lessees
are based, such as Asia or Latin America, may be more susceptible than others to
economic downturns. See "-- The Aircraft, Related Leases and Collateral -- The
Lessees" below for a more detailed discussion of the regional concentrations of
our lessees and economic conditions which may impact their financial condition
and ability to perform their obligations to us. Whatever the cause, any
financial weakness on the part of our lessees may result in further reduced
cashflows.

WE MAY NOT BE ABLE TO TERMINATE LEASES OR REPOSSESS AIRCRAFT WHEN A LESSEE
DEFAULTS, CAUSING US TO INCUR UNEXPECTED REPOSSESSION COSTS THAT REDUCE OUR
CASHFLOW.

     If there is an event of default under a lease, we have the right to
terminate the lease and repossess the aircraft. However, it may be difficult,
expensive and time-consuming for us to enforce our rights in some circumstances,
especially if the lessee contests the termination or is bankrupt or under court
protection. Delays
                                        18
<PAGE>

resulting from proceedings to repossess an aircraft add to the period when the
aircraft is not generating cashflow for us. In addition, we may incur
significant costs in trying to repossess an aircraft and in performing
maintenance and other work necessary to make the aircraft available for re-lease
or sale, including retrieval or reconstruction of aircraft records. We may also
incur swap breakage costs. Our efforts to repossess an aircraft following a
lessee's default may also be limited by the laws of the local jurisdiction which
may delay or prevent repossession. If we do terminate a lease and repossess the
aircraft, we may be unable to re-lease the aircraft promptly and/or at a
satisfactory lease rate. All of this may further adversely affect our cashflow.

RISKS RELATING TO TAX

OWNING THE CERTIFICATES MAY HAVE TAX CONSEQUENCES FOR CERTIFICATEHOLDERS AND MAY
REDUCE CERTIFICATEHOLDERS' INCOME.

     Ownership of the certificates may subject certificateholders to withholding
of income taxes in the United States, Jersey or other jurisdictions in which
Airplanes Group, its aircraft-owning and aircraft-leasing subsidiaries and the
lessees are organized, reside or operate. The tax consequences of the purchase
and holding of the certificates depend to some extent upon certificateholders'
individual circumstances.

PRE-1998 AEROUSA LOSSES MAY NOT BE AVAILABLE TO OFFSET FUTURE TAXABLE INCOME OF
AEROUSA, AS A RESULT OF WHICH AEROUSA MAY HAVE TO PAY ADDITIONAL U.S. FEDERAL
INCOME TAX AND HAVE LESS CASHFLOW TO PAY AIRPLANES TRUST WHICH WILL HAVE LESS
CASH TO MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     AeroUSA had net operating loss carryforwards for U.S. federal income tax
purposes when GE Capital acquired all of the class E notes on November 20, 1998.
As a result of that acquisition, AeroUSA's pre-1998 net operating loss
carryforwards may only be utilized to offset up to $452,000 of taxable income
per year. To the extent that the pre-1998 net operating loss carryforwards are
not available to offset taxable income of AeroUSA in future years, AeroUSA will
be required to pay additional U.S. federal income tax which will reduce the
amount available to pay to Airplanes Trust and which will have a further
negative impact on the cashflow of Airplanes Trust.

AEROUSA MAY INCUR ADDITIONAL TAX LIABILITIES AS A RESULT OF FILING CONSOLIDATED
TAX RETURNS WITH GENERAL ELECTRIC COMPANY ("GE") OR DEBIS AIRFINANCE, INC. THERE
WILL BE A NEGATIVE IMPACT ON THE CASHFLOW OF AIRPLANES GROUP IF AEROUSA INCURS
ANY SUCH LIABILITIES.

     AeroUSA and its wholly owned subsidiary, AeroUSA 3 Inc. (together, the
"AEROUSA GROUP"), filed U.S. federal consolidated tax returns and certain state
and local tax returns with GPA, Inc. (now known as debis AirFinance, Inc.) and
its subsidiaries (together, the "DEBIS AIRFINANCE U.S. TAX GROUP") through
November 20, 1998. Since November 20, 1998, the AeroUSA group has filed U.S.
federal consolidated tax returns and certain state and local tax returns with GE
and its subsidiaries (together, the "GE U.S. TAX GROUP"). As members of the
consolidated tax groups, the AeroUSA group is jointly and severally liable for
the applicable U.S. federal or state and local tax liabilities of the debis
AirFinance U.S. tax group for the period through November 20, 1998 and of the GE
U.S. tax group for the period since November 20, 1998. There are no ongoing U.S.
federal, state and local tax audits with respect to taxes previously reported by
the debis AirFinance U.S. tax group.

     GE, AeroUSA and Airplanes Trust have entered into a tax sharing agreement
pursuant to which GE has agreed to indemnify members of the AeroUSA group
against any U.S. federal, state or local tax liabilities of any member of the GE
U.S. tax group (other than an AeroUSA group member) which are imposed on the
AeroUSA group that are related to any tax period or portion of a tax period
beginning after November 20, 1998 and are tax liabilities that the AeroUSA group
would not have incurred if they were not members of the GE U.S. tax group.
Furthermore, under this tax sharing agreement, (1) AeroUSA has agreed to pay GE
(in cash if a payment is then due by the GE U.S. tax group to a tax authority,
otherwise in the form of subordinated non-interest bearing notes) its share of
tax liabilities based on the amount of tax liabilities that the AeroUSA group
would have incurred if it were not included in the GE U.S. tax group and (2) GE
has agreed to pay AeroUSA, at the time such tax savings
                                        19
<PAGE>

are realized, an amount equal to any tax savings by any member of the GE U.S.
tax group (other than a member of the AeroUSA group) for any tax period after
November 20, 1998 as a result of any tax asset generated by the AeroUSA group.
Similar provisions contained in a tax sharing agreement between GPA Group (now
known as debis AirFinance Ireland), GPA, Inc. (now known as debis AirFinance,
Inc.), AeroUSA and Airplanes Trust which terminated on November 20, 1998 remain
applicable in respect of tax periods ending on or before November 20, 1998.

     The receipt by Airplanes Trust or AeroUSA of any amounts from GE, debis
AirFinance Ireland or debis AirFinance, Inc., as applicable, pursuant to the tax
sharing agreements will depend upon the financial condition and liquidity of GE,
debis AirFinance Ireland or debis AirFinance, Inc., as applicable, at the time
any claim is made. To the extent any tax claims are successfully made against
the AeroUSA group and those amounts are not indemnified by GE, debis AirFinance
Ireland or debis AirFinance, Inc. under the relevant tax sharing agreements,
those claims will have a negative impact on the cashflow of Airplanes Group. In
addition, because the notes and certificates are not secured directly or
indirectly by the aircraft or the leases, substantially all of the assets of the
AeroUSA group, including the aircraft, would be available for attachment and
satisfaction of any of those claims.

AIRPLANES LIMITED, AIRPLANES HOLDINGS AND AIRPLANES HOLDINGS' NON-U.S.
SUBSIDIARIES MAY BE SUBJECT TO U.S. FEDERAL INCOME TAX AS A RESULT OF ACTIONS OF
THE SERVICER OR ADMINISTRATIVE AGENT OR, IN THE CASE OF AIRPLANES HOLDINGS AND
ITS IRISH TAX RESIDENT AIRCRAFT OWNING SUBSIDIARIES, BECAUSE THEY MAY NOT
BENEFIT FROM THE U.S.-IRISH TAX TREATY, WHICH WOULD NEGATIVELY AFFECT THEIR
CASHFLOW.

     Whether Airplanes Limited, Airplanes Holdings and Airplanes Holdings'
non-U.S. subsidiaries will be subject to U.S. federal income tax may depend on
the manner in which the activities of the servicer and administrative agent are
performed, and in the case of Airplanes Holdings and its Irish tax resident
aircraft owning subsidiaries, will depend on qualification for the benefits of
the income tax treaty between the United States and Ireland (the "TREATY").

     Prior to GE Capital's acquisition of the class E notes, Airplanes Holdings
and its Irish tax resident aircraft owning subsidiaries qualified for treaty
benefits by virtue of a ruling obtained by AerFi Group (now known as debis
AirFinance Ireland) from the U.S. competent authority, which applied to AerFi
Group and its qualified affiliates. Following the acquisition of the class E
notes by GE Capital, Airplanes Holdings and its Irish tax resident aircraft
owning subsidiaries ceased to be affiliates of AerFi Group. Airplanes Holdings
applied for its own ruling on similar grounds to those on which the AerFi Group
ruling was based. On October 20, 2001, the ruling by the U.S. competent
authority was granted to Airplanes Holdings and its Irish tax resident aircraft
owning subsidiaries. There can be no assurance that the activities of the
servicer or the administrative agent will not subject Airplanes Limited,
Airplanes Holdings and Airplanes Holdings' non-U.S. subsidiaries to U.S. federal
income tax on some or all of their income in the future.

     In the event that Airplanes Limited, Airplanes Holdings or Airplanes
Holdings' non-U.S. subsidiaries are subject to U.S. federal income tax on some
or all of their income, their cashflow would be reduced.

THE OPERATIONS OF AIRPLANES LIMITED, AIRPLANES TRUST AND AEROUSA MAY BECOME
SUBJECT TO IRISH CORPORATE TAXES WHICH WOULD REDUCE THEIR CASHFLOW.

     Airplanes Limited, Airplanes Trust and AeroUSA do not intend to be treated
as doing business in Ireland and, therefore, do not expect to be subject to
Irish corporate tax. However, if their operations differ from those intended,
they could become subject to Irish taxes.

WE WILL NOT PAY ANY ADDITIONAL AMOUNTS TO MAKE UP FOR ANY WITHHOLDING TAX THAT
MAY APPLY AND REDUCE THE AMOUNTS CERTIFICATEHOLDERS RECEIVE.

     We will not make any additional payments to certificateholders for any
withholding or deduction required by applicable law on payments on either the
notes or the certificates. We will use reasonable efforts to avoid the
application of withholding taxes or other deductions. If we cannot avoid the
withholding, we have the right to
                                        20
<PAGE>

redeem the notes and certificates. If withholding taxes are imposed on the notes
or certificates and we do not redeem them, which is likely given our current
financial condition, we will reduce the net amount of any interest that is
passed through to certificateholders by the amount of any withholding or
deduction.

WE MAY LOSE IRISH CORPORATE TAX BENEFITS WHICH WOULD FURTHER REDUCE OUR CASH
AVAILABLE TO MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     Airplanes Limited owns 95% of the capital stock of Airplanes Holdings and
GECAS owns the remaining 5%. The 5% shareholding by GECAS is intended to entitle
Airplanes Holdings and some of its Irish tax-resident subsidiaries to continue
to be eligible for a reduced rate of corporate tax and other corporate tax
benefits for Shannon, Ireland certified companies, including a preferential 10%
corporate tax rate. If GECAS reduces or relocates its operations for any reason
so that it fails to maintain, among other things, specified employment levels in
Ireland, or if GECAS resigns or its appointment is terminated in accordance with
the terms of the servicing agreement, then Airplanes Holdings and those other
companies (a) may become subject to Irish corporate taxation at general Irish
statutory rates, which are currently 12.5% for 2004 and subsequent years, and
(b) may lose the ability to deduct interest payments to Airplanes Limited from
their income in calculating their liability to Irish tax. The loss of these tax
benefits would likely further materially adversely affect Airplanes Limited's
cashflows.

     Upon the scheduled termination of the preferential 10% tax rate on December
31, 2005, Airplanes Holdings and its Irish tax resident subsidiaries will become
subject to Irish corporate tax on their net trading income, which would include
leasing income, at a 12.5% tax rate as provided for in the Irish Finance Act of
1999. There can be no assurance that this tax rate will not be changed in the
future.

RISKS RELATING TO BANKRUPTCY

OUR ASSETS MAY BE CONSOLIDATED WITH THOSE OF DEBIS AIRFINANCE IRELAND OR ITS
SUBSIDIARIES IF THEY BECOME BANKRUPT OR INSOLVENT, LEAVING FEWER ASSETS
AVAILABLE TO REPAY THE CERTIFICATES.

     We have taken steps to structure Airplanes Group and our transactions,
especially the 1996 transaction whereby we acquired our portfolio of aircraft
from GPA Group (now known as debis AirFinance Ireland), to ensure that our
assets would not be consolidated with the assets of debis AirFinance Ireland and
would not become available to debis AirFinance Ireland's creditors in any
bankruptcy or insolvency proceeding involving debis AirFinance Ireland or any of
its affiliates. If debis AirFinance Ireland or any of its subsidiaries becomes
bankrupt or insolvent, there is a legal risk that a court or other authority
could decide that these steps were not effective to insulate our assets from
debis AirFinance Ireland's assets or that debis AirFinance Ireland's transfer of
aircraft to us in 1996 was improper. As a result, the aircraft and our other
assets could become available to repay debis AirFinance Ireland's creditors and
we could lose all of our rights in the aircraft and our other assets. If that
happens, our cashflows could be further reduced.

                                        21
<PAGE>

THE AIRCRAFT, RELATED LEASES AND COLLATERAL

OVERVIEW

     As of March 31, 2004, our portfolio comprised a total of 172 aircraft, of
which 153 aircraft were on lease to 58 lessees in 35 countries and 19 aircraft
were off-lease. At March 31, 2004, five of these off-lease aircraft were subject
to letters of intent for sale. As of the date of this Form 10-K, four of the
aircraft subject to letters of intent for sale had been sold and eight of the
fourteen unplaced off-lease aircraft had become subject to letters of intent for
sale. Since March 31, 2004, a further three aircraft have become off-lease and
are available for marketing. As of March 31, 2004, the weighted average
remaining contracted lease term of our portfolio (by appraised value as of
January 31, 2004 and without giving effect to purchase options or extension
options) was 27 months. Our longest lease is scheduled to expire in June 2014.
Therefore we will be required to re-lease all of our aircraft at least once
before the final maturity date of the certificates. See "Risk Factors -- Risks
Relating to the Leases and Cashflows from Lease Payments" for a description of
the risks certificateholders could face if aircraft are not re-leased.

APPRAISALS

     Under the indentures, we are required, at least once each year and in any
case no later than March 1 of each year, to deliver to the indenture trustee,
appraisals of the value of each of the aircraft in our portfolio from at least
three independent appraisers. This value (the "APPRAISED VALUE") for each
aircraft is the value for that aircraft at normal utilization rates in an open,
unrestricted and stable market, adjusted to take account of the reported
maintenance standard of that aircraft, except for the aircraft that are subject
to finance leases, which are valued at their lease receivable book values. The
appraisals are not based on physical inspection of the aircraft and do not take
into account the value of the leases, maintenance reserves or security deposits.

     For the appraisals as of January 31, 2004, we obtained independent
appraisals from three independent appraisers and calculated the appraised value
of each aircraft by taking the average of the three appraisals. On this basis,
the average appraised value for our portfolio of 172 aircraft was approximately
$2,043.5 million as of January 31, 2004, as compared to $2,409.4 million for the
same 172 aircraft based on appraisals as of January 31, 2003.

     The appraised value of each aircraft in our portfolio by each of the three
independent appraisers as of January 31, 2004 can be found in "Airplanes Group
Portfolio Analysis" below. The aggregate appraised values calculated by each of
the three independent appraisers for our portfolio, calculated by adding up the
appraised value by that appraiser of each aircraft in our portfolio, are as
follows:

<Table>
<Caption>
                                                                      AGGREGATE
                                                                   APPRAISED VALUE
APPRAISER                                                       AS OF JANUARY 31, 2004
---------                                                       ----------------------
                                                                    (IN MILLIONS)
<S>                                                             <C>
Airclaims Limited...........................................           $1,804.9
Aircraft Information Services, Inc..........................            1,924.5
BK Associates, Inc..........................................            2,401.1

Average of three appraisers.................................           $2,043.5
</Table>

     You should not rely on the appraised value as a measure of the realizable
value of any aircraft. See "Risk Factors -- Risks Relating to the Aircraft" for
a discussion of the risks associated with the appraised value.

     Additionally, since we are no longer in a position to maintain loan to
current appraised value ratios by paying class A principal adjustment amount and
since, as a result of the consent solicitation, we are no longer required to
meet note target prices on sales of aircraft, there is now little significance
to the appraised values, other than as a basis for statistical information on
the portfolio.

                                        22
<PAGE>

PORTFOLIO INFORMATION

     The tables set forth below summarize important information about our
portfolio. For a more detailed analysis of the aircraft, see "-- Airplanes Group
Portfolio Analysis" below.

     As of March 31, 2004, 98.58% of the aircraft in our portfolio by appraised
value as of January 31, 2004 held or were capable of holding a noise certificate
issued under Chapter 3 of Volume 1, Part II of Annex 16 of the Chicago
Convention or have been shown to comply with the Stage 3 noise levels set out in
Section 36.5 of Appendix C of Part 36 of the United States Federal Aviation
Regulations (assuming for this purpose that turboprop aircraft are Stage 3
aircraft). We refer to this as being "STAGE 3" compliant and call these aircraft
"STAGE 3 AIRCRAFT."

     The remaining 1.42% of the aircraft by appraised value as of January 31,
2004 held or were capable of holding a noise certificate issued under Chapter 2
of the Chicago Convention or have been shown to comply with the Stage 2 noise
levels set out in Section 36.5 of Appendix C of Part 36 of the United States
Federal Aviation Regulations but do not comply with the requirements for a Stage
3 aircraft. We refer to this as being "STAGE 2" compliant and call these
aircraft "STAGE 2 AIRCRAFT." Most jurisdictions have adopted these U.S.
classifications, which consider Stage 2 aircraft that have been hushkitted to be
Stage 3 aircraft. For purposes of the table below, Stage 2 aircraft that have
been hushkitted are considered to be Stage 3 aircraft and referred to as "STAGE
3HK."

     The following table lists the aircraft by type and number as of March 31,
2004 and the percentage of our portfolio they represent by appraised value as of
January 31, 2004. For the purpose of this table, turboprop aircraft are
considered to be Stage 3 aircraft.

<Table>
<Caption>
                                                                                      % OF PORTFOLIO BY
                                                                                      APPRAISED VALUE AS
                                                     NUMBER OF                          OF JANUARY 31,
MANUFACTURER                      TYPE OF AIRCRAFT   AIRCRAFT    BODY TYPE    STAGE          2004
------------                      ----------------   ---------   ----------   -----   ------------------
<S>                               <C>                <C>         <C>          <C>     <C>
Boeing (49.03%).................  B737-200A              11      Narrowbody      2            1.09
                                   B737-200A              2      Narrowbody    3hk            0.23
                                   B737-300               8      Narrowbody      3            5.84
                                   B737-300QC             2      Narrowbody      3            1.26
                                   B737-400              22      Narrowbody      3           18.75
                                   B737-500              11      Narrowbody      3            7.81
                                   B747-200SF             1      Freighter       3            0.79
                                   B757-200               3      Narrowbody      3            3.74
                                   B767-200ER             1      Widebody        3            1.49
                                   B767-300ER             4      Widebody        3            8.01
McDonnell Douglas (26.29%)......  DC8-71F                17      Freighter       3            6.05
                                   DC8-73CF               1      Freighter       3            0.47
                                   DC9-32                 5      Narrowbody      2            0.32
                                   MD-11                  3      Widebody        3            5.80
                                   MD-82                  2      Narrowbody      3            0.78
                                   MD-83                 23      Narrowbody      3           12.43
                                   MD-87                  1      Narrowbody      3            0.44
Airbus (13.51%).................  A300-B4-200             1      Widebody        3            0.20
                                   A300-C4-200            1      Widebody        3            0.41
                                   A320-200              12      Narrowbody      3           12.90
Fokker (5.50%)..................  F-100                  16      Narrowbody      3            5.50
De Havilland of Canada            DHC8-100                6      Turboprop       3            0.89
  (5.01%).......................   DHC8-300              13      Turboprop       3            3.61
                                   DHC8-300C              2      Turboprop       3            0.51
ATR (0.67%).....................  ATR42-300               4      Turboprop       3            0.67
                                                        ---                                 ------
  Total.........................                        172                                 100.00%
                                                        ===                                 ======
</Table>

                                        23
<PAGE>

     The following table sets forth the exposure of our portfolio by lessee as
of March 31, 2004 according to the number of aircraft and the appraised value as
of January 31, 2004.

<Table>
<Caption>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
LESSEE(1)                                                       AIRCRAFT            2004
---------                                                       ---------    ------------------
<S>                                                             <C>          <C>
Air Canada Capital Limited..................................         6               6.28%
Turk Hava Yollari A.O. (THY Turkish Airlines)...............         7               5.87
Aerovias Nacionales de Colombia S.A. (AVIANCA)..............         6               5.13
MyTravel Airways............................................         3               3.39
Air One SpA.................................................         4               3.37
Spanair S.A. ...............................................         6               3.11
Compania Mexicana de Aviacion, S.A. de C.V. (MEXICANA)......         8               2.88
China Southern Airlines Company Limited.....................         4               2.82
TAM Transportes Aereos Meridionais S.A. ....................         8               2.62
Compania Hispano Irlandesa de Aviacion S.A. (FUTURA)........         3               2.50
Philippine Airlines Inc. (PAL)..............................         3               2.47
BAX Global Inc..............................................         7               2.46
Ukraine International.......................................         3               2.30
Nouvelair Tunisie...........................................         3               2.15
Compagnie Nationale Air France (AIR FRANCE).................         2               2.08
Air Atlantic Icelandic......................................         1               2.05
Nationwide Airlines.........................................         1               2.05
Euro Atlantic Airways.......................................         1               2.02
East African Safari Air.....................................         1               1.89
PT Metro Batavia............................................         5               1.87
Meridiana SpA...............................................         3               1.72
P T Garuda Indonesia........................................         2               1.66
Air Asia Sdn. Bhd. .........................................         2               1.62
Asiana Airlines Inc. .......................................         2               1.57
Titan Airways...............................................         3               1.53
Other (33 lessees)..........................................        59              23.06
Off-lease(2)................................................        19               9.53
                                                                   ---             ------
  Total.....................................................       172             100.00%
                                                                   ===             ======
</Table>

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

(1)  Total number of lessees = 58

(2)  As of March 31, 2004, five of the nineteen off-lease aircraft were subject
     to letters of intent for sale. As of the date of this Form 10-K, four of
     the aircraft subject to letters of intent have been sold. Since March 31,
     2004, eight of the fourteen unplaced off-lease aircraft have become subject
     to letters of intent for sale and a further three aircraft have become
     off-lease.

                                        24
<PAGE>

     The following table sets forth the exposure of our portfolio by country of
domicile of lessees as of March 31, 2004 according to the number of aircraft and
the appraised value of the portfolio as of January 31, 2004.

<Table>
<Caption>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
COUNTRY(1)                                                      AIRCRAFT            2004
----------                                                      ---------    ------------------
<S>                                                             <C>          <C>
Canada......................................................         8               7.47%
Turkey......................................................         9               6.87
Colombia....................................................         9               6.26
United Kingdom..............................................         9               6.17
Spain.......................................................         9               5.61
United States of America....................................        12               5.34
Indonesia...................................................        15               5.15
Italy.......................................................         7               5.09
Mexico......................................................        12               4.16
China.......................................................         5               4.10
Iceland.....................................................         3               3.31
Brazil......................................................         9               3.02
Philippines.................................................         3               2.47
Ukraine.....................................................         3               2.30
Antigua.....................................................        10               2.20
Tunisia.....................................................         3               2.15
France......................................................         2               2.08
South Africa................................................         1               2.05
Portugal....................................................         1               2.02
Kenya.......................................................         1               1.89
Hungary.....................................................         2               1.64
Malaysia....................................................         2               1.62
South Korea.................................................         2               1.57
Other (12 countries)........................................        16               5.93
Off-lease(2)................................................        19               9.53
                                                                   ---             ------
  Total.....................................................       172             100.00%
                                                                   ===             ======
</Table>

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

(1)  Total number of countries = 35

(2)  As of March 31, 2004, five of the nineteen off-lease aircraft were subject
     to letters of intent for sale. As of the date of this Form 10-K, four of
     the aircraft subject to letters of intent have been sold. Since March 31,
     2004, eight of the fourteen unplaced off-lease aircraft have become subject
     to letters of intent for sale and a further three aircraft have become
     off-lease.

                                        25
<PAGE>

     The following table sets forth the exposure of our portfolio by regions in
which lessees are domiciled as of March 31, 2004 according to the number of
aircraft and the appraised value of our portfolio as of January 31, 2004.

<Table>
<Caption>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
REGION(1)                                                       AIRCRAFT            2004
---------                                                       ---------    ------------------
<S>                                                             <C>          <C>
Europe (excluding CIS Countries)............................        49              36.16%
Latin America...............................................        44              16.88
North America...............................................        20              12.81
Asia & Far East.............................................        30              15.95
Africa......................................................         6               6.19
Australia & New Zealand.....................................         1               0.17
Other (including CIS Countries).............................         3               2.30
Off-Lease(1)................................................        19               9.53
                                                                   ---             ------
  Total.....................................................       172             100.00%
                                                                   ===             ======
</Table>

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

(1)  As of March 31, 2004, five of the nineteen off-lease aircraft were subject
     to letters of intent for sale. As of the date of this Form 10-K, four of
     the aircraft subject to letters of intent have been sold. Since March 31,
     2004, eight of the fourteen unplaced off-lease aircraft have become subject
     to letters of intent for sale and a further three aircraft have become
     off-lease.

     The following table sets forth the exposure of the portfolio by year of
aircraft manufacture or conversion to freighter as of March 31, 2004 according
to the number of aircraft and the appraised value of the aircraft as of January
31, 2004. See note 1 to "Airplanes Group Portfolio Analysis" below for the
original manufacture dates for the aircraft that were converted into freighters.

<Table>
<Caption>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
YEAR OF MANUFACTURE/FREIGHTER CONVERSION                        AIRCRAFT            2004
----------------------------------------                        ---------    ------------------
<S>                                                             <C>          <C>
1988........................................................        12               4.69%
1989........................................................         8               3.91
1990........................................................        21              11.44
1991........................................................        42              23.69
1992........................................................        54              45.62
1993........................................................         6               3.58
Other.......................................................        29               7.06
                                                                   ---             ------
  Total.....................................................       172             100.00%
                                                                   ===             ======
</Table>

     The following table sets forth the exposure of the portfolio by seat
category as of March 31, 2004 according to the number of aircraft and the
appraised value of the portfolio as of January 31, 2004.

<Table>
<Caption>
                                                                                 % OF PORTFOLIO BY
                                                                                 APPRAISED VALUE AS
                                                                    NUMBER OF      OF JANUARY 31,
SEAT CATEGORY    AIRCRAFT TYPES                                     AIRCRAFT            2004
-------------    --------------                                     ---------    ------------------
<S>              <C>                                                <C>          <C>
Less than 51     DHC8, METRO-III, ATR42.........................        25               5.68%
91-120           B737-200, B737-500, DC9-32/51, MD-87, F-100....        46              15.40
121-170          B737-300/300QC/400, MD-82/83, A320-200.........        69              51.96
171-240          B757-200, B767-200ER...........................         4               5.23
241-350          B767-300ER, MD-11, A300........................         9              14.42
Freighter        B747-200SF, DC8-71F/73CF.......................        19               7.31
                                                                       ---             ------
                                                                       172             100.00%
                                                                       ===             ======
</Table>

                                        26
<PAGE>

                       AIRPLANES GROUP PORTFOLIO ANALYSIS
                               AT MARCH 31, 2004
<Table>
<Caption>

REGION                    COUNTRY                      LESSEE                                                  AIRCRAFT TYPE
------                    -------                      ------                                                  -------------
<S>                       <C>                          <C>                                                     <C>
Africa..................  Kenya                        East African Safari Air, Limited                        B767-300ER
                          Nigeria                      Bellview Airlines Ltd                                   B737-200A
                          South Africa                 Nationwide Airlines                                     B767-300ER
                          Tunisia                      Nouvelair Tunisie                                       A320-200
                          Tunisia                      Nouvelair Tunisie                                       MD83
                          Tunisia                      Nouvelair Tunisie                                       MD83
Asia & Far East.........  Bangladesh                   GMG Airlines                                            DHC8-300
                          China                        China Southern                                          B737-500
                          China                        China Southern                                          B737-500
                          China                        China Southern                                          B737-500
                          China                        China Southern                                          B737-500
                          China                        Xinjiang                                                B757-200
                          Indonesia                    Garuda                                                  B737-400
                          Indonesia                    Garuda                                                  B737-400
                          Indonesia                    Merpati Nusantara Airlines                              B737-200A
                          Indonesia                    Merpati Nusantara Airlines                              B737-200A
                          Indonesia                    PT Adam SkyConnection Airlines                          B737-400
                          Indonesia                    PT Mandala Airlines                                     B737-200A
                          Indonesia                    PT Mandala Airlines                                     B737-200A
                          Indonesia                    PT Mandala Airlines                                     B737-200A
                          Indonesia                    PT Mandala Airlines                                     B737-200A
                          Indonesia                    PT Mandala Airlines                                     B737-200A
                          Indonesia                    PT Metro Batavia                                        B737-200A
                          Indonesia                    PT Metro Batavia                                        B737-200A
                          Indonesia                    PT Metro Batavia                                        B737-200A
                          Indonesia                    PT Metro Batavia                                        B737-400
                          Indonesia                    PT Metro Batavia                                        B737-400
                          Malaysia                     Air Asia Sdn. Bhd                                       B737-300
                          Malaysia                     Air Asia Sdn. Bhd                                       B737-300
                          Pakistan                     Pakistan Int Airline                                    A300B4-200
                          Philippines                  Philippine Airlines                                     B737-300
                          Philippines                  Philippine Airlines                                     B737-400
                          Philippines                  Philippine Airlines                                     B737-400
                          South Korea                  Asiana Airlines                                         B737-400
                          South Korea                  Asiana Airlines                                         B737-400
                          Taiwan                       Far Eastern Air Transport                               MD83
Australia & New
 Zealand................  Australia                    National Jet Systems                                    DHC8-100
Europe..................  Czech Republic               Travel Servis a.s.                                      B737-400
                          France                       Air France                                              A320-200
                          France                       Air France                                              A320-200
                          Hungary                      Malev                                                   B737-400
                          Hungary                      SkyEurope Airlines                                      B737-500
                          Iceland                      Air Atlanta Icelandic                                   B767-300ER
                          Iceland                      Bluebird Cargo                                          B737-300SF
                          Iceland                      Bluebird Cargo                                          B737-300SF
                          Italy                        Air One SpA                                             B737-300

<Caption>
                                                                         % OF PORTFOLIO
                                      DATE OF        APPRAISED VALUE      BY APPRAISED
                          SERIAL   MANUFACTURE/    AT JANUARY 31, 2004    VALUE AS OF
REGION                    NUMBER   CONVERSION(1)      (U.S.$000'S)        JAN 31, 2004
------                    ------   -------------   -------------------   --------------
<S>                       <C>      <C>             <C>                   <C>
Africa..................   24948   1991                    38,679             1.89%
                           23024      1983                  1,997             0.10%
                           26200      1992                 41,936             2.05%
                             348      1992                 23,223             1.14%
                           49631      1989                 11,174             0.55%
                           49672      1988                  9,522             0.47%
Asia & Far East.........     307   1991                     5,735             0.28%
                           24897      1991                 13,642             0.67%
                           25182      1992                 14,269             0.70%
                           25183      1992                 14,845             0.73%
                           25188      1992                 14,858             0.73%
                           26156      1992                 26,091             1.28%
                           24683      1990                 16,772             0.82%
                           24691      1990                 17,129             0.84%
                           22368      1980                  2,054             0.10%
                           22369      1980                  1,951             0.10%
                           26071      1992                 18,757             0.92%
                           21685      1979                  1,464             0.07%
                           22278      1980                  1,617             0.08%
                           22803      1983                  2,367             0.12%
                           22804      1983                  2,314             0.11%
                           23023      1983                  2,544             0.12%
                           22397      1981                  2,104             0.10%
                           22407      1980                  2,135             0.10%
                           22802      1983                  1,797             0.09%
                           24345      1989                 15,710             0.77%
                           24687      1990                 16,453             0.81%
                           24905      1991                 16,467             0.81%
                           24907      1991                 16,560             0.81%
                             269      1983                  4,131             0.20%
                           24770      1990                 14,697             0.72%
                           24684      1990                 16,270             0.80%
                           26081      1993                 19,484             0.95%
                           24493      1989                 15,767             0.77%
                           24520      1990                 16,354             0.80%
                           49950      1991                 11,627             0.57%
Australia & New
 Zealand................     229   1990                     3,573             0.17%
Europe..................   24911   1991                    17,468             0.85%
                             203      1991                 20,910             1.02%
                             220      1991                 21,680             1.06%
                           26069      1992                 18,583             0.91%
                           25185      1992                 14,966             0.73%
                           26204      1992                 41,877             2.05%
                           23499      1986                 13,011             0.64%
                           23500      1986                 12,674             0.62%
                           25179      1992                 17,054             0.83%
</Table>

                                        27
<PAGE>
<Table>
<Caption>

REGION                    COUNTRY                      LESSEE                                                  AIRCRAFT TYPE
------                    -------                      ------                                                  -------------
<S>                       <C>                          <C>                                                     <C>
                          Italy                        Air One SpA                                             B737-300
                          Italy                        Air One SpA                                             B737-400
                          Italy                        Air One SpA                                             B737-400
                          Italy                        Meridiana SpA                                           MD83
                          Italy                        Meridiana SpA                                           MD83
                          Italy                        Meridiana SpA                                           MD83
                          Netherlands                  Capital Aviation Services B.V.                          DHC8-300
                          Netherlands                  Capital Aviation Services B.V.                          DHC8-300
                          Norway                       Wideroe's Flyveselskap a/s                              DHC8-300
                          Norway                       Wideroe's Flyveselskap a/s                              DHC8-300
                          Portugal                     euroAtlantic airways                                    B767-300ER
                          Slovakia                     SkyEurope Airlines Hungary Kft                          B737-500
                          Slovakia                     SkyEurope Airlines Hungary Kft                          B737-500
                          Spain                        Futura                                                  B737-400
                          Spain                        Futura                                                  B737-400
                          Spain                        Futura                                                  B737-400
                          Spain                        Spanair                                                 MD83
                          Spain                        Spanair                                                 MD83
                          Spain                        Spanair                                                 MD83
                          Spain                        Spanair                                                 MD83
                          Spain                        Spanair                                                 MD83
                          Spain                        Spanair                                                 MD83
                          Turkey                       FreeBird Airlines                                       MD83
                          Turkey                       Orbit Ekspres Havayollari A.A.                          A300C4-200
                          Turkey                       Turk Hava Yollari                                       B737-400
                          Turkey                       Turk Hava Yollari                                       B737-400
                          Turkey                       Turk Hava Yollari                                       B737-400
                          Turkey                       Turk Hava Yollari                                       B737-400
                          Turkey                       Turk Hava Yollari                                       B737-400
                          Turkey                       Turk Hava Yollari                                       B737-500
                          Turkey                       Turk Hava Yollari                                       B737-500
                          United Kingdom               Air Southwest                                           DHC8-300
                          United Kingdom               Air Southwest                                           DHC8-300
                          United Kingdom               easyJet Airline Limited Company                         B737-300
                          United Kingdom               MyTravel Airways                                        A320-200
                          United Kingdom               MyTravel Airways                                        A320-200
                          United Kingdom               MyTravel Airways                                        A320-200
                          United Kingdom               Titan Airways Limited                                   ATR42-300
                          United Kingdom               Titan Airways Limited                                   ATR42-300
                          United Kingdom               Titan Airways Limited                                   B757-200
Latin America...........  Antigua                      Caribbean Star Airlines                                 DHC8-300
                          Antigua                      Caribbean Star Airlines                                 DHC8-300
                          Antigua                      Caribbean Star Airlines                                 DHC8-300
                          Antigua                      Caribbean Star Airlines                                 DHC8-300
                          Antigua                      Caribbean Star Airlines                                 DHC8-300
                          Antigua                      Liat                                                    DHC8-100
                          Antigua                      Liat                                                    DHC8-100
                          Antigua                      Liat                                                    DHC8-100
                          Antigua                      Liat                                                    DHC8-100

<Caption>
                                                                         % OF PORTFOLIO
                                      DATE OF        APPRAISED VALUE      BY APPRAISED
                          SERIAL   MANUFACTURE/    AT JANUARY 31, 2004    VALUE AS OF
REGION                    NUMBER   CONVERSION(1)      (U.S.$000'S)        JAN 31, 2004
------                    ------   -------------   -------------------   --------------
<S>                       <C>      <C>             <C>                   <C>
                           25187      1992                 17,357             0.85%
                           24906      1991                 17,152             0.84%
                           24912      1991                 17,308             0.85%
                           49792      1989                 11,291             0.55%
                           49935      1990                 11,474             0.56%
                           49951      1991                 12,334             0.60%
                             244      1990                  5,202             0.25%
                             276      1991                  5,402             0.26%
                             293      1991                  5,701             0.28%
                             342      1992                  6,112             0.30%
                           25411      1992                 41,234             2.02%
                           25186      1992                 13,917             0.68%
                           25191      1992                 15,088             0.74%
                           24689      1990                 16,426             0.80%
                           24690      1990                 16,305             0.80%
                           25180      1992                 18,341             0.90%
                           49620      1988                 10,012             0.49%
                           49624      1988                  9,644             0.47%
                           49626      1988                 10,028             0.49%
                           49709      1988                  9,922             0.49%
                           49936      1990                 12,367             0.61%
                           49938      1990                 11,637             0.57%
                           49949      1991                 12,018             0.59%
                              83      1979                  8,377             0.41%
                           24917      1991                 17,517             0.86%
                           25181      1992                 17,807             0.87%
                           25184      1992                 18,174             0.89%
                           25261      1992                 18,675             0.91%
                           26065      1992                 18,392             0.90%
                           25288      1992                 14,657             0.72%
                           25289      1992                 14,737             0.72%
                             296      1991                  5,753             0.28%
                             334      1992                  6,263             0.31%
                           23923      1988                 13,499             0.66%
                             294      1992                 22,722             1.11%
                             301      1992                 22,440             1.10%
                             349      1992                 24,214             1.18%
                             109      1988                  2,778             0.14%
                             113      1988                  2,840             0.14%
                           26151      1992                 25,565             1.25%
Latin America...........     232   1990                     5,240             0.26%
                             266      1991                  5,596             0.27%
                             267      1991                  5,781             0.28%
                             298      1992                  5,839             0.29%
                             300      1992                  5,706             0.28%
                             113      1988                  2,567             0.13%
                             140      1989                  2,714             0.13%
                             144      1989                  2,808             0.14%
                             270      1991                  3,197             0.16%
</Table>

                                        28
<PAGE>
<Table>
<Caption>

REGION                    COUNTRY                      LESSEE                                                  AIRCRAFT TYPE
------                    -------                      ------                                                  -------------
<S>                       <C>                          <C>                                                     <C>
                          Antigua                      Liat                                                    DHC8-300
                          Brazil                       Promodal Transportes Aereos Ltda.                       DC8-71F
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Brazil                       TAM Linhas Aereas                                       F100
                          Colombia                     Avianca                                                 B757-200
                          Colombia                     Avianca                                                 B767-200ER
                          Colombia                     Avianca                                                 MD83
                          Colombia                     Avianca                                                 MD83
                          Colombia                     Avianca                                                 MD83
                          Colombia                     Avianca                                                 MD83
                          Colombia                     Tampa                                                   DC8-71F
                          Colombia                     Tampa                                                   DC8-71F
                          Colombia                     Tampa                                                   DC8-71F
                          Mexico                       Aeromexico                                              DC9-32
                          Mexico                       Aeromexico                                              MD82
                          Mexico                       Aeromexico                                              MD82
                          Mexico                       Aeromexico                                              MD87
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Mexico                       Mexicana                                                F100
                          Netherlands Antilles         Dutch Caribbean Airline                                 DHC8-300C
                          Netherlands Antilles         Dutch Caribbean Airline                                 DHC8-300C
                          Trinidad & Tobago            BWIA West Indies Airways Limited                        MD83
                          Uruguay                      PLUNA Lineas Aereas Uraguayas S.A.                      ATR42-300
North America...........  Canada                       AC Leasing                                              A320-200
                          Canada                       AC Leasing                                              A320-200
                          Canada                       AC Leasing                                              A320-200
                          Canada                       AC Leasing                                              A320-200
                          Canada                       AC Leasing                                              A320-200
                          Canada                       AC Leasing                                              A320-200
                          Canada                       Jetsgo Airlines                                         MD83
                          Canada                       Jetsgo Airlines                                         MD83
                          United States of America     Astar Air Cargo                                         DC8-73CF
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     BAX Global                                              DC8-71F

<Caption>
                                                                         % OF PORTFOLIO
                                      DATE OF        APPRAISED VALUE      BY APPRAISED
                          SERIAL   MANUFACTURE/    AT JANUARY 31, 2004    VALUE AS OF
REGION                    NUMBER   CONVERSION(1)      (U.S.$000'S)        JAN 31, 2004
------                    ------   -------------   -------------------   --------------
<S>                       <C>      <C>             <C>                   <C>
                             283      1991                  5,524             0.27%
                           45970      1992                  8,111             0.40%
                           11284      1990                  6,463             0.32%
                           11285      1990                  6,113             0.30%
                           11304      1991                  6,504             0.32%
                           11305      1991                  6,865             0.34%
                           11336      1991                  7,209             0.35%
                           11347      1991                  7,292             0.36%
                           11348      1991                  6,540             0.32%
                           11371      1991                  6,578             0.32%
                           26154      1992                 24,859             1.22%
                           25421      1992                 30,425             1.49%
                           49939      1990                 12,030             0.59%
                           49946      1991                 11,937             0.58%
                           53120      1992                 12,685             0.62%
                           53125      1992                 12,979             0.64%
                           45945      1992                  7,211             0.35%
                           45976      1991                  9,007             0.44%
                           46066      1991                  6,814             0.33%
                           48128      1980                  1,301             0.06%
                           49660      1988                  8,003             0.39%
                           49667      1988                  8,029             0.39%
                           49673      1988                  8,914             0.44%
                           11266      1990                  6,970             0.34%
                           11309      1991                  7,594             0.37%
                           11319      1991                  7,398             0.36%
                           11339      1991                  6,687             0.33%
                           11374      1992                  7,584             0.37%
                           11375      1992                  7,347             0.36%
                           11382      1992                  7,654             0.37%
                           11384      1992                  7,530             0.37%
                             230      1990                  5,253             0.26%
                             242      1990                  5,116             0.25%
                           49789      1989                 10,814             0.53%
                             284      1992                  4,163             0.20%
North America...........     174   1991                    20,485             1.00%
                             175      1991                 20,703             1.01%
                             232      1991                 20,839             1.02%
                             284      1991                 21,171             1.04%
                             309      1992                 21,862             1.07%
                             404      1993                 23,260             1.14%
                           49941      1990                 11,867             0.58%
                           49943      1991                 12,545             0.61%
                           46091      1989                  9,664             0.47%
                           45811      1991                  7,862             0.38%
                           45813      1992                  7,199             0.35%
                           45973      1992                  7,409             0.36%
                           45978      1993                  6,505             0.32%
                           45993      1993                  7,609             0.37%
</Table>

                                        29
<PAGE>
<Table>
<Caption>

REGION                    COUNTRY                      LESSEE                                                  AIRCRAFT TYPE
------                    -------                      ------                                                  -------------
<S>                       <C>                          <C>                                                     <C>
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     BAX Global                                              DC8-71F
                          United States of America     Frontier Airlines, Inc                                  B737-300
                          United States of America     Pace Airlines                                           B737-300
                          United States of America     Polar Air Cargo                                         B747-200SF
                          United States of America     TWA Airlines LLC                                        MD83
Off Lease...............  Off Lease                    Off Lease                                               ATR42-300
                          Off Lease                    Off Lease                                               B737-200A
                          Off Lease                    Off Lease                                               B737-200A
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC8-71F
                          Off Lease                    Off Lease                                               DC9-32
                          Off Lease                    Off Lease                                               DC9-32
                          Off Lease                    Off Lease                                               DC9-32
                          Off Lease                    Off Lease                                               DC9-32
                          Off Lease                    Off Lease                                               DHC8-100
                          Off Lease                    Off Lease                                               MD11
                          Off Lease                    Off Lease                                               MD11
                          Off Lease                    Off Lease                                               MD11
                          Off Lease                    Off Lease                                               MD83
                          Off Lease                    Off Lease                                               MD83
Others..................  Ukraine                      Ukraine International                                   B737-400
                          Ukraine                      Ukraine International                                   B737-500
                          Ukraine                      Ukraine International                                   B737-500

<Caption>
                                                                         % OF PORTFOLIO
                                      DATE OF        APPRAISED VALUE      BY APPRAISED
                          SERIAL   MANUFACTURE/    AT JANUARY 31, 2004    VALUE AS OF
REGION                    NUMBER   CONVERSION(1)      (U.S.$000'S)        JAN 31, 2004
------                    ------   -------------   -------------------   --------------
<S>                       <C>      <C>             <C>                   <C>
                           45994      1994                  6,453             0.32%
                           46065      1992                  7,175             0.35%
                           23177      1986                 11,033             0.54%
                           23749      1987                 12,763             0.62%
                           21730      2001                 16,180             0.79%
                           49575      1987                  9,250             0.45%
Off Lease...............     249   1991                     3,825             0.19%
                           21735      1979                  2,033             0.10%
                           22979      1983                  2,697             0.13%
                           45849      1991                  6,927             0.34%
                           45946      1992                  5,745             0.28%
                           45971      1992                  6,493             0.32%
                           45996      1992                  6,654             0.33%
                           45997      1993                 10,398             0.51%
                           45998      1993                  5,978             0.29%
                           48125      1980                  1,343             0.07%
                           48126      1980                  1,258             0.06%
                           48127      1980                  1,128             0.06%
                           48129      1980                  1,595             0.08%
                             258      1991                  3,292             0.16%
                           48499      1992                 38,667             1.89%
                           48500      1992                 39,690             1.94%
                           48501      1992                 40,112             1.96%
                           49390      1986                  8,028             0.39%
                           49442      1987                  8,824             0.43%
Others..................   25190   1992                    18,348             0.90%
                           25192      1992                 14,672             0.72%
                           26075      1992                 14,029             0.69%
                                                        ---------           -------
                                                        2,043,495           100.00%
                                                        =========           =======
</Table>

                                        30
<PAGE>

---------------
Note:

(1) For the aircraft listed below, the table above reflects the date of
    conversion to a freighter configuration. The following table sets forth the
    date of original manufacture for those aircraft.

<Table>
<Caption>
                                DATE OF
MSN                           MANUFACTURE
---                           -----------
<S>                           <C>
45811.......................    Aug-67
45813.......................    Jan-67
45849.......................    Apr-67
45945.......................    Mar-68
45946.......................    Mar-68
45970.......................    Mar-68
45971.......................    May-68
45973.......................    May-68
45976.......................    Jul-68
45978.......................    Jul-68
</Table>

<Table>
<Caption>
                                DATE OF
MSN                           MANUFACTURE
---                           -----------
<S>                           <C>
45993.......................    Aug-68
45994.......................    Aug-68
45996.......................    Oct-68
45997.......................    Oct-68
45998.......................    Oct-68
46065.......................    Jun-69
46066.......................    Jun-69
46091.......................    Apr-70
21730.......................    Jun-79
</Table>

(2) As of March 31, 2004, five of the off-lease aircraft (MSN 22979, 21735,
    45946, 45971, 45998) were subject to letters of intent for sale. As of the
    date of this Form 10-K, four of these aircraft (MSN 45946, 45971, 45998,
    21735) have been sold and eight of the fourteen off-lease unplaced aircraft
    have become subject to letters of intent for sale. Since March 31, 2004 a
    further three aircraft had become off-lease.

                                        31
<PAGE>

THE LEASES

     Most of the leases are operating leases under which we generally retain the
benefit, and bear the risk, of the residual value of the aircraft at the end of
the lease. As of March 31, 2004, 153 aircraft were on lease and nineteen
aircraft were off-lease. As of March 31, 2004, five of these off-lease aircraft
were subject to letters of intent for sale. The remaining fourteen unplaced
aircraft represented 8.40% of our portfolio by appraised value as of January 31,
2004. As of the date of this Form 10-K, four of the aircraft subject to letters
of intent for sale had been sold, eight of the fourteen unplaced off-lease
aircraft had become subject to letters of intent for sale and six aircraft were
available for marketing. Since March 31, 2004, a further three aircraft had
become off-lease and were available for marketing. All leases are managed by the
servicer according to the servicing agreement.

     Although the lease documentation is fairly standardized in many respects,
significant variations do exist as a result of negotiation with each lessee.

     Under a majority of our leases, the lessee is responsible, either directly
or through indemnification of the lessor, for all operating expenses, including
maintenance, operating, overhaul, fuel, crews, airport and navigation charges,
taxes, licenses, consents and approvals, aircraft registration and hull and
liability insurance. In addition, the lessees must remove all liens on the
aircraft except liens that are permitted by the lease.

     Each of our current leases requires the lessee to make periodic rental
payments during the term of the lease. Some of the leases also require the
lessee to pay periodic amounts as maintenance reserves or to deliver letters of
credit or guarantees for this purpose. Almost all the leases require the lessees
to make payments to us without set-off or counterclaim, and most of them include
an obligation for the lessee to gross-up payments under the lease if the lease
payments are subject to withholding or other taxes. The leases also generally
contain indemnification of the lessor for tax liabilities such as value added
tax and stamp duty tax, but not income tax.

     Each lease also contains provisions which specify our rights and remedies
if the lessee defaults in making payments or performing its other obligations
under the lease. These remedies include terminating the lease and repossessing
the aircraft. However, any default by a lessee may lead to reduction of payments
under the leases and cause us to incur significant repossession and other costs,
including breakage costs under swaps. If there is an event of default due to a
lessee's bankruptcy, we may also face delays in asserting our rights if the
relevant jurisdiction imposes a mandatory waiting period between default and
repossession.

     The following is a summary of the principal terms of the leases as of March
31, 2004, with reference to appraised values as of January 31, 2004.

LEASE TERM.................  As of March 31, 2004, the weighted average
                             remaining contracted lease term of the aircraft
                             (weighted by appraised value as of January 31, 2004
                             and without giving effect to purchase options,
                             early terminations or extensions) was 27 months.
                             The longest lease was scheduled to expire in June
                             2014.

RENTALS....................  As of March 31, 2004, rent under 138 of the leases,
                             representing 82.61% by appraised value of our
                             portfolio as of January 31, 2004, was payable
                             monthly in advance, and rent under 15 of the
                             leases, representing 7.85% by appraised value of
                             our portfolio as of January 31, 2004, was payable
                             monthly in arrears.

                             These rental payments are calculated based on a
                             floating rate or a fixed rate or may change from
                             one to the other over the course of the lease. The
                             rent under all of the leases is currently payable
                             in U.S. dollars, although in the future, rent on
                             some new leases may be payable in euros. Some
                             rental payments are based on the number of flight
                             hours an aircraft is operated or may vary depending
                             on the time of year during which the aircraft is
                             operating.

EXTENSION OPTIONS..........  Some of the leases contain an extension option
                             pursuant to which, depending on the negotiations
                             with the lessee at the time of signing of the
                                        32
<PAGE>

                             lease, either we or the lessee could extend the
                             term of the lease at either the existing lease rate
                             or at the future market rate. As of March 31, 2004,
                             14 of the leases representing 8.9% of our portfolio
                             by appraised value as of January 31, 2004, included
                             an extension option.

EARLY TERMINATION
OPTIONS....................  Some of the leases contain an early termination
                             option pursuant to which the lessee may terminate
                             the lease before the scheduled expiration date if
                             specified conditions are met. As of March 31, 2004,
                             6 of the leases representing 5.5% of our portfolio
                             by appraised value as of January 31, 2004 include
                             an early termination option. Assuming that all
                             these options are exercised for the earliest
                             possible termination, the weighted average
                             remaining lease term of our portfolio would be 26
                             months.

PURCHASE OPTIONS...........  As of March 31, 2004, five lessees had outstanding
                             options to purchase a total of six aircraft,
                             representing 3.81% of our portfolio by appraised
                             value as of January 31, 2004. The latest date on
                             which a purchase option could be exercised is
                             December 4, 2007 for a purchase of a B767-200ER.

SECURITY DEPOSITS..........  As of March 31, 2004, lessees under 146 of the
                             leases representing 84.02% of our portfolio by
                             appraised value as of January 31, 2003 have
                             provided security for their obligations. As of
                             March 31, 2004, we had $30 million in cash security
                             deposits in respect of 96 aircraft representing
                             52.33% of our portfolio by appraised value as of
                             January 31, 2004, and $111 million in letters of
                             credit in respect of 61 aircraft representing
                             39.78% of our portfolio by appraised value as of
                             January 31, 2004.

GUARANTEES.................  In 64 of the leases, we have received guarantees of
                             the lessee's performance obligations under the
                             lease. These guarantees were issued by the lessee's
                             parent company or shareholders.

MAINTENANCE................  The leases contain detailed provisions specifying
                             maintenance standards and aircraft redelivery
                             conditions generally to be met at the lessees'
                             expense. During the term of each lease, we require
                             the lessee to maintain the aircraft in accordance
                             with an agreed maintenance program designed to
                             ensure that the aircraft meets applicable
                             airworthiness and other regulatory requirements.
                             Lessees must provide monthly maintenance reserves
                             under approximately 83 of the leases. Under the
                             balance of the leases, the lessee or the lessor may
                             be required to make certain adjustment payments to
                             one another if at redelivery the aircraft or
                             specified items do not meet the required standards
                             under the lease. Heavy maintenance on significant
                             components of an aircraft, such as the airframe and
                             the engines, is generally required to be performed
                             on a cycle of several years and the cost of this
                             maintenance may be material in relation to the
                             value of the aircraft, with the overhaul of a
                             single component often exceeding $1 million.
                             Pursuant to the leases, if and when an aircraft is
                             transferred from one lessee to another between
                             maintenance overhauls, the transferring lessee is
                             generally required to pay for that portion of the
                             succeeding overhaul that can be attributed to its
                             use of the aircraft under its lease.

                             Depending on the credit of the lessee and other
                             factors, we may require that the lessee pay cash
                             maintenance reserves (71 leases as of March 31,
                             2004, representing 45.68% of our portfolio by
                             appraised value as of January 31, 2004) or provide
                             a combination of maintenance reserves and letters
                             of credit or guarantees (13 leases as of March 31,
                             2004, representing 8.14% of our portfolio by
                             appraised value as of January 31, 2004). If the
                             lessee pays maintenance reserves, we will have to
                             reimburse it for
                                        33
<PAGE>

                             maintenance it actually performs on the aircraft.
                             Our obligation to reimburse maintenance is
                             classified as an expense and therefore ranks senior
                             to any payments on the notes and certificates.

                             If the lessee is not required to pay maintenance
                             reserves or provide letters of credit or
                             guarantees, we have to rely on the lessee's credit
                             and its ability to maintain the aircraft during the
                             lease term and return it in good condition or make
                             any maintenance payments required at the end of the
                             lease. If maintenance is required on the aircraft
                             but not performed, or the lessee fails to pay, we
                             have to fund this maintenance ourselves. As of
                             March 31, 2004, we recorded approximately $287
                             million of maintenance reserves liability.

                             Maintenance payments by lessees will depend upon
                             numerous factors including the financial condition
                             of the lessee and the ability of Airplanes Group to
                             obtain satisfactory maintenance terms in leases. An
                             increasing number of leases do not provide for any
                             maintenance payments to be made by lessees as
                             security for their maintenance obligations. Any
                             significant variations in these factors may
                             materially adversely affect the ability of
                             Airplanes Group to make payments of interest,
                             principal and premium, if any, on the notes and
                             certificates.

REDELIVERY CONDITIONS......  At least 90% of the leases provide for the aircraft
                             to be redelivered in a specified condition upon
                             expiration of the lease and/or stipulate the
                             payments to be made by the lessee to us or, in some
                             cases, by us to the lessee, to reflect the extent
                             to which the actual redelivery condition of the
                             aircraft falls below or exceeds the redelivery
                             condition specified in the lease.

INSURANCE..................  The lessees bear responsibility through an
                             operational indemnity to carry insurance for
                             liabilities arising out of the operation of the
                             aircraft. The indemnity includes liabilities for
                             death or injury to persons and damage to property
                             that ordinarily would attach to the operator of the
                             aircraft. The lessees are also required to carry
                             comprehensive liability insurance and hull
                             insurance, and any further insurance that is
                             customary in the commercial aircraft industry, and
                             to indemnify us against all liabilities, including
                             where the liability to us as owner and lessor
                             attaches by law. Generally, the leases require us
                             to be named as an additional insured on hull and
                             liability policies. Most of the leases also require
                             the lessee to maintain the liability insurance for
                             a specified period between one and two years after
                             termination of that lease. Under the servicing
                             agreement, the servicer is required to monitor the
                             lessees' performance of obligations with respect to
                             the insurance provisions of the applicable leases.
                             We also carry contingent hull and liability
                             insurance consistent with industry practice which
                             acts as a backup for Airplanes Group's interests in
                             instances where a lessee's policy does not satisfy
                             the requirements of the lease and acts as excess
                             coverage above that provided by a lessee's policy.
                             The amount of the contingent liability policies may
                             not be the same as the insurance required under the
                             lease. The amount of war third party contingent
                             insurance and other types of cover are subject to a
                             number of limitations imposed by the aviation
                             insurance industry particularly following the
                             terrorist attacks of September 11, 2001.

                             Most insurance certificates contain a breach of
                             warranty endorsement so that an additional insured
                             party remains protected even if the lessee
                                        34
<PAGE>

                             violates any of the terms, conditions or warranties
                             of the insurance policies, provided that the
                             additional insured party has not caused,
                             contributed to or knowingly condoned the breach.

THIRD PARTY LIABILITY
  INSURANCE................  The minimum third party liability limits under the
                             leases range from $250 million in respect of
                             turboprop aircraft to $750 million in respect of
                             widebody aircraft. In some cases, the lessee
                             carries more insurance than the minimum specified
                             in the lease. Following the terrorist attacks of
                             September 11, 2001, the aviation insurance markets
                             applied a $50 million limit on war third party
                             (non-passenger) liability insurance. We require
                             lessees to either buy additional insurance in the
                             commercial markets or obtain equivalent protection
                             under applicable governmental schemes. These
                             insurance issues have been mitigated in certain
                             jurisdictions by a number of temporary government
                             schemes and the emergence of limited available
                             insurance markets, however, failure by a lessee to
                             obtain adequate insurance cover as required under
                             its lease could result in the relevant aircraft
                             being grounded. This would likely reduce our
                             cashflows if as a result aircraft were returned
                             early and/or we do not receive rental payments from
                             lessees which are affected by such developments.

AIRCRAFT PROPERTY
INSURANCE..................  In all cases, the sum of the stipulated loss value
                             and our own additional coverage in place is at
                             least equal to the appraised value of the aircraft.
                             Permitted deductibles, which generally apply only
                             in the case of a partial loss, range from $50,000
                             for turboprop aircraft to $1 million for widebody
                             aircraft. Following insurance market developments
                             in the aftermath of the terrorist attacks of
                             September 11, 2001, the insurance market, on
                             January 1, 2002, ceased offering cover for
                             Confiscation by the State of Registration (as
                             required under the majority of leases). Such cover
                             is now available again, albeit at increased costs,
                             with additional imposed conditions and only for
                             certain jurisdictions. However, the lack of general
                             availability of cover for Confiscation by the State
                             of Registration risk means that this requirement
                             may not be currently satisfied under all of the
                             leases.

POLITICAL RISK INSURANCE...  With respect to some leases, we may arrange
                             separate political risk repossession insurance for
                             our own benefit, covering (a) confiscation,
                             nationalization and requisition of title of the
                             relevant aircraft by the government of the country
                             of registration and denegation and deprivation of
                             legal title and rights, and (b) the failure of the
                             authorities in that country to allow
                             de-registration and export of the aircraft, subject
                             to the conditions of the policies.

SUBLEASES AND WET LEASES...  Under most of our current leases, the lessee may
                             sublease the aircraft without our consent if
                             specified conditions are met. Under most of our
                             current leases, the lessee may also "WET LEASE" the
                             aircraft (leasing the aircraft to another airline
                             with a crew and services provided by the lessee)
                             without our consent so long as the lessee does not
                             part with operational control of the aircraft.
                             Where there is a sublease or a wet lease, the
                             lessee remains fully liable to us for all its
                             payment and performance obligations under the lease
                             and we have no contractual relationship with the
                             sublessee or the wet lessee. Leases with new
                             lessees are based on a pro forma lease that
                             includes restrictions on subleases and wet leases
                             into specified prohibited countries.

                                        35
<PAGE>

COMPLIANCE WITH GOVERNMENTAL AND TECHNICAL REGULATION

     In addition to the general requirements regarding maintenance of the
aircraft, aviation authorities from time to time issue ADs requiring the
operators of aircraft to take particular maintenance actions or make particular
modifications with respect to all aircraft of a particular type. Manufacturer
recommendations may also be issued. To the extent that a lessee fails to perform
ADs that are required to maintain its certificate of airworthiness or other
manufacturer requirements in respect of an aircraft (or if the aircraft is not
currently subject to a lease), Airplanes Group may have to bear or share (if the
lease requires it) the cost of compliance. Other governmental regulations
relating to noise and emissions levels may be imposed not only by the
jurisdictions in which the aircraft are registered, including as part of the
airworthiness requirements, but also in other jurisdictions where the aircraft
operate. A number of jurisdictions including the United States have adopted, or
are in the process of adopting, noise regulations which ultimately will require
all aircraft to comply with the most restrictive currently applicable standards.
Some of the jurisdictions that impose these regulations restrict the future
operation of aircraft that do not meet Stage 3 noise requirements and prohibit
the operation of those aircraft in those jurisdictions. As 1.42% of our
portfolio by appraised value as of January 31, 2004 did not meet the Stage 3
requirements as of March 31, 2004, these regulations may adversely affect
Airplanes Group because our non-compliant aircraft will not be able to operate
in those jurisdictions and we may incur substantial costs to comply with the
Stage 3 requirements.

     Moreover new ADs or noise or emissions reduction requirements may be
adopted in the future and these could result in significant costs to Airplanes
Group or adversely affect the value of, or our ability to re-lease, Stage 2 or
Stage 3 aircraft. In particular, certain organizations and jurisdictions are
currently considering "STAGE 4" requirements which would tighten noise and
emissions certification requirements for newly manufactured aircraft. If these
more restrictive requirements are adopted or applied to existing aircraft types,
it could result in significant costs to Airplanes Group or adversely affect the
value of, or our ability to re-lease, aircraft in our portfolio.

     Volume 2 of Annex 16 of the Chicago Convention also contains standards and
recommendations regarding limitations on vented fuel and smoke and gaseous
emissions for aircraft. While a number of countries have adopted regulations
implementing these recommendations, these regulations generally have been
prospective in nature, requiring only that newly manufactured engines meet
particular standards after a particular date. To the extent that these
regulations require modifications to the engines owned by Airplanes Group, they
would be treated similarly to ADs under the leases.

     Aviation authorities in Europe and North America have adopted regulations
requiring the installation of traffic collision avoidance systems, automatic
emergency locator transmitters and various other systems. Depending on whether
the costs of complying with these regulations are borne by us or the lessees,
installation of these systems could result in significant cash capital
expenditures by Airplanes Group in the future. In addition to the ADs discussed
below, we currently expect that the FAA and other aviation authorities may issue
further ADs to improve security on aircraft.

     One requirement is the installation of enhanced Ground Proximity Warning
System ("GPWS") in all aircraft by 2005, which has been mandated by the FAA and
the European Joint Airworthiness Authorities. GPWS is an avionics system which
detects an aircraft's proximity to the earth. The enhanced version enables the
system to correlate the aircraft's current position with a database of
obstructions in the horizontal plane (high mountain peaks, buildings, antennae
etc). All new generation Airbus and Boeing aircraft have GPWS and require only a
software upgrade. For the majority of our aircraft, installation of GPWS
requires the full modification, some of which are being completed under cost
sharing arrangements with lessees. The estimated cost to implement this
modification is $120,000 per aircraft. To the extent that compliance with this
or any further such ADs is not the responsibility of lessees under their leases,
or if the aircraft are not on lease, we may incur significant costs, which could
impact adversely our results of operations.

     The FAA issued an AD concerning insulation for the purpose of increasing
fire safety on MD-80 and MD-11 aircraft. At March 31, 2004, 29 aircraft
representing 19.45% of the portfolio by appraised value as of January 31, 2003,
were MD-11s and MD-80s. We are incurring significant costs in ensuring these
aircraft comply with these standards. It is estimated that the necessary
modification of the 29 aircraft will cost approximately $12.3 million.
                                        36
<PAGE>

To date, we have completed the modification of fourteen aircraft at a cost of
$6.1 million. We expect to complete the modification of the remaining aircraft
by June 30, 2005 at an estimated cost of $6.2 million.

     The FAA has issued an AD mandating the modification of affected lap joints
on Boeing 737 aircraft when an aircraft has completed 50,000 cycles. The
estimated cost to implement those modifications for each aircraft is
approximately $230,000. Based on the current cycles completed to date, our 56
Boeing 737 aircraft, representing 34.99% of our portfolio by appraised value at
January 31, 2004, are not likely to require these modifications prior to 2007.
However, after that date we will incur significant costs in ensuring our Boeing
737 aircraft comply with these standards, which could impact adversely our
results of operations.

     The FAA has issued an AD affecting all Boeing 737 aircraft, mandating the
installation of a new rudder power control unit and changes to adjacent systems
in order to rectify an unsafe condition which has led to a jammed or restricted
control of the rudder in the past. The manufacturer will supply most of the
parts of engineering as this is a recognized design problem and the average cost
per aircraft of the labour is expected to be approximately $15,000 and is to be
completed before November 2008. If the costs are not the responsibility of some
or all lessees under their leases, or if the aircraft are not on lease, we could
incur costs in ensuring that our 56 Boeing 737 aircraft comply with these
modifications, which could impact adversely our results of operations.

     In light of the events of September 11, 2001, the regulatory authorities
issued Special Federal Aviation Regulation Amendments mandating the
installation, before April 2003 in the US and November 2003 in Europe, of
ballistic and blunt impact resistance flight doors allowing for controlled
cockpit access as well as emergency ingress and egress to and from the cockpit.
The estimated cost varies across aircraft type depending on the current door
configuration but averaging approximately $40,000. There may be further
requirements in this area relating to transponder upgrades and on board video
surveillance systems in the near future. As regulations currently stand the
majority of aircraft will be modified by the lessee with no cost to us. However
such requirements may increase remarketing costs for aircraft currently
off-lease or which are returned to us over the next twelve months.

THE LESSEES

     As of March 31, 2004, 153 of our aircraft were on lease to 58 lessees in 35
countries throughout the world. See "-- Portfolio Information" for the countries
and regions where our lessees reside.

     A number of our lessees are in a relatively weak financial position. As of
March 31, 2004, amounts outstanding for a period greater than 30 days in respect
of rental payments, maintenance reserves and other miscellaneous amounts due
under the leases (net of amounts in respect of default interest and cash in
transit) amounted to $3.6 million in respect of 15 lessees (who leased a
combined total of 53 aircraft representing 32.2% of our portfolio by appraised
value as of that date) and $3.6 million in respect of five former lessees. Of
the total $7.2 million, $1.2 million was in arrears for a period between 30 and
60 days, $0.7 million was in arrears for a period between 60 and 90 days and
$5.3 million was in arrears for a period greater than 90 days. Some of these
lessees have consistently been significantly in arrears in their respective
rental payments and many are known to be currently experiencing financial
difficulties.

     As of March 31, 2004, in addition to the $7.2 million in respect of
payments past due more than 30 days, we had agreed to allow six lessees to defer
rent, maintenance and miscellaneous payments totaling $13.4 million for periods
ranging from seven months for one lessee in respect of $0.1 million and up to 46
months for one lessee in respect of $4.1 million. Restructurings have typically
involved delaying rental payments for certain periods and/or the reduction of
current rentals usually in exchange for extensions of the relevant leases. In
addition, some restructurings have involved forgiveness of amounts of past due
rent, voluntary terminations of leases prior to lease expiration, the
replacement of aircraft with less expensive aircraft and the arrangement of
subleases from the lessee to another aircraft operator. In other cases, it has
been necessary to repossess aircraft from lessees which have defaulted and
re-lease the aircraft to other lessees. While the servicer attempts to limit
concessions, the current international commercial aircraft market is
characterized not only by a large number of weak lessees, but also by
overcapacity of available aircraft in every aircraft category and restructuring
of leases is often the only way to keep our aircraft in use and earning
revenues. The servicer is still pursuing negotiations with some lessees and we
expect further restructurings to be agreed with a consequent adverse effect on
operating revenues.

                                        37
<PAGE>

     In addition to difficulties which have affected lessees in a given region,
individual lessees have experienced periodic difficulties in meeting their
maintenance obligations under the related leases. The difficulties have arisen
from, among other things, the failure of the lessee to have in place a
sufficiently well established maintenance program, adverse climate and other
environmental conditions in the locations where the related aircraft is operated
or financial and labor difficulties experienced by the relevant lessee. A
continuous failure by a lessee to meet its maintenance obligations under the
relevant lease could result in a grounding of the aircraft, cause us to incur
substantial costs in restoring the aircraft to an acceptable maintenance
condition before we can re-lease or sell it and adversely affect the value of
the aircraft.

     The following is a discussion of the lessees experiencing difficulty by
region in which they are located.

LATIN AMERICA

     At March 31, 2004, lessees with respect to 16.88% of the aircraft by
appraised value as of January 31, 2004 operated in Latin America, principally
Brazil, Mexico and Colombia. The prospects for lessee operations in these
countries depend in part on the general level of political stability and
economic activity and policies in those countries. Future developments in the
political systems or economies of these countries or the implementation of
future governmental policies in these countries may materially affect these
lessees' operations.

     Brazil.  The instability in the Brazilian economy experienced in recent
years means that lessees may be unable to generate sufficient revenues in
Brazilian currency to pay rental payments in U.S. dollars under the leases. At
March 31, 2004, Airplanes Group leased 9 aircraft representing 3.02% of our
portfolio by appraised value as of January 31, 2004 to operators in Brazil.
Accordingly, any future deterioration in the Latin American economies,
especially Brazil, could lead to a decrease in Airplanes Group's leasing
revenues and an increase in default related costs.

     At March 31, 2004, we had eight F-100 aircraft, representing 2.62% of our
portfolio by appraised value as of January 31, 2004, on lease to a Brazilian
lessee. The lessee signed an agreement which provides for rental deferrals of
35% to 50% for the period to December 2002, with repayment before the expiry of
the current leases in 2007 and 2008. The lessee has to date continued to meet
its obligations to us.

     A former Brazilian lessee of three MD-11 aircraft, representing 5.80% of
our portfolio by appraised value as of January 31, 2004, due to trading
difficulties, is currently in arrears. The servicer, following discussions with
the lessee agreed to the early return of the aircraft during 2003. All aircraft
have been returned. The servicer has signed a settlement agreement in respect of
the lessee's obligations.

     During the year ended March 31, 2004, a former Brazilian lessee of three
B737-500 aircraft, representing 2.10% of our portfolio by appraised value at
January 31, 2004 was in arrears. The servicer agreed to the early return of the
aircraft prior to March 31, 2003, and has signed a settlement agreement in
respect of the lessee's obligations.

     In addition, in 1999, we entered into a restructuring agreement with a
former Brazilian lessee, under which it repaid a restructured amount of
approximately $1.9 million over 12 months. During the year ended March 31, 2004,
the lessee's balance was offset against an accounting provision which had been
made against our receivables for the excess of the arrears over the cash
security held.

     See "Item 3. Legal Proceedings" for details of legal proceedings involving
a Brazilian airline.

     Colombia.  Colombia has recently suffered economically as a result of the
deterioration in the value of the Colombian peso and the resulting negative
impact on the Colombian economy. As of March 31, 2004, we leased nine aircraft,
representing 6.26% of our portfolio by appraised value as of January 31, 2004,
to two Colombian lessees. Because of the continued weakness in the value of the
Colombian peso, as well as general deterioration in the Colombian economy, these
lessees may be unable to generate sufficient revenues in Colombian pesos to pay
the U.S. dollar denominated rental payments under the leases.

     In particular, as of March 31, 2004, we leased six aircraft, representing
5.13% of our portfolio by appraised value as of January 31, 2004, to one of our
two Colombian lessees. The lessee filed for Chapter 11 bankruptcy protection in
the US in 2003 and following the expiry of its initial 60 day bankruptcy
protection period
                                        38
<PAGE>

recommenced making payments of amounts falling due. The airline continues to be
under Chapter 11 bankruptcy protection. During the year to March 31, 2004, the
servicer concluded discussions with the lessee regarding a lease restructuring
which resulted in rental reductions combined with lease extensions.

     During the year ended March 31, 2004, following bankruptcy a former
Colombian lessee redelivered one aircraft, representing 0.20% of our portfolio
by appraised value as of January 31, 2004. The servicer has lodged a claim
relating to redelivery and other charges.

     During the year ended March 31, 2004, one Antiguan lessee of five aircraft,
representing 0.82% of our portfolio by appraised value as of January 31, 2004,
agreed with the servicer to a restructuring, in which the lessee would pay its
arrears over a 24 month period.

NORTH AMERICA

     As of March 31, 2004, we had 12 aircraft, representing 5.34% of our
portfolio by appraised value as of January 31, 2004, on lease to six U.S.
lessees, and eight aircraft, representing 7.47% of our portfolio by appraised
value as of January 31, 2004, on lease to two Canadian lessees. The commercial
aircraft industry in North America is highly sensitive to general economic
conditions. Since air travel is largely discretionary, the industry has suffered
severe financial difficulties during economic downturns. Over the last several
years, the majority of the major North American passenger airlines have entered
into plans of reorganization or sought protection through bankruptcy, insolvency
or other similar proceedings and several major U.S. airlines have ceased
operations. The general downturn in the economy combined with the effects of
September 11, 2001, subsequent terrorist and military activities and the
outbreak of SARS together with the reduction in passenger numbers and flight
schedules has left many U.S. airlines in a weakened financial condition.

     At March 31, 2004, we leased six aircraft, representing 6.28% of our
portfolio by appraised value as of January 31, 2004 to one Canadian lessee. The
lessee, which has been under the protection of the Companies Creditors
Arrangement Act (Canada) since March 2003, resumed making payments in July 2003
and continues to do so. The servicer has agreed a restructuring of the leases
resulting in a reduction in lease rentals. The court has approved the entry by
the lessee into this restructuring.

     In the year ended March 31, 2004, a lessee of one aircraft representing
0.79% of our portfolio by appraised value as of January 31, 2004 filed for
Chapter 11 bankruptcy protection. The aircraft was rejected as part of the
Chapter 11 proceedings and has been redelivered. The servicer is pursuing all
amounts outstanding in respect of the lessee's obligations.

ASIA & FAR EAST

     As of March 31, 2004, 30 aircraft representing 15.95% of our portfolio by
appraised value as of January 31, 2004 were on lease to 12 lessees in this
region. Since 1999, there has been some stabilization and recovery in the
economies of this region. However, a decline in tourism in this area may
adversely affect demand for aircraft in the region.

     In the final quarter of the year ended March 31, 2003, this region in
particular, was subject to the outbreak of SARS. This led to widespread
disruption in travel within and from outside the region. Airlines suffered
substantial cutbacks in the number of passengers travelling and flight schedules
were reduced, but are now largely recovered.

     Indonesia.  At March 31, 2004, an Indonesian lessee of two aircraft
representing 0.20% of our portfolio by appraised value as of January 31, 2004
was in arrears. The servicer has issued default notices to the lessee and is
currently in discussions regarding outstanding amounts due.

EUROPE (EXCLUDING CIS)

     As of March 31, 2004, 49 aircraft representing 36.16% of our portfolio by
appraised value as of January 31, 2004 were on lease to 20 lessees in this
region. The commercial aircraft industry in European countries, as in the rest
of the world generally, is highly sensitive to general economic conditions.
Accordingly, the financial
                                        39
<PAGE>

prospects for European lessees can be expected to depend largely on the level of
economic activity in Europe generally and in the specific countries in which
these lessees operate. In addition, commercial airlines in Europe face, and can
be expected to continue to face, increased competitive pressures, in part as a
result of the continuing deregulation of the airline industry by the EU. There
can be no assurance that competitive pressures resulting from such deregulation
will not have a material adverse impact on the operations of our European
lessees.

     Turkey.  At March 31, 2004, a Turkish lessee of one A300 aircraft,
representing 0.41% of our portfolio by appraised value as of January 31, 2004,
was in arrears. Default notices have been issued by the servicer and discussions
continue regarding the payment of arrears.

AFRICA

     As of March 31, 2004, six aircraft representing 6.19% of our portfolio by
appraised value as of January 31, 2004, were on lease to four lessees in this
region. Given the age and type of aircraft in our portfolio, this region
represents an area of growing opportunity for the successful lease placement of
our aircraft.

OTHER

     We have three aircraft, representing 3.01% of our portfolio by appraised
value as of January 31, 2004, on lease to one lessee, in Ukraine.

PURCHASE OPTIONS

     As of March 31, 2004, five lessees with respect to six aircraft,
representing 3.81% of our portfolio by appraised value as of January 31, 2004,
held options to purchase aircraft. The purchase price will be less than the
proportionate share of unpaid principal of the notes and certificates allocable
to the aircraft being purchased. If these options are exercised there could be
additional reductions in the amount of cash available to us.

COMMERCIAL OPPORTUNITIES FOR CERTAIN TYPES OF OUR AIRCRAFT

     The market for certain aircraft models is currently very weak and is
expected to remain so. We are examining all possibilities in respect of the
remarketing of the aircraft including leasing, sale or conversion to freighter
configuration.

     Our indentures previously restricted our ability to sell aircraft. Sales of
an aircraft were generally permitted only if the sales proceeds were at least
equal to 105% of the aggregate outstanding class A to D principal allocable to
that aircraft by reference to the most recent appraised value (the "note target
price"). Where note target price could not be achieved, sales were subject to,
among other conditions, a $50 million annual limit and a $500 million overall
limit (determined in each case by reference to the appraised value of the
aircraft to be sold at the original acquisition of the portfolio in 1996). As a
result of the market price for aircraft declining due to the factors discussed
in "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Recent Developments", it had become increasingly
difficult to achieve sales of aircraft at or above note target price. Our
ability to generate sales of aircraft at or above note target price further
declined as we fell behind our 2001 Base Case assumptions as to our principal
repayments and this indenture restriction presented a real impediment to the
ability of the servicer to maximize cashflow from the portfolio. For example it
may have been in the best economic interests of Airplanes Group to sell a
specific aircraft if a suitable opportunity was available rather than lease it
or have it non-revenue earning (and requiring outlay for storage, maintenance
and insurance), yet the indentures prohibited this. As the annual limitation on
aircraft sales below note target price was by reference to the appraised value
of the aircraft at the initial acquisition by us, few aircraft could be sold
below note target price in any year and some, with an initial appraised value in
excess of $50 million, could never be sold pursuant to this exception.

     As further discussed under "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Recent Developments", the board
of directors of Airplanes Limited and the controlling trustees of Airplanes
Trust resolved to undertake a consent solicitation seeking, among other things,
to amend the indentures to permit sales of aircraft below note target price
where the board of directors of Airplanes Limited or
                                        40
<PAGE>

the controlling trustees of Airplanes Trust, as applicable have unanimously
confirmed that such a sale is in the best interests of Airplanes Group and the
noteholders and certain other conditions are met. This consent solicitation was
successfully completed and the indentures accordingly amended in September 2003.

     Based on the recommendations of the servicer and the administrative agent,
the board of directors of Airplanes Limited and the controlling trustees of
Airplanes Trust had previously identified a number of aircraft types for
potential sale. The aircraft types which had been identified for potential sale
were typically older and predominantly stage 2 aircraft, including B737-200s,
DC9s, A300s, and turboprop aircraft. At March 31, 2004, there was a total of 45
aircraft of these aircraft types in our portfolio representing 7.94% of our
portfolio by appraised value as of January 31, 2004. Since June 1999, we have
sold thirty aircraft of these aircraft types for an aggregate of $47.9 million
(including sales proceeds and capital lease bullet payments), which has been
applied in accordance with the priority of payments provided under the
indentures.

     However, as sales were previously limited by the restrictions in our
indentures as discussed above, it was difficult to sell more than a small number
of these aircraft each year. At March 31, 2004, we had nineteen aircraft
off-lease, five of which (two B737-200As and three DC8-71Fs) were subject to
letters of intent for sale. The sale of these five aircraft at less than note
target price would not have been previously possible in any one financial year,
as the total initial appraised value of these aircraft would have exceeded the
$50 million annual limit. As of the date of this Form 10-K, one of the two
B737-200As and the three DC8-71Fs had been sold, the second B737-200A had become
subject to a contract for sale, eight of the remaining fourteen unplaced
aircraft have become subject to letters of intent for sale (three MD11s, three
DC9-32s, one ATR42-300 and one DHC8-100) and the remaining six off-lease
aircraft have also been identified as candidates for sale (three DC8-71Fs, two
MD83s and one DC9-32). In addition three further aircraft (one B747-200SF, one
DC9-32 and one MD83) have become off lease and are available for remarketing and
two further aircraft (one DHC8-300C and one A300 C4-200) still on lease have
become subject to letters of intent for sale.

     While letters of intent for sale have been signed by the servicer in
respect of three MD-11s, one DHC8-300C and one A300C4-200, the servicer is still
in the process of analysing the economic effect of the proposed terms and
conducting due diligence and we have not yet determined whether a sale on those
terms is the best economic prospect for each of these aircraft.

     As can be seen from the aircraft types listed, the servicer is now able to
realistically assess each aircraft at redelivery in order to recommend to the
board whether it should be sold or leased, based on which option maximizes our
cashflow, knowing that the indenture restrictions on sales have been amended.
This means the aircraft types not previously considered can now be marketed for
sale. In addition to the nineteen off lease aircraft at March 31, 2004, an
additional four aircraft (three DC8-71Fs and one DC9-32) scheduled to redeliver
in the next year have been identified as potential sales candidates based on the
current condition of the aircraft and the current leasing and sales markets.
Other redeliveries scheduled for the next year and beyond this point would also
include potential sales candidates but will be fully assessed closer to
redelivery. None of these aircraft sales, if completed, will generate sufficient
cashflow to repay a proportionate amount of the notes and certificates, but in
circumstances where we believe there are no existing or foreseeable better
alternative economic prospects for an aircraft, we consider it is better to
realize what cash we can as soon as possible.

ITEM 2.  PROPERTIES

     Airplanes Group has no ownership or leasehold interest in any real
property.

     Airplanes Limited's registered and principal office is located at 22
Grenville Street, St. Helier, Jersey, JE4 8PX, Channel Islands and its telephone
number is +44-1534-609000.

     Airplanes Trust's principal office is located at 1100 North Market Street,
Rodney Square North, Wilmington, Delaware 19890-0001, care of Wilmington Trust
Company and its telephone number is +1-302-651-1000.

     For a description of Airplanes Group's interest in other property, see
"Item 1. Business -- The Aircraft, Related Leases and Collateral."

                                        41
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     Following the default by the Brazilian airline VASP under its leases, GPA
Group (now known as debis AirFinance Ireland) sought and obtained in November
1992 a preliminary injunction for repossession of 13 aircraft and three engines,
and subsequently repossessed these aircraft and engines. Airplanes Group
acquired seven of these aircraft from GPA Group in March 1996, four of which
remain in our portfolio, representing 1.91% of our portfolio by appraised value
as of January 31, 2004. In December 1996, the High Court in Sao Paolo, Brazil,
found in favor of VASP on appeal and granted it the right to the return of the
aircraft and engines or the right to seek damages against debis AirFinance
Ireland. debis AirFinance Ireland challenged this decision and in January 2000,
the High Court granted a stay of the 1996 judgment while it considered debis
AirFinance Ireland's rescission action. In April 2002, the High Court found in
favour of debis AirFinance Ireland's rescission action and overturned the 1996
judgement in favour of VASP. VASP has actively pursued appeals to this decision.
debis AirFinance Ireland will continue to actively pursue all available courses
of action, including defending appeals to superior courts which may seek to
overturn the High Court decision of April 2002. A risk of repossession would
only arise if VASP were successful on appeal in seeking repossession of the
aircraft and the aircraft were located in Brazil. Although none of our lessees
which lease any of the relevant aircraft is based in Brazil, some of them may
operate those aircraft into Brazil from time to time.

     AeroUSA and AeroUSA 3 have in the past filed U.S. federal consolidated tax
returns and certain state and local tax returns with debis AirFinance, Inc.
(then known as AerFi, Inc.) and its subsidiaries. There are no ongoing tax
audits by certain state and local tax authorities with respect to tax returns
previously reported by debis AirFinance, Inc. and its subsidiaries.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

     None.

                                        42
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Airplanes Limited has an authorized share capital of 10,000 ordinary
shares, with $1 par value per share. 30 ordinary shares of Airplanes Limited
have been issued and are outstanding. The ordinary shares of Airplanes Limited
are not listed on any national exchange or traded in any established market.
These shares are held by Juris Limited and Lively Limited, each a Jersey limited
liability company, as bare nominees for the benefit of the following three
"CHARITABLE TRUSTS":

<Table>
<Caption>
TITLE OF CLASS                              NAME AND ADDRESS            NUMBER OF SHARES   PERCENT OF CLASS
--------------                              ----------------            ----------------   ----------------
<S>                                 <C>                                 <C>                <C>
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust I,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust II,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust III,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
</Table>

     Under its articles of association, Airplanes Limited pays an annual fixed
cumulative preferential dividend of $4,500 (the "ANNUAL DIVIDEND AMOUNT") to the
holders of its capital stock, but only when it has distributable profits which
may lawfully be paid as dividends and provided that no event of default has
occurred and is continuing.

     Mourant & Co. Trustees Limited, as trustee of each of the three charitable
trusts, has agreed pursuant to a shareholders' agreement with Airplanes Limited
and the indenture trustee not to transfer any part of the capital stock of
Airplanes Limited without the prior written approval of the indenture trustee
and all the directors of Airplanes Limited, unless the transferee is a trustee
of a substantially identical charitable trust and enters into a substantially
identical shareholders' agreement.

ITEM 6.  SELECTED COMBINED FINANCIAL DATA

     The selected combined financial data set out below for each of the years in
the five year period ended March 31, 2004 have been extracted or derived from
the financial statements of Airplanes Group, which have been audited by KPMG,
independent chartered accountants. These financial statements have been prepared
in accordance with generally accepted accounting principles in the United
States.

     The selected combined financial data set forth below combine the operating
results, assets, liabilities and cashflows of Airplanes Limited and Airplanes
Trust. The separate balance sheets, statements of operations, statements of
comprehensive income/(loss), statements of changes in shareholders' deficit/net
liabilities and statements of cashflows, and notes thereto, of Airplanes Limited
and Airplanes Trust are contained in the financial statements included in "Item
15. Exhibits, Financial Statement Schedules and Reports on Form 8-K."

                                        43
<PAGE>

The directors of Airplanes Limited and the controlling trustees of Airplanes
Trust believe that a combined presentation is most appropriate because:

     -  the assets of Airplanes Limited and Airplanes Trust are managed on the
        basis of one combined aircraft fleet, and

     -  each of Airplanes Limited and Airplanes Trust has fully and
        unconditionally guaranteed the performance of the other under their
        respective notes.

You should note that the notes and the guarantees comprise obligations of two
different legal entities owning different assets. However, the notes and
guarantees have been structured in the indentures to ensure that no payments are
made on a junior class of notes or guarantees of Airplanes Trust before all
amounts due and payable on a more senior class of notes or guarantees of
Airplanes Limited have been paid, and no payments are made on a junior class of
notes or guarantees of Airplanes Limited before all amounts due and payable on a
more senior class of notes or guarantees of Airplanes Trust have been paid.

     Aircraft assets are stated on the "predecessor cost basis," that is,
reflecting debis AirFinance Ireland's historical cost less accumulated
depreciation and impairment provisions. The difference between the predecessor
cost basis and the amount of Airplanes Group's indebtedness is a significant
component of total shareholders' deficit in the combined balance sheet data. The
statements below are presented without provisions for loss making leases as
further detailed in the notes to the financial statements at note 4.

COMBINED STATEMENT OF OPERATIONS DATA(1)

<Table>
<Caption>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                   -------------------------------------------
                                                   2000     2001     2002     2003      2004
                                                   -----    -----    -----    -----    -------
                                                                  (IN MILLIONS)
<S>                                                <C>      <C>      <C>      <C>      <C>
REVENUES(2)
Aircraft leasing.................................  $ 501    $ 471    $ 410    $ 358    $   267
Aircraft sales...................................      3       21        5       14          3
Other income.....................................      1       --       --       --         --
EXPENSES
Cost of aircraft sold............................     (1)     (14)      (2)     (15)        (1)
Depreciation.....................................   (174)    (170)    (159)    (140)      (116)
Impairment Charge................................     --       --     (292)     (76)      (373)
Net interest expense(3)..........................   (468)    (536)    (609)    (725)      (854)
Bad and doubtful debts...........................     (4)      (7)      (3)      (6)         5
Other lease costs................................    (74)     (83)     (73)     (77)       (82)
Selling general and administrative expenses......    (34)     (35)     (36)     (33)       (37)
Tax (charge)/benefit.............................     (7)      20       64        8         17
                                                   -----    -----    -----    -----    -------
Net loss.........................................  $(257)   $(333)   $(695)   $(692)   $(1,171)
                                                   =====    =====    =====    =====    =======
</Table>

COMBINED BALANCE SHEET DATA(1)

<Table>
<Caption>
                                                               AS OF MARCH 31,
                                             ---------------------------------------------------
                                              2000       2001       2002       2003       2004
                                             -------    -------    -------    -------    -------
                                                                (IN MILLIONS)
<S>                                          <C>        <C>        <C>        <C>        <C>
Aircraft, net, and net investment in
  capital and sales-type leases............  $ 2,947    $ 2,759    $ 2,296    $ 2,058    $ 1,558
  Total assets.............................    3,206      3,023      2,523      2,275      1,710
                                             -------    -------    -------    -------    -------
Indebtedness(3)............................   (3,636)    (3,495)    (3,314)    (3,209)    (3,103)
Provision for maintenance..................     (274)      (246)      (257)      (275)      (287)
  Total liabilities........................   (4,902)    (5,052)    (5,283)    (5,769)    (6,348)
                                             -------    -------    -------    -------    -------
Net liabilities............................   (1,696)    (2,029)    (2,760)    (3,494)    (4,638)
                                             =======    =======    =======    =======    =======
</Table>

                                        44
<PAGE>

COMBINED STATEMENT OF CASHFLOW DATA(1)

<Table>
<Caption>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                    -----------------------------------------
                                                    2000     2001     2002     2003     2004
                                                    -----    -----    -----    -----    -----
                                                                  (IN MILLIONS)
<S>                                                 <C>      <C>      <C>      <C>      <C>
Cash paid in respect of interest(3)...............  $ 214    $ 210    $ 186    $ 179    $ 127
Net cash provided by operating activities (after
  payment of interest)............................  $ 181    $ 105    $ 120    $  91    $  47
Net cash provided by investing activities.........      8       26        9       16        3
Net cash used in financing activities.............   (210)    (137)    (184)    (108)    (108)
                                                    -----    -----    -----    -----    -----
Net decrease in cash..............................  $ (21)   $  (6)   $ (55)   $  (1)   $ (58)
                                                    =====    =====    =====    =====    =====
</Table>

OTHER DATA(1)

<Table>
<Caption>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                   -------------------------------------------
                                                   2000     2001     2002     2003      2004
                                                   -----    -----    -----    -----    -------
                                                                  (IN MILLIONS)
<S>                                                <C>      <C>      <C>      <C>      <C>
Deficiency of combined earnings after combined
  fixed charges(4)...............................  $(250)   $(353)   $(761)   $(700)   $(1,188)
</Table>

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

(1)  The financial statements of Airplanes Group are stated in U.S. dollars
     which is the principal operating currency of Airplanes Group and the
     aviation industry.

(2)  Revenues include maintenance reserve receipts. See Note 14 to the financial
     statements.

(3)  Net interest expense is significantly higher than cash paid in respect of
     interest in all periods reflecting the high interest rate accruing on the
     class E notes (20% adjusted for inflation) relative to the lower amount of
     cash interest payable on the class E notes for so long as the other classes
     of notes remain outstanding. Net interest expense is stated after crediting
     interest income of $13 million in 2000, $14 million in 2001, $6 million in
     2002, $3 million in 2003, and $2 million in 2004. In the year ended March
     31, 2002 Net interest expense includes an adjustment of US$(5) million in
     relation to the effect of change in accounting principle on the adoption of
     SFAS 133.

(4)  Deficiency of combined earnings after combined fixed charges represents the
     amount by which Airplanes Group's loss before income taxes and fixed
     charges exceeded fixed charges. Fixed charges consists of interest expense.
     Because our fixed charges exceeded earnings for all periods presented, a
     ratio of earnings to fixed charges is not presented.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

INTRODUCTION

     The following discussion and analysis is based primarily on the combined
operating results of Airplanes Limited and Airplanes Trust and not on their
results reported as individual entities. You should note that the notes and the
guarantees comprise obligations of two different legal entities owning different
assets. The directors and the controlling trustees believe that a combined
discussion is the most appropriate basis of presentation because:

     -  Airplanes Limited and Airplanes Trust are not intended to be regarded as
        separate businesses but rather on the basis of one combined aircraft
        fleet, and

     -  each of Airplanes Limited and Airplanes Trust has fully and
        unconditionally guaranteed the performance of the other under their
        respective notes.

The notes and guarantees have been structured in the indentures to ensure that
no payments are made on a junior class of notes of Airplanes Trust or Airplanes
Limited, as the case may be, before all amounts due and payable on

                                        45
<PAGE>

a more senior class of notes of Airplanes Limited or Airplanes Trust,
respectively, have been paid pursuant to the terms of the more senior classes of
notes or the guarantees of these notes.

     Substantially all of Airplanes Group's future business is expected to
consist of aircraft operating lease activities and sales. Airplanes Group's
revenues and operating cashflows are determined by a number of significant
factors, including:

     -  trading conditions in the civil aviation industry and, in particular,
        the market for aircraft on operating leases,

     -  the mix, relative age and popularity of the various aircraft types in
        our portfolio, and

     -  Airplanes Group's financial resources and liquidity position relative to
        its competitors who may possess substantially greater financial
        resources.

     Except to the extent that the strength of the U.S. dollar against some
local currencies may adversely affect the ability of some of our lessees who
operate in those currencies to pay us, the effect of changes in currency rates
on Airplanes Group is minimal because Airplanes Group conducts its business
almost entirely in U.S. dollars.

RECENT DEVELOPMENTS

OVERVIEW

     In the year to March 31, 2004, we have continued to suffer from a difficult
business environment. During the past three years, the world economic climate
has been weak. The global economic conditions, combined with the terrorist
attacks of September 11, 2001, the military action of the U.S. and its allies in
Afghanistan, the war in Iraq, the continued threat of terrorist attacks and the
outbreak, in early 2003, of SARS have severely impacted the commercial aviation
industry.

     As previously reported, the resulting reduction in passenger numbers and
consequential reduction in flight schedules by airlines has caused a continued
decline in demand for aircraft. Demand for freighter aircraft has also fallen.
Some carriers, including two US majors (United Airlines and US Airways) and also
two of our lessees (one Canadian and one Colombian), have filed for bankruptcy,
while others, including many of our lessees, have suffered large losses or face
severe financial difficulties. Oversupply of aircraft has resulted in increased
aircraft downtime, aircraft being parked, a fall in market value of aircraft
(especially older technology and less fuel-efficient aircraft or models no
longer in production) and lower lease rates throughout the industry. We have
ourselves experienced decreasing revenues resulting from increased time between
redelivery and re-leasing of aircraft, a decline in lease rates upon re-leasing
or extensions of leases, and a decline in sales prices for our aircraft. We have
already executed a substantial number of rental restructurings, typically
involving the rescheduling of rental payments over a specified period and/or the
reduction of current rentals usually in return for extensions of the relevant
leases. These arrangements sometimes include forgiveness of amounts in respect
of rental arrears. While the servicer attempts to limit concessions, the current
worldwide commercial aircraft market is characterized not only by a large number
of weak lessees, but also by overcapacity of available aircraft in almost every
aircraft category and restructuring of leases is often the only way to keep our
aircraft in use and earning revenues. Since these arrangements usually extend
for the duration of the relevant leases and/or involve lease extensions, they
have a continuing effect on cashflow. In addition, we currently expect new ADs
to be issued to improve security on aircraft, the costs of compliance with
which, to the extent that they are not the responsibility of lessees under their
leases or if the aircraft are not on lease, will be our responsibility. See
"Item 1. Compliance with Governmental and Technical Regulation" above.

AIRCRAFT APPRAISED VALUES

     There has been a decline of 15.21% in the appraised value of our fleet in
the year to January 31, 2004, which is $176 million greater than the decline
assumed in our 2001 Base Case assumptions. The appraised values are based upon
the value of the aircraft at normal utilization rates in an open, unrestricted
and stable market, and take into account long-term trends, including current
expectations of particular models becoming obsolete more
                                        46
<PAGE>

quickly, as a result of airlines switching to different models, or lease values
for aircraft declining more rapidly than previous predictions. Notwithstanding
the significant decline in appraised values, the appraised value of each of our
aircraft is still higher and in some cases, such as the MD-11, significantly
higher than its market value. Therefore, as a theoretical value, the appraised
value should not be viewed as indicative of market value and thus there is no
guarantee that we would obtain the appraised value upon sale of any aircraft. As
discussed in "Item 1. Business -- Risks Relating to Payment on the Notes and
Certificates" decreases in appraised values have previously resulted in the
requirement to pay class A principal adjustment amount to the extent of
available cashflows. If the current oversupply of aircraft continues longer
term, given the age of our fleet, certain of our aircraft may become obsolete
significantly earlier than the useful life expectancy assumed in the 2001 Base
Case assumptions, which would negatively impact appraised values further.
However, since we are no longer able to pay class A principal adjustment amount
and since, as a result of our consent solicitation, we are no longer required to
sell our aircraft at or above the note target price, the appraised values of our
aircraft are now of little significance except as a basis for providing
statistical information on the portfolio and for complying with certain
technical provisions in the indentures.

PERFORMANCE

     We have been unable to meet all of the 1996 Base Case assumptions or the
2001 Base Case assumptions. In light of continued lease restructurings and a
weak leasing market generally we are generating revenues at significantly lower
levels than we had assumed and at levels which have been inadequate to pay
minimum principal on the class A notes in full, or to pay any interest or
minimum principal on the class B notes or any interest on the class C and class
D notes, since the December 15, 2003 payment date. Even though, as a result of
the consent solicitation (described more fully in "-- Consent Solicitation for
Indenture Amendments" below) we are now able to sell aircraft which we may not
have been able to sell previously, such sales in the current market are
difficult to achieve and where sales have been completed, they have not yielded
sales proceeds sufficient to repay a proportionate amount of the notes and
certificates or even to make a significant difference to our cashflow. On each
payment date we are currently only paying in full our administrative and lease
expenses and certain other payments in the ordinary course of business, interest
on the class A notes and swap payments, and the "First Collection Account
Top-Up". We use any remaining cashflows towards payment of minimum principal on
the class A notes which at May 17, 2004 was $24.3 million in arrears. It is
highly unlikely that we will ever be able to resume making payments of interest
or principal on the class B, C and D notes. For a detailed background see "Item
1. Business -- Risk Factors -- Risks Relating to Payments on the Notes and
Certificates -- Our reduced cashflows mean that we are unable to make payments
on junior notes and certificates."

REMEDIES

     In general, the rights and remedies with respect to a note event of default
are exercisable only by the trustee of and the holders of the most senior class
of notes outstanding, and then only to the extent that there is an event of
default with respect to that senior class of notes. For example, a failure to
make a required payment on a class of notes is a default only with respect to
that class of notes and the corresponding certificates. Accordingly, if, as
occurred on December 15, 2003 when we were unable to pay interest on the class
B, C and D notes, an event of default occurs with respect to a class of notes
which is not the most senior class outstanding, the holders of that class of
notes (and thus, the corresponding certificates) will not be permitted to
enforce their rights until all amounts owing under any more senior class of
notes outstanding and certain other amounts have been paid in full. The class A
notes are the most senior class of notes currently outstanding.

IMPAIRMENT

     Aircraft are periodically reviewed for impairment in accordance with
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long Lived Assets ("SFAS 144"). An impairment loss is
evaluated when the undiscounted estimated future cashflows of the aircraft are
less than its carrying value and the loss is measured as the excess of the
carrying value over the fair value.

     The fair value of the aircraft is generally based on independent appraisals
of aircraft. The appraised values are determined based on the assumption that
there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". On the basis of past experience including actual
lease rates and sales

                                        47
<PAGE>

prices achievable and the servicer's experience of the market, estimated
discounted cashflows are used as a more accurate indication of fair value. The
estimated discounted future cashflows assume, among other things, market lease
rates at the end of the existing lease term, other lease costs, downtime and the
risk inherent in the cashflows.

     The impairment provision of $373 million in the year to March 31, 2004
reflects perceived poor future lease prospects for these aircraft.

RATINGS

     The vulnerability of the various classes of notes has been reflected in
actions taken by the rating agencies which continue to re-evaluate structured
aircraft financings.

     Set out in the table below are the ratings of our certificates at June 14,
2004:-

<Table>
<Caption>
                                                               OUTSTANDING
                                                                PRINCIPAL
                                                              BALANCE AS AT
                                                                 MAY 17,                       MOODY'S (S&P
                        CERTIFICATE                               2004        S & P   FITCH     EQUIVALENT)
                        -----------                           -------------   -----   -----   ---------------
<S>                                                           <C>             <C>     <C>     <C>
Subclass A-6................................................    $     74.5m   AA-     BBB-    A2 (A)
Subclass A-8................................................    $    700.0m   A       BB      Baa3 (BBB-)
Subclass A-9................................................    $    750.0m   BB+     BB      Ba2 (BB)
Class B.....................................................    $    226.8m   D       CCC     Caa2 (CCC)
Class C.....................................................    $    349.8m   D       CCC     Caa3 (CCC-)
Class D.....................................................    $    395.1m   D       CC      Ca (CC)
</Table>

     Given the continuing difficulties in the aircraft industry and their impact
on the factors which determine our revenues, there can be no assurance that the
rating agencies will not further downgrade any class of our certificates.

     The ratings of the certificates address the likelihood of the timely
payment of interest and the ultimate payment of principal and premium, if any,
on the certificates. A rating is not a recommendation to buy, sell or hold
certificates because ratings do not comment as to market price or suitability
for a particular investor. A rating may be subject to revision, suspension or
withdrawal at any time by the assigning rating agency.

REMARKETING

     At March 31, 2004, we had 52 aircraft scheduled to be remarketed before
December 31, 2004. These comprise seven B737-300s/400s/500s, four B737-200As,
six DHC8s, five MD83s, one MD-87, twelve DC8s, one A300, five A320s, five DC9s,
three ATR42s and three MD11 aircraft. Furthermore, in light of existing
negotiations with certain lessees, we expect we will also experience early
redeliveries of aircraft. As a result of the current oversupply of aircraft in
the market place, we anticipate that we will experience difficulties in placing
many of these aircraft. To the extent that we suffer significant delays in
placing these aircraft, we will incur substantial downtime and new lease rates
are likely to be lower, and in some cases materially lower, than lease rates
which have been in force for leases entered into more than three years ago.

MODIFIED HEDGING POLICY

     As further discussed under "Item 7A. Quantitative and Qualitative
Disclosures about Market Risks - Interest Rate Risk and Management" we have
reviewed and modified our hedging policy with the approval of the rating
agencies and no longer enter into hedges of the class B notes and certificates
as we ceased payments of interest on these notes and certificates on November
17, 2003. We believe it prudent to continue to hedge our interest rate exposure
in respect of the class A notes and certificates as the mix of fixed and
floating rental receipts does not correlate to the floating payments due on the
class A notes and certificates. Our cashflows have been insufficient to enable
any funds to be allocated to the "Second Collection Account Top-up" in the
priority of payments since December 15, 2003. We have therefore not included
this cash balance in our hedging calculations since the end of 2003.

                                        48
<PAGE>

MODIFIED CONCENTRATION LIMITS

     Our exposure to particular countries and customers is managed partly
through concentration limits set forth under the terms of the notes and through
obtaining security from lessees by way of deposits, letters of credit and
guarantees. On the recommendation of the servicer and with the approval of the
rating agencies, we have modified the concentration limits for Africa from 5% to
15% of the most recent appraised value of the current portfolio and combined the
category of Other Countries (including CIS and Eastern Europe) with that of
Europe. The combined European category now has a concentration limit of 55% of
the most recent appraised value of the current portfolio.

CONSENT SOLICITATION FOR INDENTURE AMENDMENT

     During September 2003, we successfully completed a solicitation of consents
from certificate holders, as announced in our Consent Solicitation Statement
dated September 5, 2003 and as explained below. Under the terms of the
indentures, the amendments required the consent of a majority in outstanding
principal amount of the noteholders, including the Class E noteholders, voting
as a single class. Effectively, this required the consent of a majority in
outstanding principal amount of the certificateholders and the Class E
noteholders, voting as a single class. Valid and binding consents to the
amendments to the indentures were received from holders representing 78% of the
aggregate principal amount of the outstanding certificates and the class E notes
as of the record date. The supplemental indentures were executed and became
effective on September 23, 2003.

     The indenture amendments:

     -  permit us to sell aircraft, engines or parts pursuant to any Aircraft
        Agreement (as defined in the indentures) without a minimum sales price
        and without limitation on the value of aircraft that can be sold
        annually or in the aggregate so long as the board of directors of
        Airplanes Limited or the controlling trustees of Airplanes Trust, as
        applicable, have unanimously confirmed that such a sale is in the best
        interests of Airplanes Group and the noteholders and certain other
        conditions are met; and

     -  permit us to enter into swaps with a counterparty having at the time of
        entry into the swap (i) a short-term unsecured debt rating of A-1 or
        higher by Standard & Poor's and (ii) a long-term unsecured debt rating
        of A2 or higher by Moody's, or otherwise approved by the board of
        directors of Airplanes Limited and the controlling trustees of Airplanes
        Trust subject to prior written confirmation from rating agencies that
        entry into such swap would not result in the downgrade or withdrawal of
        such rating agency's current credit rating of any class or subclass of
        certificates.

     We believe that the first amendment should help us to generate some
additional cashflows. In many cases, it may be in our best economic interest to
sell an aircraft. However we were generally constrained by restrictions in the
indentures which required us to sell aircraft at not less than the note target
price. It was becoming increasingly difficult to obtain the note target price
for sales of aircraft, given the depressed market and because our reduced
cashflows mean that we are falling even further behind in our principal payments
on certain classes of notes, resulting in even higher note target prices. Sales
at prices below note target prices were only permitted subject to various
conditions, including that no more than $50 million worth of aircraft could be
sold in any one year, and no more than $500 million worth of aircraft could be
sold in the aggregate, in each case on the basis of the initial appraised
values. The initial appraised values are all significantly higher than current
appraised values which have continued to decline. The annual limitation
therefore in practice permitted only a small number of aircraft sales below note
target price each year. This meant that we were faced with costs, including
storage, insurance and maintenance, in respect of aircraft that we could neither
lease nor sell in accordance with the indentures and we were unlikely to be able
to recoup those costs in the future. The limitations in the indentures presented
a significant impediment to the ability of the servicer to maximize cashflows
for us.

     The amendment allowing certain additional sales of aircraft does not
represent a change in our primary business activity of leasing and re-leasing
aircraft. Rather, the amendment is intended to permit sales, particularly for
older aircraft, where the servicer has concluded that the most or only economic
option for a particular aircraft is a sale, which sale would likely have been
precluded under the indentures as previously in force, because of the
limitations on aircraft sales described above.

                                        49
<PAGE>

     As discussed in "Item 1. Business -- Commercial Opportunities for Certain
Types Of Our Aircraft", we have identified a number of aircraft which are
potential candidates for sale, having little to no re-lease prospects and which
require expenditure for storage, maintenance and insurance.

     The second amendment allows us to retain flexibility that may reduce the
cost of pursuing our hedging policy. We pursue a hedging policy, which is
approved by the board of directors of Airplanes Limited and the controlling
trustees of Airplanes Trust and the rating agencies, to manage our interest rate
risk, as described more fully in "Item 7A. Quantitative and Qualitative
Disclosures about Market Risks" below. The indentures required that any swap
counterparty (or guarantor thereof) at the time of entry into a swap transaction
have minimum ratings. These minimum ratings were at least an A-1+ short-term
unsecured debt rating by Standard & Poor's and an A1 long-term unsecured debt
rating by Moody's. Since these minimum ratings were set, the unsecured debt of
many financial institutions, including some which are existing swap
counterparties, has been downgraded to below these levels. Each class and
sub-class of our certificates has also been downgraded by the rating agencies,
in some cases significantly, see "Ratings" above. It was proving increasingly
difficult to find counterparties with the requisite ratings willing to enter
into swaps with us, and the original rationale for the required ratings level,
to ensure that the swaps did not impose any credit risk on the most senior notes
initially rated AA, no longer applied. We believe that the amendment to the
indentures should help us to identify eligible counterparties to enter into
interest rate swaps to hedge our interest rate exposure in respect of the class
A notes and certificates. However, because of our financial condition, we may
nevertheless be unable to find counterparties willing to enter into swaps with
us, and/or it may become more expensive for us to enter into swaps with eligible
counterparties.

CRITICAL ACCOUNTING POLICIES

     Airplanes Group determines the critical principles by considering
accounting policies that involve the most subjective decisions or assessments.
The most critical accounting policies are those related to depreciation methods
and impairment of aircraft values since both of these involve elements which
require Airplanes Group to make assumptions as to matters that are highly
uncertain at the time the estimates are made.

DEPRECIATION:

     Aircraft are recorded at cost and depreciated on a straight line basis over
the estimated life to their estimated residual value. The determinations of
useful life and residual value are critical to the calculation of depreciation.
The estimates of residual values are generally 15% of cost and the useful lives
are as follows:

<Table>
<Caption>
                                                              YEARS          FROM
                                                              -----    ----------------
<S>                                                           <C>      <C>
Stage 2 aircraft............................................  20-25    Manufacture date
Refurbished and upgraded aircraft -- converted to
  freighters................................................  20       Conversion date
Turboprop aircraft..........................................  22.5     Manufacture date
All other aircraft..........................................  25       Manufacture date
</Table>

     The estimates of useful lives and residual values are reviewed at least
annually.

IMPAIRMENT:

     Aircraft are periodically reviewed for impairment in accordance with SFAS
144. An impairment loss is evaluated when the undiscounted estimated future
cashflows of the aircraft are less than its carrying value and the loss is
measured as the excess of the carrying value over the fair value.

     The fair value of the aircraft is generally based on independent appraisals
of aircraft. The appraised values are determined based on the assumption that
there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". On the basis of past experience including actual
lease rates and sales prices achievable and the servicer's experience of the
market, estimated discounted cashflows are used as a more accurate indication of
fair value. The estimated discounted future cashflows assume, among other
things, market lease rates at the end of the existing lease term, other lease
costs, downtime and the risk inherent in the cashflows.

                                        50
<PAGE>

RESULTS OF OPERATIONS -- YEAR ENDED MARCH 31, 2004 COMPARED WITH YEAR ENDED
MARCH 31, 2003.

     Details of Airplanes Group's results are set out below:

<Table>
<Caption>
                                                              2003     2004        %
                                                              -----   -------   -------
                                                               ($ MILLIONS)     CHANGE
<S>                                                           <C>     <C>       <C>
REVENUES
Aircraft leasing............................................    358       267    (25.42%)
Aircraft sales..............................................     14         3    (78.57%)
Other income
EXPENSES
Cost of aircraft sold.......................................    (15)       (1)    98.33%
Depreciation................................................   (140)     (116)    17.14%
Impairment Charge...........................................    (76)     (373)  (390.79%)
Net interest expense........................................   (725)     (854)   (17.79%)
Bad and doubtful debts......................................     (6)        5    183.33%
Other lease costs...........................................    (77)      (82)    (6.49%)
Selling general and administrative expenses.................    (33)      (37)   (12.12%)
Tax benefit.................................................      8        17    112.50%
                                                              -----   -------
Net loss....................................................  $(692)  $(1,171)   (69.22%)
                                                              =====   =======
</Table>

     Airplanes Group's results for the year ended March 31, 2004 reflected a
continuation of the difficult trading conditions for the aviation industry.
Continued difficult trading conditions gave rise to the requirement for
impairment provisions in the year ended March 31, 2004 and in the year ended
March 31, 2003 and to lessees seeking a variety of rental restructurings
including rental reductions and deferrals. These factors will continue to have a
significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

     Airplanes Group generated $47 million in cash from operations in the year
ended March 31, 2004 compared to $91 million in the year ended March 31, 2003.
The decrease in cash generated from operations is primarily attributable to a
reduction in lease revenues caused by an increased level of lease restructurings
and, to a lesser extent, greater aircraft downtime and reduced rentals as a
result of aircraft sales in previous periods. There were seven aircraft sales in
the year ended March 31, 2004, compared to the year ended March 31, 2003 when
there were seven sales. There was a net loss after taxation for the year ended
March 31, 2004 of $1,171 million (Airplanes Limited: $1,066 million; Airplanes
Trust: $105 million) compared to a net loss after taxation for the year ended
March 31, 2003 of $692 million (Airplanes Limited: $636 million; Airplanes
Trust: $56 million). Excluding accrued but unpaid class E note interest, the
increase in the net loss for the period of $304 million was primarily
attributable to an aircraft impairment provision of $373 million (Airplanes
Limited: $335 million; Airplanes Trust: $38 million) in the year ended March 31,
2004, as compared to a provision of $76 million (Airplanes Limited: $74 million;
Airplanes Trust: $2 million) in the year ended March 31, 2003 and a reduction in
revenue due primarily to rental restructurings in the year ended March 31, 2004.

LEASING REVENUES

     Leasing revenues (which include maintenance reserve receipts from certain
of our lessees) for the year ended March 31, 2004 were $267 million (Airplanes
Limited: $250 million; Airplanes Trust: $17 million) compared with $358 million
(Airplanes Limited: $337 million; Airplanes Trust: $21 million) for the year
ended March 31, 2003. The decrease was primarily attributable to a number of
lease restructurings including rental reductions, the number of aircraft
off-lease and to the reduction in the number of aircraft on lease as a
consequence of aircraft sales in previous periods. At March 31, 2004, we had 153
of our 172 aircraft on lease (Airplanes Limited: 143 aircraft; Airplanes Trust:
10 aircraft) compared to 158 of our 179 aircraft on lease (Airplanes Limited:
147 aircraft; Airplanes Trust: 11 aircraft) at March 31, 2003.

                                        51
<PAGE>

IMPAIRMENT PROVISIONS

     Aircraft carrying values are periodically assessed for impairment in
accordance with SFAS 144. The statement requires an assessment for impairment
when an asset's carrying value is greater than its fair value as measured by net
undiscounted estimated future cashflows. Impairments are measured by the excess
of carrying value over fair value. Following consideration of the estimated
future cashflows to be generated by our aircraft, a SFAS 144 assessment resulted
in the requirement for an impairment provision of $373 million (Airplanes
Limited: $335 million; Airplanes Trust: $38 million) in the year ended March 31,
2004 as compared with $76 million (Airplanes Limited: $74 million; Airplanes
Trust: $2 million) for the year ended March 31, 2003.

DEPRECIATION

     The charge for depreciation in the year ended March 31, 2004 amounted to
$116 million (Airplanes Limited: $111 million; Airplanes Trust: $5 million) as
compared with $140 million (Airplanes Limited: $132 million; Airplanes Trust: $8
million) for the year ended March 31, 2003. The reduction in the charge resulted
primarily from the reduced depreciable value of the fleet following the
impairment provisions made in the year ended March 31, 2003 and, to a lesser
extent, aircraft sales in previous periods.

AIRCRAFT SALES

     Aircraft sales revenues of $3 million (Airplanes Limited: $3 million,
Airplanes Trust: $Nil) in respect of the sale of two B737-200A aircraft, one
DC9-51 aircraft, one A300 aircraft and three Metro III aircraft were received in
the year ended March 31, 2004. The net book value of the aircraft sold was $1
million (Airplanes Limited: $1 million; Airplanes Trust: $Nil). Sales revenues
of $14 million (Airplanes Limited: $14 million; Airplanes Trust; $Nil) in
respect of the sale of three B737-200A aircraft, two DC9-51 aircraft, one
DC8-71F aircraft and insurance proceeds in relation to one DC9-32 aircraft which
was deemed a constructive total loss were received in the year ended March 31,
2003. The net book value of the aircraft sold was $15 million (Airplanes
Limited: $15 million; Airplanes Trust: $Nil).

NET INTEREST EXPENSE

     Net interest expense was $854 million (Airplanes Limited: $778 million;
Airplanes Trust: $76 million), of which $154 million related to interest on the
class A to D notes and interest rate swaps and $700 million related to interest
on the class E notes, in the year ended March 31, 2004 compared to $725 million
(Airplanes Limited: $660 million; Airplanes Trust: $65 million), of which $181
million related to interest on the class A to D notes and interest rate swaps
and $544 million related to interest on the class E notes, in the year ended
March 31, 2003. The increase in the amount of interest charged was primarily due
to interest on accrued but unpaid class E note interest of $156 million,
partially offset by lower average debt and interest rates in the year ended
March 31, 2004.

     The weighted average interest rate on the class A to D notes (taking into
account the interest rate swaps entered into by Airplanes Group and the class E
minimum interest amount, but excluding the class E supplemental interest amount
and the remainder of the class E adjusted interest) during the year ended March
31, 2004 was 5.95% and the average debt in respect of the class A to D notes
outstanding during the period was $2,587 million. The class E notes together
with the accrued but unpaid class E note interest, accrue interest at a rate of
20% per annum, as adjusted (by reference to the U.S. consumer price index,
effective March 28, 1996) to the current level of 26.6%.

     The weighted average interest rate on the class A to D notes (on the same
basis as above) during the year to March 31, 2003 was 6.77% and the average debt
in respect of the class A to D notes outstanding during the period was $2,674
million.

     The difference for the year ended March 31, 2004 between Airplanes Group's
net interest expense of $854 million (Airplanes Limited: $778 million; Airplanes
Trust: $76 million) and cash paid in respect of interest of $127 million
(Airplanes Limited: $116 million; Airplanes Trust: $11 million) is substantially
accounted for by the fact that interest on the class E notes is accrued but
unpaid.

                                        52
<PAGE>

     Net interest expense is stated after deducting interest income earned
during the relevant period. In the year ended March 31, 2004, Airplanes Group
earned interest income (including lessee default interest) of $2 million
(Airplanes Limited: $2 million; Airplanes Trust: $Nil) compared with $3 million
in the year ended March 31, 2003 (Airplanes Limited: $3 million; Airplanes
Trust: $Nil).

BAD DEBT PROVISIONS

     Airplanes Group's practice is to provide specifically for any amounts due
but unpaid by lessees based primarily on the amount due in excess of security
held and also taking into account the financial strength and condition of a
lessee and the economic conditions existing in the lessee's operating
environment. While a number of Airplanes Group's lessees failed to meet their
contractual obligations in the year ended March 31, 2004, resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these lessees, the credit exposure with regard to certain other
carriers improved in the period. Overall, there was a net release of provisions
in respect of bad and doubtful debts in the year ended March 31, 2004 of $5
million (Airplanes Limited: $2 million; Airplanes Trust: $3 million) compared
with an overall net charge of $6 million for the year ended March 31, 2003
(Airplanes Limited: $5 million; Airplanes Trust: $1 million).

OTHER LEASE COSTS

     Other lease costs, comprising mainly a transfer to the provision for
maintenance and aircraft related technical expenditure associated with
remarketing the aircraft, in the year ended March 31, 2004 amounted to $82
million (Airplanes Limited: $74 million; Airplanes Trust: $8 million) compared
with other lease costs of $77 million (Airplanes Limited: $73 million; Airplanes
Trust: $4 million) in the year ended March 31, 2003.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses for the year ended March 31,
2004 amounted to $37 million (Airplanes Limited: $35 million; Airplanes Trust:
$2 million) as compared to the year ended March 31, 2003 of $33 million
(Airplanes Limited: $31 million; Airplanes Trust: $2 million).

     The most significant element of selling, general and administrative
expenses is the aircraft servicing fees paid to GECAS as servicer. Substantially
all of these amounts represent asset based fees calculated as an annual
percentage of agreed values of aircraft under management pursuant to a servicing
agreement. Selling, general and administrative expenses in the year ended March
31, 2004 include $24 million (Airplanes Limited: $23 million; Airplanes Trust:
$1 million) relating to servicing fees, consistent with $24 million (Airplanes
Limited: $23 million; Airplanes Trust: $1 million) in the year ended March 31,
2003.

     A further significant element of Airplanes Group's actual selling, general
and administrative expenses reported in the year ended March 31, 2004 was $6
million (Airplanes Limited: $5 million; Airplanes Trust: $1 million) in respect
of administrative agency and cash management fees payable to subsidiaries of
debis AirFinance Ireland, consistent with the charge of $6 million (Airplanes
Limited: $5 million; Airplanes Trust: $1 million) for the year ended March 31,
2003.

OPERATING LOSS

     The operating loss for the year ended March 31, 2004 was $1,188 million
(Airplanes Limited: $1,079 million; Airplanes Trust: $109 million) compared with
an operating loss of $700 million for the year ended March 31, 2003 (Airplanes
Limited: $639 million; Airplanes Trust: $61 million). Airplanes Limited and
Airplanes Trust are expected to continue to report substantial losses in the
future.

TAXES

     There was a tax benefit of $17 million (Airplanes Limited: $13 million,
Airplanes Trust $4 million) in the year ended March 31, 2004, as compared with a
tax benefit of $8 million (Airplanes Limited: $3 million, Airplanes Trust: $5
million) for the year ended March 31, 2003. The increase in the year ended March
31, 2004

                                        53
<PAGE>

relates primarily to a release of deferred tax provisions in the Irish
subsidiary companies which were deemed unnecessary due to the level of losses
forward and additional forecasted losses.

NET LOSS

     The net loss after taxation for the year ended March 31, 2004 was $1,171
million (Airplanes Limited: $1,066 million; Airplanes Trust: $105 million)
compared with a net loss after taxation for the year ended March 31, 2003 of
$692 million (Airplanes Limited: $636 million; Airplanes Trust: $56 million).

RESULTS OF OPERATIONS -- YEAR ENDED MARCH 31, 2003 COMPARED WITH YEAR ENDED
MARCH 31, 2002.

     Airplanes Group's results for the year ended March 31, 2003 reflected a
continuation of the apparent difficult trading conditions for the aviation
industry. Continued difficult trading conditions gave rise to the requirement
for impairment provisions in the year ended March 31, 2003 and in the year ended
March 31, 2002 and to lessees seeking a variety of rental restructurings
including rental reductions and deferrals. These factors will continue to have a
significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

     Airplanes Group generated $91 million in cash from operations in the year
ended March 31, 2003 compared to $120 million in the year ended March 31, 2002.
The decrease in cash generated from operations is primarily attributable to a
reduction in lease revenues caused by an increased level of lease restructurings
and, to a lesser extent, greater aircraft downtime and reduced rentals as a
result of aircraft sales in previous periods. There were seven aircraft sales in
the year ended March 31, 2003, compared to the year ended March 31, 2002 when
there were four sales. There was a net loss after taxation for the year ended
March 31, 2003 of $692 million (Airplanes Limited: $636 million; Airplanes
Trust: $56 million) compared to a net loss after taxation for the year ended
March 31, 2002 of $695 million (Airplanes Limited: $623 million; Airplanes
Trust: $72 million). Excluding accrued but unpaid class E note interest, the
decrease in the net loss for the period of $119 million was primarily
attributable to an aircraft impairment provision of $292 million (Airplanes
Limited: $245 million; Airplanes Trust: $47 million) in the year ended March 31,
2002, as compared to a provision of $76 million (Airplanes Limited: $74 million;
Airplanes Trust: $2 million) in the year ended March 31, 2003 and a reduction in
revenue due primarily to rental restructurings in the year ended March 31, 2003.

LEASING REVENUES

     Leasing revenues (which include maintenance reserve receipts from certain
of our lessees) for the year ended March 31, 2003 were $358 million (Airplanes
Limited: $337 million; Airplanes Trust: $21 million) compared with $410 million
(Airplanes Limited: $382 million; Airplanes Trust: $28 million) for the year
ended March 31, 2002. The decrease was primarily attributable to a number of
lease restructurings including rental reductions, the number of aircraft
off-lease and to the reduction in the number of aircraft on lease as a
consequence of aircraft sales in previous periods. At March 31, 2003, we had 158
of our 179 aircraft on lease (Airplanes Limited: 147 aircraft; Airplanes Trust:
11 aircraft) compared to 180 of our 186 aircraft on lease (Airplanes Limited:
168 aircraft; Airplanes Trust: 12 aircraft) at March 31, 2002.

IMPAIRMENT PROVISIONS

     Aircraft carrying values are periodically assessed for impairment in
accordance with SFAS 144. The statement requires an assessment for impairment
when an asset's carrying value is greater than its fair value as measured by net
undiscounted estimated future cashflows. Impairments are measured by the excess
of carrying value over fair value. Following consideration of the estimated
future cashflows to be generated by our aircraft, a SFAS 144 assessment resulted
in the requirement for an impairment provision of $76 million (Airplanes
Limited: $74 million; Airplanes Trust: $2 million) in the year ended March 31,
2003 as compared with $292 million (Airplanes Limited: $245 million; Airplanes
Trust: $47 million) for the year ended March 31, 2002.

                                        54
<PAGE>

DEPRECIATION AND AMORTIZATION

     The charge for depreciation and amortization in the year ended March 31,
2003 amounted to $140 million (Airplanes Limited: $132 million; Airplanes Trust:
$8 million) as compared with $159 million (Airplanes Limited: $146 million;
Airplanes Trust: $13 million) for the year ended March 31, 2002. The reduction
in the charge resulted primarily from the reduced depreciable value of the fleet
following the impairment provisions made in the year ended March 31, 2002 and,
to a lesser extent, aircraft sales in previous periods.

AIRCRAFT SALES

     Aircraft sales revenues of $14 million (Airplanes Limited: $14 million,
Airplanes Trust: $Nil) in respect of the sale of three B737-200A aircraft, two
DC9-51 aircraft, one DC8-71F aircraft and insurance proceeds in relation to one
DC9-32 aircraft which was deemed a constructive total loss were received in the
year ended March 31, 2003. The net book value of the aircraft sold was $15
million (Airplanes Limited: $15 million; Airplanes Trust: $Nil). Sales revenues
of $5 million (Airplanes Limited: $5 million; Airplanes Trust; $Nil) in respect
of the sale of three B737-200A aircraft and one DC9-51 aircraft were received in
the year ended March 31, 2002. The net book value of the aircraft sold was $2
million (Airplanes Limited: $2 million; Airplanes Trust: $Nil).

NET INTEREST EXPENSE

     Net interest expense was $725 million (Airplanes Limited: $660 million;
Airplanes Trust: $65 million), of which $181 million related to interest on the
class A to D notes and interest rate swaps and $544 million related to interest
on the class E notes, in the year ended March 31, 2003 compared to $614 million
(Airplanes Limited: $559 million; Airplanes Trust: $55 million), of which $186
million related to interest on the class A to D notes and $428 million related
to interest on the class E notes, in the year ended March 31, 2002. The increase
in the amount of interest charged was primarily due to interest on accrued but
unpaid class E note interest of $116 million and a net credit of $9 million in
the year ended March 31, 2002 relating to the sale of our swaption portfolio
partially offset by lower average debt and interest rates in the year ended
March 31, 2003.

     The weighted average interest rate on the class A to D notes (taking into
account the interest rate swaps entered into by Airplanes Group and the class E
minimum interest amount, but excluding the class E supplemental interest amount
and the remainder of the class E adjusted interest) during the year ended March
31, 2003 was 6.77% and the average debt in respect of the class A to D notes
outstanding during the period was $2,674 million. The class E notes together
with the accrued but unpaid class E note interest, accrue interest at a rate of
20% per annum, as adjusted (by reference to the U.S. consumer price index,
effective March 28, 1996) to the current level of 23.4%.

     The weighted average interest rate on the class A to D notes (on the same
basis as above) during the year to March 31, 2002 was 7.18% and the average debt
in respect of the class A to D notes outstanding during the period was $2,797
million.

     The difference for the year ended March 31, 2003 between Airplanes Group's
net interest expense of $725 million (Airplanes Limited: $660 million; Airplanes
Trust: $65 million) and cash paid in respect of interest of $179 million
(Airplanes Limited: $162 million; Airplanes Trust: $17 million) is substantially
accounted for by the fact that interest on the class E notes is accrued but
unpaid.

     Net interest expense is stated after deducting interest income earned
during the relevant period. In the year ended March 31, 2003, Airplanes Group
earned interest income (including lessee default interest) of $3 million
(Airplanes Limited: $3 million; Airplanes Trust: $Nil million) compared with $6
million in the year ended March 31, 2002 (Airplanes Limited: $6 million;
Airplanes Trust: $Nil).

BAD DEBT PROVISIONS

     Airplanes Group's practice is to provide specifically for any amounts due
but unpaid by lessees based primarily on the amount due in excess of security
held and also taking into account the financial strength and condition of a
lessee and the economic conditions existing in the lessee's operating
environment. While a number
                                        55
<PAGE>

of Airplanes Group's lessees failed to meet their contractual obligations in the
year ended March 31, 2003, resulting in the requirement for additional
provisions in respect of bad and doubtful debts in respect of these lessees, the
credit exposure with regard to certain other carriers improved in the period.
Overall, there was a net charge in respect of bad and doubtful debts in the year
ended March 31, 2003 of $6 million (Airplanes Limited: $5 million; Airplanes
Trust: $1 million) compared with an overall net charge of $3 million for the
year ended March 31, 2002 (Airplanes Limited: $2 million; Airplanes Trust: $1
million).

OTHER LEASE COSTS

     Other lease costs, comprising mainly a transfer to the provision for
maintenance and aircraft related technical expenditure associated with
remarketing the aircraft, in the year ended March 31, 2003 amounted to $77
million (Airplanes Limited: $73 million; Airplanes Trust: $4 million) compared
with other lease costs of $73 million (Airplanes Limited: $70 million; Airplanes
Trust: $3 million) in the year ended March 31, 2002.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses for the year ended March 31,
2003 amounted to $33 million (Airplanes Limited: $31 million; Airplanes Trust:
$2 million) as compared to the year ended March 31, 2002 of $36 million
(Airplanes Limited: $33 million; Airplanes Trust: $3 million).

     The most significant element of selling, general and administrative
expenses is the aircraft servicing fees paid to GECAS as servicer. Substantially
all of these amounts represent asset based fees calculated as an annual
percentage of agreed values of aircraft under management pursuant to a servicing
agreement. Selling, general and administrative expenses in the year ended March
31, 2003 include $24 million (Airplanes Limited: $23 million; Airplanes Trust:
$1 million) relating to servicing fees consistent with $24 million (Airplanes
Limited: $22 million; Airplanes Trust: $2 million) in the year ended March 31,
2002.

     A further significant element of Airplanes Group's actual selling, general
and administrative expenses reported in the year ended March 31, 2003 was $6
million (Airplanes Limited: $5 million; Airplanes Trust: $1 million) in respect
of administrative agency and cash management fees payable to subsidiaries of
debis AirFinance Ireland, compared with the charge of $10 million (Airplanes
Limited: $9 million; Airplanes Trust: $1 million) for the year ended March 31,
2002.

OPERATING LOSS

     The operating loss for the year ended March 31, 2003 was $700 million
(Airplanes Limited: $639 million; Airplanes Trust: $61 million) compared with an
operating loss of $764 million for the year ended March 31, 2002 (Airplanes
Limited: $670 million; Airplanes Trust: $94 million). Airplanes Limited and
Airplanes Trust are expected to continue to report substantial losses in the
future.

TAXES

     There was a tax benefit of $8 million (Airplanes Limited: $3 million,
Airplanes Trust $5 million) in the year ended March 31, 2003, as compared with a
tax benefit of $64 million (Airplanes Limited: $42 million, Airplanes Trust: $22
million) for the year ended March 31, 2002.

NET LOSS

     The net loss after taxation for the year ended March 31, 2003 was $692
million (Airplanes Limited: $636 million; Airplanes Trust: $56 million) compared
with a net loss after taxation for the year ended March 31, 2002 of $695 million
(Airplanes Limited: $623 million; Airplanes Trust: $72 million), including an
adjustment of $5 million (Airplanes Limited: $5 million; Airplanes Trust: $Nil)
for the cumulative effect in relation to the adoption of SFAS 133.

                                        56
<PAGE>

FINANCIAL RESOURCES AND LIQUIDITY

     Our primary source of liquidity is rental payments made by lessees under
the leases. Our principal uses of cash rental payments are expenses related to
the aircraft and their servicing, corporate expenses and the payment of
interest, principal and any premium on indebtedness. See "-- Indebtedness" for
more information regarding our outstanding debt.

     Airplanes Group's cash balances at March 31, 2004 amounted to $83 million
(Airplanes Limited: $77 million; Airplanes Trust: $6 million) compared to cash
balances at March 31, 2003 of $141 million (Airplanes Limited: $135 million;
Airplanes Trust: $6 million). The principal reason for the reduction in the cash
balances is due to the depletion of the Second Collection Account Top-up
following the recommencement of payment of class A minimum principal in August
2003.

     Under the terms of Airplanes Group's indebtedness, we are required, to the
extent we have sufficient cashflows to maintain cash balances, which we refer to
as the "LIQUIDITY RESERVE AMOUNT," equal to (1) the amount of security deposits
($29 million at March 31, 2004) and (2) a maintenance reserve. See "-- The
Accounts -- Liquidity Reserve Amount" for circumstances under which these
amounts may be increased or decreased. When we have cash to fund these reserves,
the terms of Airplanes Group's indebtedness restrict the use of this cash so
that it is generally not available to service debt. The liquidity reserve amount
was determined largely based on an analysis of historical experience,
assumptions regarding Airplanes Group's future performance and the frequency and
cost of certain contingencies in respect of the aircraft. It was intended to
provide liquidity for meeting the cost of maintenance obligations and
non-maintenance, aircraft-related contingencies such as removing liens,
complying with ADs and repossessing and re-leasing aircraft.

     Since December 15, 2003, however, we have been unable to fund the $20
million maintenance reserve fund and the security deposit reserve fund and we
have only been able to retain cash at the "First Collection Account Top-Up"
level in the priority of payments.

OPERATING ACTIVITIES

     Operating cashflows depend on many factors including the performance of
lessees and Airplanes Group's ability to re-lease aircraft, the average cost of
the notes, the efficacy of Airplanes Group's interest rate hedging policies, the
ability of Airplanes Group's swap providers to perform under the terms of their
swap and similar obligations and maintenance cashflows which, although expected
to be neutral over time, may not balance in any given year.

     Net cash provided by operating activities in the year ended March 31, 2004
amounted to $47 million (Airplanes Limited: $37 million; Airplanes Trust: $10
million) compared with $91 million in the year ended March 31, 2003 (Airplanes
Limited: $81 million; Airplanes Trust: $10 million). This includes cash paid in
respect of interest of $127 million in the year ended March 31, 2004 (Airplanes
Limited: $116 million; Airplanes Trust: $11 million) compared with the $179
million in the year ended March 31, 2003 (Airplanes Limited: $162 million;
Airplanes Trust: $17 million). The decrease in net cash provided by operating
activities in the year ended March 31, 2004 is primarily attributable to an
increased level of lease restructurings, greater aircraft downtime, lower
interest rates on floating rate leases and a reduction in the number of aircraft
on lease as a result of previous aircraft sales. This was offset to some extent
by net maintenance inflows and lower LIBOR rates on the floating rate notes.

     There was a reduction in the amount of cash paid as interest during the
year ended March 31, 2004 of $52 million, as a result of the non payment of
interest on the class B, C and D notes since the November 2003 payment date and
lower average debt and a lower average interest rate.

INVESTING AND FINANCING ACTIVITIES

     Cashflows from investing activities in the year ended March 31, 2004
reflect the cash provided by capital and sales type leases which was $2 million
(Airplanes Limited: $2 million; Airplanes Trust: $Nil) compared to $4 million
(Airplanes Limited: $4 million; Airplanes Trust: $Nil) in the year ended March
31, 2003. In the year ended March 31, 2004, Airplanes Group also received net
sales proceeds of $3 million (Airplanes Limited:

                                        57
<PAGE>

$3 million; Airplanes Trust: $Nil) compared to $14 million (Airplanes Limited:
$14 million; Airplanes Trust: $Nil) in the year ended March 31, 2003.

     Cashflows from financing activities in the year ended March 31, 2004
reflect the repayment of $108 million of principal on the subclass A-6 notes and
class B notes by Airplanes Group (Airplanes Limited: $98 million; Airplanes
Trust: $10 million) compared with $108 million of principal repaid on the
subclass A-6 and class B by Airplanes Group (Airplanes Limited: $98 million;
Airplanes Trust: $10 million) in the year ended March 31, 2003. Notwithstanding
the fact that the principal repayments in the year ended March 31, 2004 were
comparable with those in the year ended March 31, 2003, in the year ended March
31, 2004 there was a decrease in cash provided by operating activities as
discussed above, which was offset by the depletion of the Second Collection
Account Top-up.

INDEBTEDNESS

     Airplanes Group's outstanding indebtedness consisted of class A, B, C, D
and E notes in the amount of $3,103 million (Airplanes Limited: $2,828 million;
Airplanes Trust: $275 million) at March 31, 2004 and $3,209 million (Airplanes
Limited: $2,924 million; Airplanes Trust: $285 million) at March 31, 2003.
Airplanes Group had $591 million of class E notes outstanding at March 31, 2004
and 2003. The terms of each subclass of notes, including the outstanding
principal amount as of March 15, 2004, and estimated fair market value as of
March 31, 2004, are as follows:

<Table>
<Caption>
                               OUTSTANDING                                                 ESTIMATED
                                PRINCIPAL            ANNUAL                               FAIR MARKET
CLASS OR SUBCLASS OF           AMOUNT AS OF       INTEREST RATE          FINAL            VALUE AS OF
CERTIFICATES AND NOTES        MARCH 15, 2004    (PAYABLE MONTHLY)    MATURITY DATE     MARCH 31, 2004(4)
----------------------        --------------    -----------------    --------------    -----------------
                               ($ MILLIONS)                                              ($ MILLIONS)
<S>                           <C>               <C>                  <C>               <C>
Subclass A-6................       97.4         LIBOR+0.340%         March 15, 2019           96.5
Subclass A-8(1).............      700.0         LIBOR+0.375%         March 15, 2019          588.0
Subclass A-9(2).............      750.0         LIBOR+0.550%         March 15, 2019          390.0
Class B.....................      226.8         LIBOR+0.750%         March 15, 2019           38.6
Class C.....................      349.8         8.150%               March 15, 2019           22.7
Class D.....................      395.1         10.875%              March 15, 2019           11.8
Class E (notes only)(3).....      591.2         20.000%              March 15, 2019             --
</Table>

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

(1)  Airplanes Group was due to refinance the subclass A-8 certificates and
     notes on March 15, 2003. Given market conditions and the impact these
     conditions have had on our performance as compared to the 2001 Base Case, a
     refinancing at that time was not economically viable. Step-up interest has
     therefore accrued on the subclass A-8 certificates and notes since March
     15, 2003. However, due to insufficient cashflows and the low priority of
     step-up interest in the priority of payments, no step-up interest has been
     paid.

     Prior to March 15, 2003, on each payment date the priority of the principal
     amounts outstanding in respect of the various subclasses of class A
     certificates and notes was subclass A-6, subclass A-9 and subclass A-8 in
     that order. Because there was no refinancing of the subclass A-8 notes by
     March 15, 2003, the priority of the principal amounts outstanding in
     respect of the various subclasses of class A certificates and notes is now,
     subclass A-6, subclass A-8 and subclass A-9 in that order.

(2)  The subclass A-9 certificates were issued on March 15, 2001.

(3)  The annual interest rate on the class E notes is adjusted by reference to
     changes in the U.S. Consumer Price Index since March 28, 1996. As of March
     31, 2004, the annual interest rate on the class E notes was 26.59%. Except
     for the class E minimum interest amount and supplemental interest amount,
     payable at 1% and 10% per annum respectively, no principal or interest is
     payable on the class E notes until the more senior classes of notes have
     all been paid in full. As of March 31, 2004, the accrued and unpaid class E
     minimum interest amount and supplemental interest amount was $2,742
     million.

(4)  Although the estimated fair values of the class A to D notes outstanding
     have been determined by reference to prices as at March 31, 2004 provided
     by an independent third party, these fair values do not reflect the

                                        58
<PAGE>

     market value of these notes at a specific time and should not be relied
     upon as a measure of the value that could be realized by a noteholder upon
     sale.

NEW PRONOUNCEMENTS

     In January 2003, the FASB issued Interpretation No. 46 (or FIN 46),
"Consolidation of Variable Interest Entities" which requires a variable interest
entity to be consolidated by the primary beneficiary which is the entity subject
to a majority of the risk of loss from the variable interest entity's activities
or entitled to receive a majority of the entity's residual returns or both. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements of FIN
46 apply to older entities in the first fiscal year or interim period beginning
after December 15, 2003. Certain of the disclosure requirements apply to all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The adoption of FIN 46 did not have a
significant impact on Airplanes Group's financial statements.

     On April 30, 2003, the FASB issued SFAS Statement No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities, which amends
FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, to address (1) decisions reached by the Derivatives Implementation
Group, (2) developments in other FASB projects that address financial
instruments, and (3) implementation issues related to the definition of a
derivative. Statement 149 has multiple effective date provisions depending on
the nature of the amendment to Statement 133, and Airplanes Group is currently
considering its potential effect on future financial statements.

     In May 2003, the FASB issued Statement of Financial Reporting Standards No.
150, Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity. SFAS 150 clarifies the accounting for certain financial
instruments with characteristics of both liabilities and equity and requires
that those instruments be classified as liabilities in statements of financial
position. Previously, many of those financial instruments were classified as
equity. SFAS 150 is effective for financial instruments entered into or modified
after May 31, 2003 and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. On November 7, 2003, FASB Staff
Position 150-3 was issued, which indefinitely deferred the effective date of
SFAS 150 for certain mandatory redeemable non-controlling interests. As
Airplanes Group does not have any of these financial instruments, the adoption
of SFAS 150 did not have any impact on Airplanes Group's financial statements.

COMPARISON OF ACTUAL CASHFLOWS VERSUS THE 2001 BASE CASE FOR THE FOUR MONTH
PERIOD FROM JANUARY 10, 2004 TO MAY 17, 2004.

     The discussion and analysis which follows is based on the results of
Airplanes Limited and Airplanes Trust and their subsidiaries as a single entity
(collectively "AIRPLANES GROUP").

     THE FINANCIAL INFORMATION SET FORTH BELOW WAS NOT PREPARED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OF THE UNITED STATES. THIS
INFORMATION MUST BE READ IN CONJUNCTION WITH AIRPLANES GROUP'S MOST RECENT
FINANCIAL INFORMATION PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES OF THE UNITED STATES. FOR THIS YOU SHOULD REFER TO PAGES F-1 TO F-29
OF THIS REPORT ON FORM 10-K.

     For the purposes of this report, the "FOUR MONTH PERIOD" comprises
information from the monthly cash reports as filed at the Securities and
Exchange Commission as Forms 8-K for the relevant months ended February 17,
2004, March 15, 2004, April 15, 2004 and May 17, 2004. The financial data in
these reports includes cash receipts from January 10, 2004 (first day of the
Calculation Period for the February 2004 report) up to May 11, 2004 (last day of
the Calculation Period for the May 2004 report). Page 68 presents the cumulative
cashflow information from March 2001 to the May 2004 payment date. This report,
however, limits its commentary to the Four Month Period.

     THE 2001 BASE CASE CONTAINED ASSUMPTIONS IN RESPECT OF AIRPLANES GROUP'S
FUTURE CASHFLOWS AND EXPENSES. SINCE THESE ASSUMPTIONS WERE DEVELOPED, GLOBAL
ECONOMIC CONDITIONS, AND PARTICULARLY CONDITIONS IN THE COMMERCIAL AVIATION
INDUSTRY, HAVE WORSENED SIGNIFICANTLY, PARTICULARLY SINCE SEPTEMBER 11, 2001, AS

                                        59
<PAGE>

DISCUSSED ABOVE UNDER "-- RECENT DEVELOPMENTS". ACCORDINGLY THE PERFORMANCE OF
AIRPLANES GROUP HAS BEEN AND WE EXPECT IT TO CONTINUE TO BE WORSE THAN THE 2001
BASE CASE, WITH PARTICULAR REFERENCE TO THOSE ASSUMPTIONS RELATING TO AIRCRAFT
RE-LEASE RATES, AIRCRAFT VALUES, AIRCRAFT DOWNTIME AND LESSEE DEFAULTS.

     THE FOLLOWING IS A DISCUSSION OF THE TOTAL CASH COLLECTIONS, TOTAL CASH
EXPENSES, INTEREST PAYMENTS AND PRINCIPAL PAYMENTS IN THE FOUR MONTH PERIOD AND
SHOULD BE READ IN CONJUNCTION WITH THE ANALYSIS ON PAGE 67.

CASH COLLECTIONS

     "TOTAL CASH COLLECTIONS" include Net Lease Rental, Interest Earned,
Aircraft Sales, Net Maintenance and Other Receipts (each as defined below). In
the Four Month Period, Airplanes Group generated approximately $88.8 million in
Total Cash Collections, $53.4 million less than the 2001 Base Case. This
difference is due to a combination of the factors set out below (the numbers in
square brackets below refer to the line item number shown on page 66).

[2]  RENEGOTIATED LEASES

     "RENEGOTIATED LEASES" is a measure of the loss in rental revenue caused by
a lessee negotiating a reduction in the lease rental, in the period to the
original contracted expiry date of the lease prior to the renegotiation of the
terms of that lease. In the Four Month Period, the amount of revenue loss
attributed to Renegotiated Leases was $3.2 million, as compared to $Nil assumed
in the 2001 Base Case. This related primarily to renegotiations with two Latin
American lessees, two European lessees, two North American lessees and one Asian
lessee representing 10 aircraft in total on lease to these lessees at March 31,
2004

     For details of current lessee restructurings please refer to "Item 1.
Business -- The Aircraft, Related Leases and Collateral -- The Lessees".

[3]  RENTAL RESET -- RELEASING EVENTS WHERE NEW LEASE RATE DEVIATED FROM THE
     2001 BASE CASE

     "RENTAL RESETS" is a measure of the difference in rental revenue when new
lease rates are different from those assumed in the 2001 Base Case, including
lease rate adjustments for changes in interest rates on floating rate leases and
lease rates achieved where revenues are dependent on aircraft usage. The loss of
rental revenue as a result of Rental Resets amounted to $44.3 million in the
Four Month Period, as compared to $Nil assumed in the 2001 Base Case. This
reflects current market conditions where an oversupply of aircraft has resulted
in lower lease rates upon re-leasing or extension of leases than assumed in the
2001 Base Case.

[4]  LEASE RENTALS -- AIRCRAFT SALES

     "LEASE RENTALS -- AIRCRAFT SALES" represents rental revenue foregone in
respect of aircraft sold prior to their assumed sale date in the 2001 Base Case,
net of rental revenue received in respect of aircraft remaining on lease after
their assumed sale date in the 2001 Base Case. In the 2001 Base Case, all
aircraft are assumed to be sold either at the end of their useful economic life
or, where an aircraft was subject to a lease with the lease expiry date falling
after the end of its useful economic life, on the contracted lease expiry date.
Since March 2001, three DC9-51 aircraft, one DC9-32 aircraft, three DC8-71F
aircraft, two B727-200A aircraft, four B737-200A aircraft, three Metro-III
aircraft and one A300-B4-200 aircraft have been sold prior to their assumed sale
date in the 2001 Base Case, resulting in a negative variance of $3.8 million in
lease rentals compared to the 2001 Base Case in the Four Month Period. Lease
rentals totalling $0.2 million were received in the Four Month Period in respect
of one DC9-32 aircraft and one A300C4-200 aircraft, both of which have remained
on lease after their assumed sale date in the 2001 Base Case.

[5]  CONTRACTED LEASE RENTALS

     "CONTRACTED LEASE RENTALS" represents the current contracted lease rental
rollout which is equal to the 2001 Base Case Lease Rentals less adjustments for
Renegotiated Leases, Rental Resets and Lease Rentals -- Aircraft

                                        60
<PAGE>

Sales. For the Four Month Period, Contracted Lease Rentals were $85.6 million,
which was $51.1 million less than assumed in the 2001 Base Case. The difference
is due to losses from Renegotiated Leases, Rental Resets and Lease Rentals --
Aircraft Sales as discussed above.

[6]  MOVEMENT IN CURRENT ARREARS BALANCE

     "CURRENT ARREARS" is the total Contracted Lease Rentals outstanding from
current lessees at a given date but excluding any amounts classified as Bad
Debts. There was a net increase of $2.6 million in the Current Arrears balance
over the Four Month Period, as compared to $Nil assumed in the 2001 Base Case.

NET STRESS-RELATED COSTS

     "NET STRESS-RELATED COSTS" is a combination of all the factors which can
cause actual lease rentals to vary from the Contracted Lease Rentals. The 2001
Base Case assumed Net Stress-Related Costs equal to 6.0% of the 2001 Base Case
Lease Rentals in the Four Month Period. For the Four Month Period, Net
Stress-Related Costs incurred amounted to a net cash outflow of $11.0 million
(8.0% of Lease Rentals) compared to $8.2 million outflow assumed in the 2001
Base Case, a variance of $2.8 million that is due to the five factors described
in items [8] to [12] below.

[8]  BAD DEBTS

     "BAD DEBTS" are lease rental arrears owed by lessees which have defaulted
and which are deemed irrecoverable. Bad Debts were $Nil for the Four Month
Period, $1.4 million less than the 2001 Base Case assumption of $1.4 million
(1.0% of Lease Rentals).

[9]  DEFERRED ARREARS BALANCE

     "DEFERRED ARREARS BALANCE" refers to current arrears that have been
capitalized and restructured into a deferred balance. In the Four Month Period,
Airplanes Group received payments totaling $5.5 million in accordance with these
restructurings. Payments assumed to be received in accordance with
restructurings included in the 2001 Base Case were $Nil for the Four Month
Period.

[10]  AIRCRAFT ON GROUND ("AOG")

     "AOG" is defined as the 2001 Base Case Lease Rentals lost when an aircraft
is off-lease or deemed non-revenue earning. Airplanes Group had twenty-three
aircraft AOG at various times during the Four Month Period. In the Four Month
Period, the 2001 Base Case Lease Rentals loss attributed to AOG was $17.2
million (12.6% of Lease Rentals), as compared to $5.7 million (4.2% of Lease
Rentals) assumed under the 2001 Base Case.

[11]  OTHER LEASING INCOME

     "OTHER LEASING INCOME" consists of miscellaneous income received in
connection with a lease other than contracted rentals, maintenance receipts and
security deposits, such as early termination payments or default interest. In
the Four Month Period, Other Leasing Income amounted to $0.7 million, as
compared to $Nil assumed under the 2001 Base Case.

[12]  REPOSSESSION COSTS

     "REPOSSESSION COSTS" cover legal and aircraft technical costs incurred as a
result of repossessing an aircraft. In the Four Month Period, Repossession Costs
amounted to $Nil, as compared to $1.1 million assumed under the 2001 Base Case.

[14]  NET LEASE RENTAL

     "NET LEASE RENTAL" is Contracted Lease Rentals less any movement in Current
Arrears balance and Net Stress-Related Costs. In the Four Month Period, Net
Lease Rental amounted to $72.0 million, $56.5 million less

                                        61
<PAGE>

than that assumed in the 2001 Base Case. The variance was attributable to the
combined effect of the factors outlined in items [2] to [4] and in items [6] to
[12] above.

[15]  INTEREST EARNED

     "INTEREST EARNED" relates to interest received on cash balances held in the
Collection and Expense Accounts. Cash held in the Collection Account consists of
the cash liquidity reserve amount ($80 million plus the security deposit amount,
subject to available cashflows), in addition to the intra-month cash balances
for all the rentals and maintenance payments collected prior to the monthly
payment date. The Expense Account contains cash set aside to pay for expenses
which are expected to be payable over the next month. In the Four Month Period,
Interest Earned amounted to $0.3 million, $2.0 million less than that assumed in
the 2001 Base Case. The difference is due to a lower cash balance in the
Collection Account as available cashflows were adequate to allocate only $60
million to the cash liquidity reserve amount on each payment date in the Four
Month Period (refer to item [29A] below), and a lower average reinvestment rate
than assumed in the 2001 Base Case. The average actual reinvestment rate for the
Four Month Period was 1.0% (excluding a $5 million guaranteed investment
contract) as compared to the 5.2% assumed in the 2001 Base Case.

[16]  AIRCRAFT SALES

     Aircraft sales proceeds totalling $5.5 million were received in the Four
Month Period in respect of the sale of two B737-200A aircraft and two DC8-71F
aircraft. Aircraft sales proceeds for the Four Month Period also included the
receipt of sale deposits totalling $0.3 million in respect of two B737-200A
aircraft and one DC8-71F aircraft which were subject to letters of intent for
sale. Two of these aircraft have been sold as of the date of this Form 10-K. In
the 2001 Base Case, aircraft sales proceeds totaling $11.4 million are assumed
to be received in the Four Month Period in respect of the assumed sale of two
DC9-51 aircraft, which had been sold in prior periods, and one A300C4-200
aircraft which remains on lease. In the 2001 Base Case all aircraft are assumed
to be sold either at the end of their useful economic life or, where an aircraft
was subject to a lease with the lease expiry date falling after the end of its
useful economic life, on the contracted lease expiry date.

[17]  NET MAINTENANCE

     "NET MAINTENANCE" refers to maintenance reserve revenue received less any
maintenance reimbursements paid to lessees. In the Four Month Period, positive
net maintenance cashflows of $10.7 million were received. The 2001 Base Case
makes no assumptions for Net Maintenance as it assumes that, over time,
maintenance revenue will equal maintenance expenditure. However, it is unlikely
that in any particular reporting period, maintenance revenue will exactly equal
maintenance expenses.

CASH EXPENSES

     "TOTAL CASH EXPENSES" include Aircraft Operating Expenses and Selling,
General and Administrative ("SG&A") Expenses. In the Four Month Period, Total
Cash Expenses were $21.7 million compared to $17.8 million assumed in the 2001
Base Case, a negative variance of $3.9 million. A number of factors discussed
below have given rise to this.

     "AIRCRAFT OPERATING EXPENSES" includes all operational costs related to the
leasing of aircraft including costs of insurance, re-leasing and other overhead
costs.

[20]  RE-LEASING AND OTHER OVERHEAD COSTS

     "RE-LEASING AND OTHER OVERHEAD COSTS" consist of miscellaneous re-delivery
and leasing costs associated with re-leasing events, costs of insurance and
other lessee-related overhead costs. In the Four Month Period, these costs
amounted to $8.6 million (or 6.3% of Lease Rentals) compared to $6.8 million (or
5.0% of Lease Rentals) assumed in the 2001 Base Case. Actual Re-Leasing and
Other Overhead Costs were higher than the 2001 Base Case assumption primarily
due to higher than assumed transition costs on aircraft delivering to new
lessees and higher payments made in the form of lessor contributions to defray
certain technical costs during the term of certain leases.
                                        62
<PAGE>

     "SG&A EXPENSES" relate to fees paid to the servicer and to other service
providers.

[21]  AIRCRAFT SERVICER FEES

     "AIRCRAFT SERVICER FEES" are defined as amounts paid to the servicer in
accordance with the terms of the servicing agreement. In the Four Month Period,
the total Aircraft Servicer Fees paid were $8.9 million, $1.0 million more than
that assumed in the 2001 Base Case.

     Aircraft Servicer Fees consist of:

<Table>
<Caption>
                                                                $M
                                                                ---
<S>                                                             <C>
Retainer Fee................................................    7.4
Minimum Incentive Fee.......................................    1.5
Core Cashflow/Sales Incentive Fee...........................    0.0
                                                                ---
Total Aircraft Servicer Fee.................................    8.9
                                                                ===
</Table>

     The Retainer Fee is a fixed amount per month per aircraft and changes only
as aircraft are sold.

[23]  OTHER SERVICER FEES AND OTHER OVERHEADS

     "OTHER SERVICER FEES AND OTHER OVERHEADS" relate to fees and expenses paid
to other service providers including the administrative agent, the cash manager,
financial advisers, legal advisers and accountants and to the
directors/controlling trustees. In the Four Month Period, Other Servicer Fees
and Other Overheads amounted to $4.2 million, $1.1 million more than an assumed
expense of $3.1 million in the 2001 Base Case.

[29A]  SHORTFALL IN LIQUIDITY RESERVE

     Airplanes Group is required to maintain a cash balance in the collection
account under the indentures, subject to available cashflows, in an amount equal
to the sum of:

     -  the maintenance reserve amount ($80 million); and

     -  a security deposit reserve amount.

     Under the priority of payments applicable to Airplanes Group, this cash
balance is retained at point (iii) First Collection Account Top-up (maintenance
reserve amount -- $60 million) and at point (x) Second Collection Account Top-up
(maintenance reserve amount -- $20 million plus security deposit reserve
amount).

     "SHORTFALL IN LIQUIDITY RESERVE" relates to any shortfall in the funds
allocated to the "First Collection Account Top-up" and "Second Collection
Account Top-up" as a result of Airplanes Group not having sufficient balance of
funds after payment of expenses and all required payments on the notes which
rank prior to the applicable liquidity reserve amount under the priority of
payments applicable to Airplanes Group. Since the May 2003 payment date there
has been a depletion of the "Second Collection Account Top-up" and beginning on
the December 15, 2003 payment date cashflows have been insufficient to allocate
any funds to the "Second Collection Account Top-up". On the May 17, 2004 payment
date, there was a shortfall in the liquidity reserve amount of $45.7 million as
compared to a shortfall of $48.1 million on the January 15, 2004 payment date,
representing an overall decrease of $2.4 million in the Shortfall in Liquidity
Reserve for the Four Month Period. This decrease in the Shortfall in Liquidity
Reserve is explained by a net reduction of $2.4 million in the security deposit
reserve amount in the Four Month Period. Under the 2001 Base Case, a Shortfall
in Liquidity Reserve was not anticipated.

[30]  INTEREST PAYMENTS

     In the Four Month Period, interest payments to the holders of the class A,
B, C and D notes amounted to $8.3 million which is $47.1 million lower than
assumed under the 2001 Base Case.

     Interest payments on the floating rate class A notes amounted to $8.3
million, $18.8 million lower than assumed under the 2001 Base Case, reflecting a
lower than expected level of average interest rates on the floating rate notes,
the impact of which was partly offset by a higher principal balance outstanding
on these notes than

                                        63
<PAGE>

assumed in the 2001 Base Case. The 2001 Base Case assumed LIBOR to be 5.2%
whereas the average monthly LIBOR rate in the Four Month Period was 1.1%. Our
cashflows have been inadequate to pay any interest on the class B, C and D notes
in the Four Month Period. Interest payments assumed under the 2001 Base Case in
the Four Month Period amounted to $4.5 million, $9.5 million and $14.3 million
respectively on the class B, C and D notes. Interest has begun to accrue on the
unpaid interest on the class B, C and D notes in accordance with the terms of
these notes and will continue to accrue until the arrears of interest are paid
in full. Accrued and unpaid interest (including interest accrued on unpaid
interest) amounted to $2.1 million, $14.5 million and $22.0 million respectively
on the class B, C and D notes following the May 17, 2004 payment date.

     In the Four Month Period, there was a continued suspension of payments of
the class E minimum interest amount of 1% (refer to item 33 below). No payments
of class E minimum interest were anticipated in the 2001 Base Case.

     Airplanes Group's $700 million subclass A-8 notes had an expected final
payment date of March 15, 2003. Given market conditions and the impact these
conditions have had on our performance, we believed that such a refinancing at
that time was not economically viable and therefore it did not proceed as
scheduled. In accordance with the terms of the subclass A-8 notes, step-up
interest of 0.5% per annum began to accrue on these notes from March 17, 2003
(the first business day following the expected final payment date) and will
continue to accrue until they are repaid in full or refinanced. Under the
priority of payments applicable to Airplanes Group, step-up interest is payable
after payment of expenses, interest, minimum principal and scheduled principal
on class A, B, C and D notes and any aircraft modification payments. To the
extent that step-up interest is not paid, it will accrue in accordance with the
terms of the subclass A-8 notes. Available cashflows have not been sufficient to
allow payment of step-up interest on any of the payment dates since March 2003
and this is expected to continue to be the case. Total step-up interest
(including interest accrued on unpaid step-up interest) accrued and unpaid on
the subclass A-8 notes at May 17, 2004 was $4.2 million.

[31]  SWAP AND SWAPTION CASHFLOWS

     Airplanes Group's net swap payments during the Four Month Period were $13.6
million higher than the $0.4 million assumed in the 2001 Base Case due to lower
than anticipated interest rates.

[33]  PRINCIPAL PAYMENTS

     In the thirty-eight month period from March 10, 2001 to May 17, 2004, total
principal payments amounted to $422.4 million, (comprising $370.9 million on the
class A notes and $51.5 million on the class B notes), $153.1 million less than
assumed in the 2001 Base Case. The breakdown of the $153.1 million variance is
set out on page 68. In the Four Month Period, total principal payments amounted
to $40.4 million, (comprising $40.4 million on the class A notes), $28.2 million
less than assumed in the 2001 Base Case. The breakdown of the $28.2 million
variance is set out on page 67.

     Applying the declining value assumptions in the 1996 Base Case to the
original March 1996 fleet appraisals and adjusting for aircraft sales, the total
appraised value of the aircraft was assumed to be $2,775.2 million at May 17,
2004. Our portfolio is appraised annually and the most recent appraisal was
obtained on January 31, 2004 and valued the current portfolio at $2,031.3
million. Applying the declining value assumptions to this appraisal, the total
appraised value was $1,973.5 million at May 17, 2004.

     As a consequence of the cumulative excess decline in appraised values
experienced since March 1996, combined with overall cash performance in that
period, we have been required to pay class A principal adjustment amount to the
extent of available cashflows throughout the thirty-eight month period since the
2001 refinancing. However, we have not always had sufficient cashflows to pay
class A principal adjustment amount in full and since the April 15, 2003 payment
date, we have not had sufficient cashflows to pay any class A principal
adjustment amount. Class A principal adjustment amount is intended to accelerate
the principal amortization schedule of the class A notes when the appraised
value of the aircraft declines at a greater rate than the decline in appraised
values assumed in the 1996 Base Case by reference to certain loan to current
appraised value ratios. Since the class A principal adjustment amount ranks
ahead of the scheduled principal payments on the class C and D notes, and since
available cashflows were not sufficient to pay all of the class A principal
adjustment
                                        64
<PAGE>

amount, scheduled principal payments on the class C and D notes have been
deferred on each payment date during the thirty-eight month period since the
2001 refinancing. Total deferrals of class C and class D scheduled principal
amounts amounted to $81.4 million and $51.5 million respectively as of May 17,
2004.

     Based on the most recent annual appraisal dated January 31, 2004, the
decline in appraised values in the year to the February 2004 payment date was
approximately $176 million more than the decline assumed in the 1996 Base Case.
The decline in appraised values in this period has resulted in an increase in
the arrears of class A principal adjustment amount at the February 17, 2004
payment date from $343.5 million to $451.2 million. The class A principal
adjustment amount outstanding was $457.7 million as at May 17, 2004.

     To the extent that we have sufficient available funds, we are also required
to pay a minimum principal amount on the class A notes in order to maintain
certain loan to initial appraised value ratios. (Since class A minimum principal
amount is determined by reference to initial appraised values, it is unaffected
by the annual appraisals referred to above.) As a result of earlier payments of
class A principal adjustment amount, described above, we remained ahead of the
required class A minimum principal payment schedule. However, as described
above, we have not always had sufficient cashflows to pay class A principal
adjustment amounts in full and since the April 15, 2003 payment date, we have
not had sufficient cashflows to pay any class A principal adjustment amount. As
a result, since the August 15, 2003 payment date we have no longer been ahead of
the required class A minimum principal payment schedule. Therefore we had to
recommence payments of minimum principal on the class A notes to the extent of
available cashflows on that date. Our cashflows were insufficient to pay minimum
principal on the class A notes in full beginning on the December 15, 2003
payment date and minimum principal arrears on the class A notes were $24.3
million following the May 17, 2004 payment date. Since minimum principal on the
class A notes ranks ahead of interest and minimum principal on the class B notes
and interest on the class C and D notes in the priority of payments, our
cashflows have been inadequate to pay any interest or minimum principal on the
class B notes or any interest on the class C and D notes, beginning on the
December 15, 2003 payment date. Minimum principal arrears on the class B notes
were $11.5 million following the May 17, 2004 payment date.

     The appraised values are based upon the value of the aircraft at normal
utilization rates in an open, unrestricted and stable market, and take into
account long-term trends, including current expectations of particular models
becoming obsolete more quickly, as a result of airlines switching to different
models, manufacturers ceasing production or lease values for aircraft declining
more rapidly than previous predictions. As a theoretical value, the appraised
value is not indicative of market value and thus there is no guarantee that we
would obtain the appraised value upon sale of any aircraft. The current market
value of each of our aircraft is less than, and in some cases such as the
MD-11s, significantly less than the appraised value. If the current oversupply
of aircraft continues longer term, given the age of our fleet, certain of our
aircraft may become obsolete significantly earlier than the useful life
expectancy assumed in the 2001 Base Case assumptions, which would negatively
impact appraised values further. However, since we are no longer able to pay
class A principal adjustment amount and since, as a result of our consent
solicitation, we are no longer required to sell our aircraft at or above the
note target price, the appraised values of our aircraft are now of little
significance except as a basis for providing statistical information on the
portfolio and for complying with certain technical provisions in the indentures.

OTHER ISSUES

     For a discussion of our current expectations as to our future ability to
make payments on our notes and certificates in light of our weaker than expected
performance as well as a discussion of rating actions on the certificates, see
"-- Recent Developments -- Performance".

                                        65
<PAGE>

<Table>
<Caption>
NOTE                             REPORT LINE NAME                                   DESCRIPTION
----                  ---------------------------------------  ------------------------------------------------------
<S>                   <C>                                      <C>
                      CASH COLLECTIONS
[1]                   Lease Rentals..........................  Assumptions as per the 2001 Base Case
[2]                   -- Renegotiated Leases.................  Change in contracted rental cashflow caused by a
                                                               renegotiated lease
[3]                   -- Rental Resets.......................  Re-leasing events where new lease rate deviated from
                                                               the 2001 Base Case
[4]                   -- Lease Rentals -- Aircraft Sales.....  Revenue foregone on aircraft sold prior to their
                                                               assumed sale date in the 2001 Base Case net of revenue
                                                               received on aircraft remaining on lease after their
                                                               assumed sale date in the 2001 Base Case
[5] (SUM)[1]...[4]    CONTRACTED LEASE RENTALS...............  Current Contracted Lease Rentals due as at the latest
                                                               Calculation Date
[6]                   Movement in Current Arrears Balance....  Current Contracted Lease Rentals not received as at
                                                               the latest Calculation Date, excluding Bad Debts
[7]                   Less Net Stress Related Costs
[8]                   -- Bad Debts...........................  Arrears owed by former lessees and deemed
                                                               irrecoverable
[9]                   -- Deferred Arrears Balance............  Current arrears that have been capitalised and
                                                               restructured as a Note Payable
[10]                  -- AOG.................................  Loss of rental due to an aircraft being off-lease and
                                                               non-revenue earning
[11]                  -- Other Leasing Income................  Includes lease termination payments, rental guarantees
                                                               and late payments charges
[12]                  -- Repossession........................  Legal and technical costs incurred in repossessing
                                                               aircraft.
[13] (SUM)[8]...[12]  Sub-total
[14] [5]+[6]+[13]     NET LEASE RENTAL.......................  Contracted Lease Rentals less Movement in Current
                                                               Arrears Balance and Net Stress Related Costs
[15]                  Interest Earned........................  Interest earned on monthly cash balances
[16]                  Aircraft Sales.........................  Proceeds, net of fees and expenses, from the sale of
                                                               aircraft.
[17]                  Net Maintenance........................  Maintenance Revenue Reserve received less
                                                               reimbursements to lessees
[18]                  Other Receipts.........................  Receipts from GE Capital under the Tax Sharing
                                                               Agreement
[19]
  (SUM)[14]...[18]    Total Cash Collections.................  Net Lease Rental + Interest Earned + Aircraft Sales +
                                                               Net Maintenance + Other Receipts
                      CASH EXPENSES
                      Aircraft Operating Expenses............  All operational costs related to the leasing of
                                                               aircraft.
[20]                  Releasing and Other Overheads..........  Costs associated with transferring an aircraft from
                                                               one lessee to another, costs of insurance and other
                                                               lessee-related overheads
                      SG&A Expenses
[21]                  Aircraft Servicer Fees.................  Monthly and annual fees paid to servicer
                      -- Retainer Fee........................  Fixed amount per month per aircraft
                      -- Minimum Incentive Fee...............  Minimum annual fee paid to servicer for performance
                                                               above an annually agreed target
                      -- Core Cashflow/Sales Incentive Fee...  Fees (in excess of Minimum Incentive Fee above) paid
                                                               to servicer for performance above an annually agreed
                                                               target/on sale of an aircraft
[22] [21]             Sub-total
[23]                  Other Servicer Fees and Other
                      Overheads..............................  Administrative Agent, trustee and professional fees
                                                               paid to other service providers and other overheads
[23A]                 Other SG&A Expenses....................  Costs relating to the assumed refinancing of the
                                                               subclass A-8 notes in March 2003, as assumed under the
                                                               2001 Base Case and costs relating to the consent
                                                               solicitation for Indenture amendment
[24] [22]+[23]+[23A]  Sub-total
[25] [20]+[24]        TOTAL CASH EXPENSES....................  Aircraft Operating Expenses + SG&A Expenses
                      NET CASH COLLECTIONS
[26] [19]             Total Cash Collections.................  Line 19 above
[27] [25]             Total Cash Expenses....................  Line 25 above
[28]                  Movement in Expense Account............  Relates to reduction in accrued expense amounts
[29]                  Reduction in Liquidity Reserve.........  Reduction of the miscellaneous reserve amount from
                                                               $40m to $Nil in April 2001
[29A]                 Shortfall in Liquidity Reserve.........  Reduction in the balance of funds on deposit in the
                                                               collection account below the liquidity reserve amount
[30]                  Interest Payments......................  Interest paid on all outstanding debt
[31]                  Swap payments..........................  Net swap payments (paid)/received
[32]
  (SUM)[26]...[31]    Total
[33]                  PRINCIPAL PAYMENTS.....................  Principal payments on debt
</Table>

                                        66
<PAGE>

            AIRPLANES GROUP CASHFLOW PERFORMANCE FOR THE PERIOD FROM
                  JANUARY 10, 2004 TO MAY 17, 2004 (4 MONTHS)
         COMPARISON OF ACTUAL CASHFLOWS VERSUS 2001 BASE CASE CASHFLOWS

<Table>
<Caption>
                                                                                             % OF LEASE RENTALS UNDER
                                                                                                THE 2001 BASE CASE
                                                                                           -----------------------------
                                                                      2001                            2001
                                                          ACTUAL    BASE CASE   VARIANCE   ACTUAL   BASE CASE   VARIANCE
                                                          -------   ---------   --------   ------   ---------   --------
                                                                   ($ MILLIONS)
<S>  <C>         <C>                                      <C>       <C>         <C>        <C>      <C>         <C>
                 CASH COLLECTIONS
1                Lease Rentals..........................    136.7      136.7         0.0   100.0%     100.0%       0.0%
2                -- Renegotiated Leases.................     (3.2)       0.0        (3.2)   (2.3%)      0.0%      (2.3%)
3                -- Rental Resets.......................    (44.3)       0.0       (44.3)  (32.4%)      0.0%     (32.4%)
4                -- Lease Rentals -- Aircraft Sales.....     (3.6)       0.0        (3.6)   (2.6%)      0.0%      (2.6%)
                                                          -------    -------    --------   -----      -----     ------
5    (SUM) 1-4   CONTRACTED LEASE RENTALS...............     85.6      136.7       (51.1)   62.6%     100.0%     (37.4%)
6                Movement in Current Arrears Balance....     (2.6)       0.0        (2.6)   (1.9%)      0.0%      (1.9%)
7                less Net Stress Related Costs
8                -- Bad Debts...........................      0.0       (1.4)        1.4     0.0%      (1.0%)      1.0%
9                -- Deferred Arrears Balance............      5.5        0.0         5.5     4.0%       0.0%       4.0%
10               -- AOG.................................    (17.2)      (5.7)      (11.5)  (12.6%)     (4.2%)     (8.4%)
11               -- Other Leasing Income................      0.7        0.0         0.7     0.5%       0.0%       0.5%
12               -- Repossession........................      0.0       (1.1)        1.1     0.0%      (0.8%)      0.8%
                                                          -------    -------    --------   -----      -----     ------
13   (SUM) 8-12  Sub-total..............................    (11.0)      (8.2)       (2.8)   (8.0%)     (6.0%)     (2.0%)
14   5+6+13      NET LEASE RENTAL.......................     72.0      128.5       (56.5)   52.7%      94.0%     (41.3%)
15               Interest Earned........................      0.3        2.3        (2.0)    0.2%       1.7%      (1.5%)
16               Aircraft Sales.........................      5.8       11.4        (5.6)    4.2%       8.3%      (4.1%)
17               Net Maintenance........................     10.7        0.0        10.7     7.8%       0.0%       7.8%
18               Other Receipts.........................      0.0        0.0         0.0     0.0%       0.0%       0.0%
                                                          -------    -------    --------   -----      -----     ------
19   (SUM) 14-18 TOTAL CASH COLLECTIONS.................     88.8      142.2       (53.4)   65.0%     104.0%     (39.1%)
                                                          =======    =======    ========   =====      =====     ======
                 CASH EXPENSES
                 Aircraft Operating Expenses
20               -- Re-leasing and other overheads......     (8.6)      (6.8)       (1.8)   (6.3%)     (5.0%)     (1.3%)
                 SG&A Expenses
21               Aircraft Servicer Fees
                 -- Retainer Fee........................     (7.4)      (7.4)        0.0    (5.4%)     (5.4%)      0.0%
                 -- Minimum Incentive Fee...............     (1.5)      (0.5)       (1.0)   (1.1%)     (0.4%)     (0.7%)
                 -- Core Cashflow/Sales Incentive Fee...      0.0        0.0         0.0     0.0%       0.0%       0.0%
                                                          -------    -------    --------   -----      -----     ------
22   21          Sub-total..............................     (8.9)      (7.9)       (1.0)   (6.5%)     (5.8%)     (0.7%)
23               Other Servicer Fees and Other               (4.2)      (3.1)       (1.1)   (3.1%)     (2.3%)     (0.8%)
                 Overheads..............................
23A              Other SG&A Expenses....................      0.0        0.0         0.0     0.0%       0.0%       0.0%
                                                          -------    -------    --------   -----      -----     ------
24   22+23+23A   Sub-total..............................    (13.1)     (11.0)       (2.1)   (9.6%)     (8.0%)     (1.5%)
                                                          -------    -------    --------   -----      -----     ------
25   24+20       TOTAL CASH EXPENSES....................    (21.7)     (17.8)       (3.9)  (15.9%)    (13.0%)     (2.9%)
                                                          =======    =======    ========   =====      =====     ======
                 NET CASH COLLECTIONS
26   19          Total Cash Collections.................     88.8      142.2       (53.4)   65.0%     104.0%     (39.1%)
27   25          Total Cash Expenses....................    (21.7)     (17.8)       (3.9)  (15.9%)    (13.0%)     (2.9%)
28               Movement in Expense Account............     (2.0)       0.0        (2.0)   (1.5%)      0.0%      (1.5%)
29               Reduction in Liquidity Reserve.........      0.0        0.0         0.0     0.0%       0.0%       0.0%
29A              Shortfall in Liquidity Reserve.........     (2.4)       0.0        (2.4)   (1.8%)      0.0%      (1.8%)
30               Interest Payments......................     (8.3)     (55.4)       47.1    (6.1%)    (40.5%)     34.5%
31               Swap Payments..........................    (14.0)      (0.4)      (13.6)  (10.2%)     (0.3%)     (9.9%)
                                                          -------    -------    --------   -----      -----     ------
32   (SUM) 26-31 TOTAL..................................     40.4       68.6       (28.2)   29.6%      50.2%     (20.6%)
                                                          =======    =======    ========   =====      =====     ======
33               PRINCIPAL PAYMENTS
                 Class A................................     40.4       61.8       (21.4)   29.6%      45.2%     (15.6%)
                 Class B................................      0.0        6.8        (6.8)    0.0%       5.0%      (5.0%)
                                                          -------    -------    --------   -----      -----     ------
                 TOTAL..................................     40.4       68.6       (28.2)   29.6%      50.2%     (20.6%)
                                                          =======    =======    ========   =====      =====     ======
                 DEBT BALANCES AT MAY 17, 2004
                 Subclass A-6...........................     74.5        0.0
                 Subclass A-8...........................    700.0      700.0
                 Subclass A-9...........................    750.0      680.1
                 Class B................................    226.8      218.1
                 Class C................................    349.8      349.8
                 Class D................................    395.1      395.1
                                                          -------    -------
                                                          2,496.2    2,343.1
                                                          =======    =======
</Table>

                                        67
<PAGE>

            AIRPLANES GROUP CASHFLOW PERFORMANCE FOR THE PERIOD FROM
                   MARCH 10, 2001 TO MAY 17, 2004 (38 MONTHS)
         COMPARISON OF ACTUAL CASHFLOWS VERSUS 2001 BASE CASE CASHFLOWS

<Table>
<Caption>
                                                                                             % OF LEASE RENTALS UNDER
                                                                                                THE 2001 BASE CASE
                                                                                           -----------------------------
                                                                      2001                            2001
                                                          ACTUAL    BASE CASE   VARIANCE   ACTUAL   BASE CASE   VARIANCE
                                                          -------   ---------   --------   ------   ---------   --------
                                                                   ($ MILLIONS)
<S>  <C>         <C>                                      <C>       <C>         <C>        <C>      <C>         <C>
                 CASH COLLECTIONS
1                Lease Rentals                            1,327.4    1,327.4         0.0   100.0%     100.0%       0.0%
2                -- Renegotiated Leases                     (79.6)       0.0       (79.6)   (6.0%)      0.0%      (6.0%)
3                -- Rental Resets                          (230.7)       0.0      (230.7)  (17.4%)      0.0%     (17.4%)
4                -- Lease Rentals -- Aircraft Sales         (12.3)       0.0       (12.3)   (0.9%)      0.0%      (0.9%)
                                                          -------    -------    --------   -----      -----     ------
5    (SUM) 1-4   CONTRACTED LEASE RENTALS...............  1,004.8    1,327.4      (322.6)   75.7%     100.0%     (24.3%)
6                Movement in Current Arrears Balance....     (1.5)       0.0        (1.5)   (0.1%)      0.0%      (0.1%)
7                less Net Stress Related Costs
8                -- Bad Debts...........................    (10.2)     (13.3)        3.1    (0.8%)     (1.0%)      0.2%
9                -- Deferred Arrears Balance............     12.7        3.1         9.6     1.0%       0.2%       0.7%
10               -- AOG.................................   (103.4)     (55.9)      (47.5)   (7.8%)     (4.2%)     (3.6%)
11               -- Other Leasing Income................     12.8        0.0        12.8     1.0%       0.0%       1.0%
12               -- Repossession........................     (4.1)     (10.6)        6.5    (0.3%)     (0.8%)      0.5%
                                                          -------    -------    --------   -----      -----     ------
13   (SUM) 8-12  Sub-total..............................    (92.2)     (76.7)      (15.5)   (6.9%)     (5.8%)     (1.2%)
14   5+6+13      NET LEASE RENTAL.......................    911.1    1,250.7      (339.6)   68.6%      94.2%     (25.6%)
15               Interest Earned........................      9.4       21.9       (12.5)    0.7%       1.6%      (0.9%)
16               Aircraft Sales.........................     35.2       40.7        (5.5)    2.7%       3.1%      (0.4%)
17               Net Maintenance........................     72.8        0.0        72.8     5.5%       0.0%       5.5%
18               Other Receipts.........................      8.3        0.0         8.3     0.6%       0.0%       0.6%
                                                          -------    -------    --------   -----      -----     ------
19   (SUM) 14-18 TOTAL CASH COLLECTIONS.................  1,036.8    1,313.3      (276.5)   78.1%      98.9%     (20.8%)
                                                          =======    =======    ========   =====      =====     ======
                 CASH EXPENSES
                 Aircraft Operating Expenses
20               -- Re-leasing and other overheads......    (74.5)     (66.5)       (8.0)   (5.6%)     (5.0%)     (0.6%)
                 SG&A Expenses
21               Aircraft Servicer Fees
                 -- Retainer Fee........................    (70.7)     (70.7)        0.0    (5.3%)     (5.3%)      0.0%
                 -- Minimum Incentive Fee...............     (6.0)      (4.7)       (1.3)   (0.5%)     (0.4%)     (0.1%)
                 -- Core Cashflow/Sales Incentive Fee...     (0.2)       0.0        (0.2)   (0.0%)      0.0%      (0.0%)
                                                          -------    -------    --------   -----      -----     ------
22   21          Sub-total..............................    (76.9)     (75.4)       (1.5)   (5.8%)     (5.7%)     (0.1%)
23               Other Servicer Fees and Other              (35.1)     (32.0)       (3.1)   (2.6%)     (2.4%)     (0.2%)
                 Overheads..............................
23A              Other SG&A Expenses....................     (2.0)      (4.7)        2.7    (0.2%)     (0.4%)      0.2%
                                                          -------    -------    --------   -----      -----     ------
24   22+23+23A   Sub-total..............................   (114.0)    (112.1)       (1.9)   (8.6%)     (8.4%)     (0.1%)
                                                          -------    -------    --------   -----      -----     ------
25   24+20       TOTAL CASH EXPENSES....................   (188.5)    (178.6)       (9.9)  (14.2%)    (13.5%)     (0.7%)
                                                          =======    =======    ========   =====      =====     ======
                 NET CASH COLLECTIONS
26   19          Total Cash Collections.................  1,036.8    1,313.3      (276.5)   78.1%      98.9%     (20.8%)
27   25          Total Cash Expenses....................   (188.5)    (178.6)       (9.9)  (14.2%)    (13.5%)     (0.7%)
28               Movement in Expense Account............     (8.5)       0.0        (8.5)   (0.6%)      0.0%      (0.6%)
29               Reduction in Liquidity Reserve.........     40.0       40.0         0.0     3.0%       3.0%       0.0%
29A              Shortfall in Liquidity Reserve.........     45.7        0.0        45.7     3.4%       0.0%       3.4%
30               Interest Payments......................   (346.7)    (571.0)      224.3   (26.1%)    (43.0%)     16.9%
31               Swap Payments..........................   (156.4)     (28.2)     (128.2)  (11.8%)     (2.1%)     (9.7%)
                                                          -------    -------    --------   -----      -----     ------
32   (SUM) 26-31 TOTAL..................................    422.4      575.5      (153.1)   31.8%      43.4%     (11.5%)
                                                          =======    =======    ========   =====      =====     ======
33               PRINCIPAL PAYMENTS
                 Class A................................    370.9      515.3      (144.4)   27.9%      38.8%     (10.9%)
                 Class B................................     51.5       60.2        (8.7)    3.9%       4.5%      (0.6%)
                                                          -------    -------    --------   -----      -----     ------
                 TOTAL..................................    422.4      575.5      (153.1)   31.8%      43.4%     (11.5%)
                                                          =======    =======    ========   =====      =====     ======
                 DEBT BALANCES AT MAY 17, 2004
                 Subclass A-6...........................     74.5        0.0        74.5
                 Subclass A-8...........................    700.0      700.0         0.0
                 Subclass A-9...........................    750.0      680.1        69.9
                 Class B................................    226.8      218.1         8.7
                 Class C................................    349.8      349.8         0.0
                 Class D................................    395.1      395.1         0.0
                                                          -------    -------    --------
                                                          2,496.2    2,343.1       153.1
                                                          =======    =======    ========
</Table>

                                        68
<PAGE>

<Table>
<Caption>
                                                        MAR-01                             2001
                                                       CLOSING          ACTUAL          BASE CASE
                                                       -------          ------          ---------
                                                     ($ MILLIONS)    ($ MILLIONS)      ($ MILLIONS)
<S>  <C>                                             <C>             <C>               <C>          <C>
     NET CASH COLLECTIONS........................                        422.4             575.5
     Add Back Interest and Swap Payments.........                        503.1             599.2
                                                                       -------           -------
a..  Net Cash Collections (excl. interest and
     swap payments)..............................                        925.5           1,174.7
                                                                       =======           =======
b    Swaps.......................................                        156.4              28.2
c    Class A Interest............................                        135.6             296.8
d    Class A Minimum.............................                        115.9               0.0
e    Class B Interest............................                         20.5              47.9
f    Class B Minimum.............................                         51.5              60.2
g    Class C Interest............................                         76.0              90.3
h    Class D Interest............................                        114.6             136.0
i    Class A Principal Adjustment................                        255.0             515.3
j    Class C Scheduled...........................                          0.0               0.0
k    Class D Scheduled...........................                          0.0               0.0
l    Permitted Aircraft Modifications............                          0.0               0.0
m    Step-up Interest............................                          0.0               0.0
n    Class E Minimum Interest....................                          0.0               0.0
o    Class B Supplemental........................                          0.0               0.0
p    Class A Supplemental........................                          0.0               0.0
                                                                       -------           -------
     TOTAL.......................................                        925.5           1,174.7
                                                                       =======           =======
[1].. INTEREST COVERAGE RATIO
     Class A.....................................                          3.2               3.6    = a/(b+c)
     Class B.....................................                          N/A               3.2    = a/(b+c+d+e)
     Class C.....................................                          N/A               2.2    = a/(b+c+d+e+f+g)
     Class D.....................................                          N/A               1.8    = a/(b+c+d+e+f+g+h)
[2]  DEBT COVERAGE RATIO
     Class A.....................................                          N/A               3.6    = a/(b+c+d)
     Class B.....................................                          N/A               2.7    = a/(b+c+d+e+f)
     Class C.....................................                          N/A               N/A    = a/(b+c+d+e+f+g+h+i+j)
     Class D.....................................                          N/A               N/A    = a/(b+c+d+e+f+g+h+i+j+k)
     LOAN TO VALUE RATIOS (IN U.S. DOLLARS)
[3]  Adjusted Portfolio Value                          3,108.6         1,973.5           2,507.2
     Liquidity Reserve Amount of which
     -- Cash.....................................        156.9            60.0             116.0
     -- Accrued Expenses.........................         12.6            13.0               0.0
                                                       -------         -------           -------
     Subtotal....................................        169.5            73.0             116.0
     Less Lessee Security Deposits...............         36.9             0.0              36.0
                                                       -------         -------           -------
     Subtotal....................................        132.6            73.0              80.0
                                                       -------         -------           -------
[4]  TOTAL ASSET VALUE...........................      3,241.2         2,046.5           2,587.2
                                                       =======         =======           =======
</Table>

<Table>
<Caption>
NOTE BALANCES AS AT:                        MARCH 15, 2001       MAY 17, 2004       MAY 17, 2004
--------------------                        ---------------    ----------------    ---------------
<S>                                         <C>       <C>      <C>       <C>       <C>       <C>
Class A...............................      1,895.4   58.5%    1,524.5    74.5%    1,380.1   53.3%
Class B...............................        278.3   67.1%      226.8    85.6%      218.1   61.8%
Class C...............................        349.8   77.9%      349.8   102.7%      349.8   75.3%
Class D...............................        395.1   90.0%      395.1   122.0%      395.1   90.6%
                                            -------            -------             -------
                                            2,918.6            2,496.2             2,343.1
                                            =======            =======             =======
</Table>

---------------
[1] "INTEREST COVERAGE RATIO" is equal to Net Cash Collections (excluding
    interest and swap payments) expressed as a ratio of the interest payments
    payable on each subclass of notes plus the interest and minimum principal
    payments payable on each subclass of notes that rank senior in priority of
    payment to the relevant subclass of notes. Actual Interest Coverage Ratios
    have not been provided for the class B, C and D notes as interest amounts
    have not been paid on these notes since the December 2003 payment date.

[2] "DEBT COVERAGE RATIO" is equal to Net Cash Collections (excluding interest
    and swap payments) expressed as a ratio of the interest and
    minimum/scheduled principal payments payable on each subclass of notes plus
    the interest and minimum/scheduled principal payments payable on each
    subclass of notes that ranks equally with or senior to the relevant subclass
    of notes in the priority of payments. In respect of the class A notes,
    principal adjustment amount payments have been excluded as they are a
    function of aircraft values. Actual Debt Coverage Ratios have not been
    provided for the class A, B, C and D notes as minimum principal amounts on
    the class A and B notes have not been paid in full and no scheduled
    principal amounts have been paid on the class C and D notes in the period
    since March 2001. 2001 Base Case Debt Coverage Ratios have not been provided
    for the class C and D notes as no principal payments were assumed.

[3] "ADJUSTED PORTFOLIO VALUE" represents the base value of each aircraft in the
    portfolio as determined by the most recent appraisal multiplied by the
    depreciation factor at payment date divided by the depreciation factor as of
    the relevant appraisal date.

[4] "TOTAL ASSET VALUE" is equal to total expected/adjusted portfolio value plus
    liquidity reserve amount minus lessee security deposits.

                                        69
<PAGE>

THE ACCOUNTS

     The indentures and the security trust agreement provide that substantially
all of Airplanes Group's cash inflows and outflows occur through the rental
accounts, collection account, lessee funded account and expense account which
the cash manager, acting on behalf of the security trustee, has established and
maintains at a bank having:

     -  a long-term unsecured debt rating of not less than AA, or the
        equivalent, by the rating agencies, or

     -  a certificate of deposit rating of A-1+ by Standard & Poor's, P-1 by
        Moody's and F1 by Fitch,

except that, where required by the terms of the relevant leases, some rental
accounts may be established at banks having ratings of less than AA, or the
equivalent, by the rating agencies or a certificate of deposit rating of less
than A-1+ by Standard & Poor's, P-1 by Moody's and F1 by Fitch.

     Except where local legal or regulatory reasons do not permit, all of these
accounts are held in the names of the security trustee, who has sole dominion
and control over the accounts, including the sole power to direct withdrawals
from or transfers among the accounts. Subject to conditions set forth in the
cash management agreement, the security trustee has delegated its authority over
the accounts to the cash manager but the security trustee is not responsible for
the acts or omissions of the cash manager.

     For so long as any notes remain outstanding, funds on deposit in the
accounts will be invested and reinvested at Airplanes Group's written direction
(which direction has been delegated to the cash manager pursuant to the cash
management agreement) in one or more permitted account investments, maturing, in
the case of the collection account and expense account, such that sufficient
funds shall be available to make required payments on the first succeeding
scheduled interest payment date on the notes after those investments are made.
Investment and reinvestment of funds in the lessee funded account must be made
in a manner and with maturities that conform to the requirements of the related
leases. Investment earnings on funds deposited in any account, net of losses and
investment expenses, will (to the extent permitted by the terms of the related
leases in the case of funds in the lessee funded account) be deposited in the
collection account and treated as collections.

RENTAL ACCOUNTS

     The lessees make all payments under the leases directly into the applicable
rental accounts. Pursuant to the cash management agreement, the cash manager
transfers, or causes to be transferred, all funds deposited into the rental
accounts into the collection account as collections within one business day of
receipt thereof (other than certain limited amounts, if any, required to be left
on deposit for local legal or regulatory reasons).

THE COLLECTION ACCOUNT

     All of the following "COLLECTIONS" received by Airplanes Group have to be
deposited in the collection account:

     -  rental payments,

     -  payments under any letter of credit, letter of comfort, letter of
        guarantee or other assurance in respect of a lessee's obligations under
        a lease,

     -  the liquidity reserve amount,

     -  amounts received in respect of claims for damages or in respect of any
        breach of contract for any nonpayment (including any amounts received
        from any Airplanes Group subsidiary, whether by way of distribution,
        dividend, repayment of a loan or otherwise and any proceeds received in
        connection with a lessee's restructuring),

     -  net proceeds of any aircraft sale or amounts received under purchase
        options and other agreements,

     -  proceeds of any insurance payments in respect of any aircraft or any
        indemnification proceeds,

     -  amounts transferred from the lessee funded account to the collection
        account,
                                        70
<PAGE>

     -  net payments to Airplanes Group under any swap agreement,

     -  investment income on all amounts on deposit in the accounts (in each
        case to the extent consistent with the terms of applicable related
        leases), and

     -  any other amounts received by any member of Airplanes Group, except
        specified funds required to be segregated from Airplanes Group's other
        funds, applied in connection with a redemption, received in connection
        with a refinancing issue of notes and required to be paid over to any
        third party.

     Collections on deposit in the collection account are calculated by the cash
manager on the fourth business day immediately preceding each interest payment
date. On each payment date, the cash manager will transfer from the collection
account to the expense account the portion of Airplanes Group expenses that are
due and payable or are anticipated to become due and payable over the next
interest accrual period on the notes (the "REQUIRED EXPENSE AMOUNT") and that
have not been paid directly by the cash manager to expense payees. The cash
manager may also transfer other amounts into the expense account for
unanticipated expenses falling due and payable within that interest accrual
period. If there are available funds in accordance with "-- The Notes and
Guarantees -- Priority of Payments" on any payment date, the cash manager will
also transfer amounts in respect of expenses and costs that are not regular,
monthly recurring expenses but are anticipated to become due and payable in any
future interest accrual period ("PERMITTED ACCRUALS") to the expense account.
Amounts received in respect of segregated security deposits and maintenance
reserves are transferred directly into the lessee funded account.

LIQUIDITY RESERVE AMOUNT

     To the extent of available cashflows, Airplanes Group is required to
maintain a cash balance in the collection account under the indentures in an
amount equal to the sum of:

     -  the maintenance reserve amount ($60 million for purposes of the "First
        Collection Account Top-up" plus an additional $20 million for purposes
        of the "Second Collection Account Top-up" as of March 15, 2004, as
        further described below), and

     -  a security deposit reserve amount (equal to approximately $29.6 million
        as of March 15, 2004).

     The indentures permit the required maintenance reserve amount to be
increased or decreased from time to time by an action of the board of directors
of Airplanes Limited and the controlling trustees of Airplanes Trust in light of
significant changes in, among other things, the condition of the aircraft, the
terms and conditions of future leases, the financial condition of the lessees or
prevailing industry conditions. Any proposed reduction by the board of directors
or the controlling trustees is subject to confirmation in advance in writing
from the rating agencies that the proposed reduction in the liquidity reserve
amount will not result in a lowering or withdrawal of their ratings of any class
of certificates.

     On March 8, 2001, the board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust approved a reduction of the maintenance
reserve amount required to be retained by Airplanes Group in the collection
account from $80 million to $60 million as of March 15, 2001 for purposes of the
"First Collection Account Top-up" (but not for the "Second Collection Account
Top-up") according to the priority of payments provided in the indentures.

     The reduction of the maintenance reserve amount for purposes of the "First
Collection Account Top-up" allowed an additional amount of up to $20 million to
be applied, if required, to pay the minimum hedge payments, class A minimum
principal, class B interest, class B minimum principal, class C interest and
class D interest on any payment date after March 15, 2001. This additional $20
million amount, however, was still required to be retained by Airplanes Group in
the collection account for purposes of the "Second Collection Account Top-up" if
we had sufficient cashflows. This reduction of the maintenance reserve amount
did not cause the rating agencies to lower or withdraw the ratings of any class
or subclass of certificates.

     If funds on deposit in the collection account are insufficient to satisfy
the liquidity reserve amount at any time, as has been the case since December
15, 2003, we may continue to make all payments, including required payments on
the notes and the guarantees, which rank prior to or equally with payments of
accrued but unpaid
                                        71
<PAGE>

interest on the class D notes and any permitted accruals so long as the balance
of funds in the collection account does not fall below the amount required to be
retained for the purpose of the "First Collection Account Top-up" in the
priority of payments (currently $60 million). If the balance of funds in the
collection account falls below the amount required to be retained for the
purpose of the "First Collection Account Top-up" in the priority of payments, we
may continue to make all payments, including required payments on the notes and
the guarantees, of (a) all accrued but unpaid interest and, on the final
maturity date, principal of the class or subclass of the most senior class of
notes then outstanding to avoid a note event of default and (b) payments under
our swap agreements.

THE LESSEE FUNDED ACCOUNT

     Some leases require that certain lessee security deposits and supplemental
rent payments to provide for maintenance reserves be segregated from other
Airplanes Group funds. These security deposits and maintenance reserves are held
in the "LESSEE FUNDED ACCOUNT" and are accounted for (and, if required by any
lease, segregated) on a per lease basis.

     Funds on deposit in the lessee funded account are used to make specified
maintenance payments, security deposit repayments and other specified or
permitted payments and will not be used to make payments in respect of the notes
or the certificates at any time, including after a note event of default. In
some circumstances where lessees relinquish their rights to receive certain
maintenance and security deposit payments upon the expiration of a lease,
surplus funds may be transferred from the lessee funded account to the
collection account.

THE EXPENSE ACCOUNT

     On each payment date, the cash manager withdraws the required expense
amount from the collection account to pay the expenses. To the extent that the
required expense amount has not been paid directly to expense payees, it is
deposited into the expense account. Further withdrawals of cash from the
collection account by the cash manager to satisfy expenses due and payable prior
to the next payment date that were not previously anticipated are also deposited
in the expense account. If funds on deposit in the collection account are less
than the required expense amount on any payment date, we will be unable to pay
the required expense amount in full, which may lead to a default under our
various service agreements or other contracts under which the expenses arise.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

INTEREST RATE SENSITIVITY

     Airplanes Group's principal market risk exposure is to changes in interest
rates. This exposure arises from the notes (as illustrated in the table above at
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Indebtedness") and the derivative instruments used by Airplanes
Group to manage interest rate risk.

INTEREST RATE RISK AND MANAGEMENT

     The leasing revenues of Airplanes Group are generated primarily from lease
rental payments which are based on either a fixed or floating rate, or a
combination of the two. In the case of floating rate leases, an element of the
rental varies in line with changes in LIBOR, generally six-month LIBOR. See
"Item 1. Business -- The Aircraft, Related Leases and Collateral -- The Leases"
for more information regarding the terms of our leases. As of March 31, 2004,
leases representing approximately 98% of our portfolio by appraised value as of
January 31, 2004 provided for fixed rate rental payments and approximately 2%
provided for floating rate payments.

     In general, an interest rate exposure arises to the extent that Airplanes
Group's fixed and floating interest obligations in respect of the class A, B, C
and D notes and certificates do not correlate to the mix of fixed and floating
rental receipts for different rental periods. This interest rate exposure can be
managed through the use of interest rate swaps and other derivative instruments.
The class A and class B notes and certificates bear floating
                                        72
<PAGE>

rates of interest and the class C and class D notes and certificates bear fixed
rates of interest. The mix of fixed and floating rental receipts contains a
higher percentage of fixed rate receipts than the percentage of fixed rate
interest payments on the notes and certificates and the reset periods on
floating rental receipts are generally longer than the monthly reset periods on
the floating rate notes. Before November 17, 2003 we entered into interest rate
swaps in order to correlate the contracted fixed and floating rental receipts to
the fixed and floating interest payments on the notes and certificates. Since
November 17, 2003, however, we have ceased paying interest on our class B, C and
D notes and certificates.

     We have therefore reviewed and modified our hedging policy with the
approval of the rating agencies and no longer enter into hedges of the class B
notes and certificates. We believe it prudent to continue to hedge our interest
rate exposure in respect of the class A notes and certificates as the mix of
fixed and floating rental receipts does not correlate to the floating payments
due on the class A notes and certificates. Our cashflows have been insufficient
to enable any funds to be allocated to the "Second Collection Account Top-up" in
the priority of payments since December 15, 2003. We have therefore not included
this cash balance in our hedging calculations since the end of 2003.

     Under the swaps, Airplanes Group pays fixed amounts and receives floating
amounts on a monthly basis. The swaps amortize having regard to a number of
factors, including the expected pay down schedule of the class A notes, the
expiry dates of the leases under which lessees are contracted to make fixed rate
rental payments and the LIBOR reset dates under the floating rate leases. At
least every three months, and in practice more frequently, the administrative
agent seeks to enter into additional swaps or sell at market value or unwind
part or all of the swaps and any future swaps in order to rebalance the floating
interest obligations and the fixed and floating mix of rental receipts.

     As of March 31, 2004, Airplanes Group had unamortized swaps with an
aggregate notional principal balance of $1,370 million. The aggregate notional
principal balance of these swaps reduce by their terms to an aggregate notional
principal balance of $850 million by March 31, 2005, to an aggregate notional
principal balance of $495 million by March 31, 2006, to an aggregate notional
principal balance of $275 million by March 31, 2007 and to an aggregate notional
principal balance of $90 million by March 31, 2008. None of the swaps has a
maturity date extending beyond April 2008. The aggregate fair market value of
the portfolio of 34 swaps as of March 31, 2004 was estimated at $(52) million
(that is, the swaps were "out-of-the-money," meaning that if the swaps were sold
then, a loss of $52 million would result) as detailed below:

                  AIRPLANES GROUP SWAP BOOK AT MARCH 31, 2004

<Table>
<Caption>
                                                                                                 ESTIMATED FAIR
                                                               FINAL MATURITY    FIXED RATE    MARKET VALUE AS OF
SWAP NUMBER            NOTIONAL AMOUNT(1)    EFFECTIVE DATE         DATE         PAYABLE(2)      MARCH 31, 2004
-----------            ------------------    --------------    --------------    ----------    ------------------
                         (IN MILLIONS)                                                           (IN THOUSANDS)
<S>                    <C>                   <C>               <C>               <C>           <C>
1....................            10            18-Aug-00         15-Apr-04        6.7700%                (49)
2....................            10            15-Nov-01         15-Apr-04        4.8900%                (33)
3....................            20            30-Apr-02         15-Apr-04        3.3700%                (39)
4....................            10            15-Aug-02         15-Apr-04        2.1600%                 (9)
5....................            25            17-Apr-01         15-May-04        6.8290%               (149)
6....................            20            12-Oct-00         15-Jul-04        6.5850%               (237)
7....................            65            17-Jun-02         15-Jul-04        3.7700%               (588)
8....................           200            17-Feb-04         15-Jul-04        1.2000%                (55)
9....................            35            17-Sep-01         15-Sep-04        5.7125%               (819)
10...................            30            17-Jun-02         15-Oct-04        3.5800%               (434)
11...................            25            15-Jul-03         15-Nov-04        5.7650%               (778)
12...................            15            15-Apr-02         15-Dec-04        5.3975%               (586)
13...................            25            15-Apr-03         15-Dec-04        4.2350%               (531)
14...................            45            15-May-01         15-Jan-05        4.7950%             (1,180)
15...................            50            21-Aug-01         15-Feb-05        4.4195%             (1,725)
16...................             0(3)         15-Oct-04         17-Oct-05        4.5650%               (385)
</Table>

                                        73
<PAGE>

<Table>
<Caption>
                                                                                                 ESTIMATED FAIR
                                                               FINAL MATURITY    FIXED RATE    MARKET VALUE AS OF
SWAP NUMBER            NOTIONAL AMOUNT(1)    EFFECTIVE DATE         DATE         PAYABLE(2)      MARCH 31, 2004
-----------            ------------------    --------------    --------------    ----------    ------------------
                         (IN MILLIONS)                                                           (IN THOUSANDS)
<S>                    <C>                   <C>               <C>               <C>           <C>
17...................            45            17-Oct-01         15-Nov-05        3.9475%             (1,051)
18...................            95            24-Jul-01         15-Dec-05        5.2850%             (5,219)
19...................             0(3)         15-Jul-04         15-Dec-05        2.4475%               (809)
20...................            30            17-Nov-03         17-Jan-06        5.1150%             (1,216)
21...................           200            20-Dec-01         15-Feb-06        4.6350%             (5,496)
22...................            20            15-May-03         15-Mar-06        2.8800%               (289)
23...................            25            30-Jan-02         15-Apr-06        3.5040%               (936)
24...................            90            15-Mar-02         15-Apr-06        4.0125%             (2,071)
25...................            30            15-Dec-03         18-Apr-06        2.9425%               (445)
26...................           100            15-Aug-02         15-Jul-06        5.5500%             (9,215)
27...................             0(3)         17-Oct-05         15-Oct-06        4.9400%               (205)
28...................             0(3)         15-Jul-04         15-May-07        5.8620%             (8,059)
29...................            20            15-Mar-04         15-May-07        5.2020%             (3,863)
30...................            60            15-Apr-03         15-May-07        3.5350%             (1,921)
31...................            70            17-Mar-03         17-Sep-07        3.8700%             (3,695)
32...................             0(3)         15-May-07         15-Nov-07        4.8000%               (269)
33...................             0(3)         17-Sep-07         17-Dec-07        4.9440%               (164)
34...................             0(3)         15-Jul-05         15-Apr-08        3.4800%                 41
                             ------                                                                 --------
                              1,370                                                                  (52,479)
                             ======                                                                 ========
</Table>

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

(1)  While some of the above swaps have a fixed notional amount, many amortize
     over the period to the final maturity date.

(2)  Under all swaps, Airplanes Group receives floating rate payments at one
     month LIBOR, reset monthly on an actual/360 adjusted basis.

(3)  The initial amounts for swaps number 16, 19, 27, 28, 32, 33 and 34 are $15
     million, $60 million, $10 million, $65 million, $95 million, $75 million
     and $45 million respectively.

     Additional interest rate exposure will arise to the extent that lessees
owing fixed rate rental payments default and interest rates have declined
between the contract date of the lease and the date of default. This exposure
can be managed through the purchase of swaptions. If Airplanes Group purchases
swaptions, these, if exercised, will allow Airplanes Group to enter into
interest rate swap transactions under which it would pay floating amounts and
receive fixed amounts. These swaptions could be exercised in the event of
defaults by lessees owing fixed rate rental payments in circumstances where
interest rates had declined since the contract date of such leases. Following
consultation with the rating agencies in the year ended March 31, 2002, it is
not currently proposed to purchase any swaptions due primarily to the low
interest rate environment and our current cashflow performance.

     If we are required by the rating agencies to purchase swaptions, the
premium would be payable at two points in the priority of payments under the
indentures. Fifty percent of any swaption premium in any month is a "minimum
hedge payment" and would be payable fourth in Airplanes Group's order of
priority of payments (ahead of class A minimum principal amount). The other 50%
of the premium is expended as a "supplemental hedge payment" and would be
payable seventeenth in Airplanes Group's order of priority of payments but given
our current cashflow performance it is highly unlikely we would ever be able to
make such payment.

     Through the use of swaps Airplanes Group seeks to manage its exposure to
adverse changes in interest rates based on regular reviews of its interest rate
risk. There can be no assurance, however, that Airplanes Group's interest rate
risk management strategies will be effective in this regard.

     Our indentures required that any counterparty with whom we enter into a
swap have at least a short-term unsecured debt rating of A-1+ from Standard &
Poor's and a long-term unsecured debt rating of A1 from Moody's. It was proving
increasingly difficult to find counterparties meeting these requirements and
therefore, as further described under "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of
                                        74
<PAGE>

Operations -- Recent Developments", the board of directors of Airplanes Limited
and the controlling trustees of Airplanes Trust resolved to undertake a consent
solicitation seeking, among other things, to amend the indentures so as to
reduce the required rating for a swap counterparty to a short-term unsecured
debt rating of at least A-1 from Standard & Poor's and a long-term unsecured
debt rating of at least A2 from Moody's or otherwise as approved by the Board
with the prior agreement of the rating agencies. The consent solicitation was
successful and the indentures accordingly amended in September 2003. We believe
that the amendment to the indentures should help us to identify eligible
counterparties to enter into interest rate swaps to hedge our interest rate
exposure in respect of the class A notes and certificates. However, because of
our financial condition, we may nevertheless be unable to find counterparties
willing to enter into swaps with us, and/or it may become more expensive for us
to enter into swaps with eligible counterparties.

     The directors of Airplanes Limited and the controlling trustees of
Airplanes Trust are responsible for reviewing and approving the overall interest
rate management policies and transaction authority limits. Specific hedging
contracts are approved by officers of the administrative agent acting within the
overall policies and limits. Counterparty risk is monitored on an ongoing basis.
Counterparties are subject to the prior approval of the directors of Airplanes
Limited and the controlling trustees of Airplanes Trust. Airplanes Group's
counterparties consist of the affiliates of major U.S. and European financial
institutions who have credit ratings, or provide collateralization arrangements,
which are consistent with maintaining the ratings of the class A certificates.

     On April 1, 2001 we adopted Statement of Financial Accounting Standards
(SFAS) 133, "Accounting for Derivative Instruments and Certain Hedging
Activities" and SFAS 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an amendment of SFAS 133." As a result, all
derivatives are now recognized on the balance sheet at their fair value. All
derivatives are designated as either a hedge of the fair value of a recognized
asset or liability or of an unrecognized firm commitment ("fair value" hedge), a
hedge of a forecasted transaction or of the variability of cashflows to be
received or paid related to a recognized asset or liability ("cashflow" hedge),
a foreign-currency fair-value or cash-flow hedge ("foreign currency" hedge) or a
"held for trading" instrument.

     As noted above, we have a detailed hedging policy, which has been approved
by the board of directors of Airplanes Limited and controlling trustees of
Airplanes Trust and the rating agencies. As part of this hedging policy we have
formally documented all relationships between hedging instruments and hedged
items as well as our risk-management objective and strategy for undertaking
various hedge transactions.

     This process includes linking all derivatives that are designated as
cashflow hedges to specific liabilities on the balance sheet. We formally
assess, both at the hedge's inception and on an ongoing basis, whether the
derivatives that are used in hedging transactions are highly effective in
offsetting changes in cashflows of hedged items.

     Changes in the fair value of a derivative that is highly effective and that
is designated and qualifies as a cashflow hedge are included in the item "Net
change in cashflow hedges" in "other comprehensive income" (OCI), until earnings
are affected by the variability in cashflows of the designated hedged item.

     Hedge accounting is discontinued prospectively when it is determined that
the derivative is no longer highly effective in offsetting changes in the
cashflows of the hedged item, the derivative expires or is sold, terminated, or
exercised, or it is determined that designation of the derivative as a hedging
instrument is no longer appropriate. In all situations in which hedge accounting
is discontinued, the derivative will continue to be carried at its fair value on
the balance sheet, and any changes in its fair value will be recognized in
earnings. In all situations where derivatives are designated as trading
instruments, they are carried at fair value on the balance sheet and any changes
in fair value are recognized in earnings.

     The opening effect as at April 1, 2001 of the adoption of SFAS 133 was
$(38) million in other comprehensive income (i.e. if the swaps were sold then, a
loss of $38 million would have resulted) and $5 million in earnings (being the
deferred gain on early termination of interest and related derivatives). The net
change in the value of cashflow hedges for the year ended March 31, 2004 was an
increase of $27 million.

                                        75
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The response to this item is submitted as a separate section of this
report. See "Item 15. Exhibits, Financial Statement Schedules and Reports on
Form 8-K."

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

ITEM 9A.  CONTROLS AND PROCEDURES

(A)  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     The Chairman of the Board of Directors of Airplanes Limited and Chairman of
the Controlling Trustees of Airplanes Trust, acting on the recommendation of the
Board of Directors of Airplanes Limited and the Controlling Trustees of
Airplanes Trust, after evaluating the effectiveness of Airplanes Group's
"disclosure controls and procedures" (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this Annual Report, has
concluded that our disclosure controls and procedures were effective based on
their evaluation of these controls and procedures required by paragraph (b) of
Exchange Act Rules 13a-15 or 15d-15.

     Airplanes Group's disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objectives, and the Board of
Directors of Airplanes Limited and the Controlling Trustees of Airplanes Trust
have concluded that these controls and procedures are effective at the
"reasonable assurance" level. However, Airplanes Group believes that a control
system, no matter how well designed or operated, cannot provide absolute
assurance that the objectives of the control system are met, and that no
evaluation of controls can provide absolute assurance that various types of
corporate operational risks within a company particularly one such as this that
relies exclusively on third parties for all services, will be detected in a
timely manner.

(B)  CHANGES IN INTERNAL CONTROLS

     There were no changes in the internal controls of Airplanes Group over
financial reporting identified in connection with the evaluation required by
paragraph (d) of Exchange Act Rules 13a-15(e) or 15(d)-15(e) that occurred
during our last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

                                        76
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

DIRECTORS AND CONTROLLING TRUSTEES

     The Directors and the Controlling Trustees of Airplanes Limited and
Airplanes Trust, respectively, their respective ages and principal activities
are as follows:

<Table>
<Caption>
                                                               OFFICES HELD
                                      --------------------------------------------------------------
NAME                             AGE        AIRPLANES LIMITED                AIRPLANES TRUST
----                             ---  ------------------------------  ------------------------------
<S>                              <C>  <C>                             <C>

Richard E. Cavanagh............  57   Independent director            Independent controlling
                                                                      trustee

Roy M. Dantzic.................  59   Independent director            Independent controlling
                                                                      trustee

Hugh R. Jenkins................  70   Independent director            Independent controlling
                                                                      trustee

William M. McCann..............  60   Chairman and independent        Chairman and independent
                                      director                        controlling trustee

Brian T. Hayden................  56   Class E note director           Class E note controlling
                                                                      trustee
</Table>

     Richard Cavanagh is the President and Chief Executive Officer of The
Conference Board, Inc., a global business research and membership enterprise
based in New York City. Before taking up his current position in 1995, he served
for eight years as Executive Dean of the Kennedy School of Government at Harvard
University. Before that, he was a partner at McKinsey & Company, Inc., an
international management consulting firm. During his 17 years with McKinsey, he
took a two-year public service leave and held senior positions in The White
House Office of Management & Budget. He co-authored the management book The
Winning Performance. Mr. Cavanagh also serves as a director of Aircraft Finance
Trust (another aircraft securitization vehicle), the BlackRock Mutual Fund
family, Arch Chemicals (formerly Olin), The Fremont Group (formerly Bechtel
Investments) and The Guardian Life Insurance Company.

     Roy Dantzic is Chairman of Development Securities plc and a non-executive
director of a number of other companies. He qualified as a chartered accountant
in 1968 having started his career with Coopers & Lybrand. Between 1970 and 1980,
he engaged in corporate advisory work, principally as a director of Samuel
Montagu. In 1980, Mr. Dantzic was appointed by the British Government as the
finance director of British National Oil Corporation and he served in this
capacity until 1984. Between 1985 and 1989, he was a director of the corporate
broking division of Wood McKenzie. In 1989 he joined the board of directors of
Stanhope Properties and became its finance director from 1992 until the company
was acquired in 1995. Thereafter he served as managing director of Second Site
Property Holdings Ltd. until 2003.

     Hugh Jenkins has spent over 20 years in senior investment management
positions. He served as Director-General of Investments for the pension plans of
the National Coal Board from 1973-1985, a director of Heron International, N.V.
from 1985-1986, Group Investment director of Allied Dunbar Insurance Plc from
1986-1989, and an executive director of the Prudential Corporation plc and
Chairman/Chief Executive of its investment management subsidiary from 1989 to
December 1995. Thereafter he was Chairman of Development Securities plc
(1998-2003) and a non-executive director of Rank Group plc (1996-2002), Johnson
Matthey plc (1995-2003) and Gartmore European Investment Trust plc (1995-2004).

     William McCann, a chartered accountant, was the Managing Partner of Craig
Gardner/Price Waterhouse in the Republic of Ireland from 1987 to 1995. From 1991
to 1995 he was a member of the Price Waterhouse World Board. He was a director
of the Central Bank of Ireland from 1993 to 1998. Mr. McCann was a member of the
Electricity Supply Board, Ireland from 1986 to 2001 and Chairman from 1996 to
2001. Mr. McCann is currently Deputy Chairperson of the Irish Takeover Panel. He
is also a director of Canada Life Assurance (Ireland) Limited and Readymix plc
and is Chairman or a director of a number of other companies. He is a Board
Member of the University College Dublin Graduate School of Business.

                                        77
<PAGE>

     Brian Hayden qualified as a mechanical engineer in 1970 and started his
career with Aer Lingus. He worked in various management positions within Aer
Lingus during the next 19 years. In 1989, he moved to GPA Group (now known as
debis AirFinance Ireland) to head the technical division as Senior Vice
President -- Technical. In 1993, he joined GECAS and is presently an Executive
Vice President with responsibility for technical management of the GECAS-owned
and managed fleet. He is a director of GECAS and a former director of Irish
Helicopters.

     Mr. Cavanagh has tendered his resignation as a Director and Controlling
Trustee of Airplanes Limited and Airplanes Trust, respectively, and as a
director of AeroUSA and AeroUSA 3, such resignation to take effect on July 1,
2004. The board of directors of Airplanes Limited and the controlling trustees
of Airplanes Trust have appointed Mr. Joseph E. Francht, Jr. as a Director and
Controlling Trustee with effect from the same date.

     Joseph E. Francht, Jr. has been a private investor and consultant since
1998. Mr. Francht also serves as a controlling trustee and as chairman of the
audit committee of Lease Investment Flight Trust (another aircraft
securitization vehicle). He was Senior Vice President-Finance and Treasurer at
Northwest Airlines from 1990 to 1998, where he was responsible for, among other
things, all capital markets transactions, aircraft financing activities and
fleet planning and analysis. He has also served as chairman of Northwest's
Pension Investment Committee and was on the Board of Directors of Champion Air,
Inc. and Northwest Aerospace Training Corporation. Prior to that, from 1972 to
1990, Mr. Francht was employed as a corporate lending officer at Chase Manhattan
Bank, now JP Morgan Chase, and later, at Banque Paribas, now BNP Paribas, in
several senior lending positions, including Senior Vice President-Leveraged
Capital Group.

     Neither Airplanes Limited nor Airplanes Trust has any employees or
executive management. The board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust rely on the servicer, the administrative
agent, the cash manager and the other service providers for all servicing,
executive and administrative functions. See "Item 1. Business -- Risk Factors --
Risks Relating to Airplanes Group and Third Parties" for a description of the
risks involved in relying on service providers to operate our business. The
directors and controlling trustees of Airplanes Limited and Airplanes Trust, as
well as other individuals, serve as directors of various of our subsidiaries.

THE SERVICER

     GECAS provides various aircraft-related services to us as servicer under
the servicing agreement. On November 20, 1998, GECAS' affiliate, GE Capital,
acquired the class E notes previously held by GPA Group (now known as debis
AirFinance Ireland) and its subsidiaries. As the holder of the majority of the
class E notes, GE Capital has the right to appoint one director to the board of
Airplanes Limited and one controlling trustee of Airplanes Trust. GECAS also
holds 5% of the ordinary share capital of Airplanes Holdings, and its affiliate,
GE Capital, has an option to acquire the residual interest in Airplanes Trust
from debis AirFinance, Inc.

     GECAS is a global commercial aviation financial services company that
offers a broad range of aircraft financial products and provides management,
marketing and technical support services to airlines, aircraft owners, lenders
and investors and various of its affiliates, including the GE Group, and other
third parties, including Aircraft Finance Trust, Lease Investment Flight Trust
and Airplanes Group. As of March 31, 2004, GECAS and its affiliates managed a
portfolio consisting of 1,565 aircraft on lease to more than 192 lessees in 66
countries throughout the world. As of March 31, 2004, GECAS has also committed
to purchase a total of 448 new aircraft from manufacturers, deliverable through
June 2010.

     GECAS and its affiliates offer such financial products as finance leases
(including both direct financing and leveraged leases), operating leases and
other structured finance products (including aircraft securitization vehicles).
Its management services include collecting rental payments, arranging and
monitoring aircraft maintenance performed by others, limited technical
inspection of aircraft, arranging and monitoring insurance, arranging for
aircraft valuations, registration and de-registration, monitoring compliance
with leases, enforcement of lease provisions against lessees, confirming
compliance with applicable ADs and facilitating delivery and redelivery of
aircraft. GECAS also arrange sales of aircraft to third parties. GECAS, its
affiliate, GE Capital, or any of its other affiliates may acquire debt or
beneficial interests in other securitization vehicles that own a portfolio of
aircraft assets.
                                        78
<PAGE>

     GECAS is headquartered in Shannon, Ireland where it had 92 employees as of
March 31, 2004. The Aviation Services business of GE, which includes GECAS, has
a further 229 employees worldwide and has operations in Stamford, Connecticut;
Shannon, Ireland; Miami, Florida and a number of other locations.

     The table below sets forth the different aircraft comprising the GECAS and
its affiliates managed portfolio as of March 31, 2004 by manufacturer and by
whether the aircraft are owned and managed by affiliates of GE Capital or
managed for third parties or Airplanes Group.

<Table>
<Caption>
                                                 GE CAPITAL     OTHER MANAGED      AIRPLANES
AIRCRAFT TYPE AND CLASS                            FLEET       THIRD PARTIES(1)      GROUP      TOTAL
-----------------------                          ----------    ----------------    ---------    -----
<S>                                              <C>           <C>                 <C>          <C>
Airbus
  A300.........................................       14              --                2          16
  A310.........................................        6               1               --           7
  A319.........................................       98              --               --          98
  A320.........................................      125              11               12         148
  A321.........................................       10              --               --          10
  A330.........................................       16              --               --          16
Boeing
  B727.........................................        6              --               --           6
  B737-200.....................................       36              --               13          49
  B737-300/400/500.............................      252(2)           31               43         326
  B737-600/700/800.............................      178               5               --         183
  B737-900.....................................        4              --               --           4
  B747.........................................       29               1                1          31
  B757-200.....................................       33              --                3          36
  B767-200.....................................        2              --               --           2
  B767-200ER...................................        9               2                1          12
  B767-300ER...................................       36              15                4          55
  B767-300F....................................        1              --               --           1
  B777-200.....................................       12              --               --          12
McDonnell Douglas
  DC8..........................................       --              --               18          18
  DC9..........................................       --              10                5          15
  DC10.........................................        6              --               --           6
  MD-11........................................        6               1                3          10
  MD-81........................................       --              10               --          10
  MD-82........................................       28              24                2          54
  MD-83........................................       16               5               23          44
  MD-87........................................       --               5                1           6
  MD-88........................................       12              --               --          12
Fokker
  F-100........................................       10              --               16          26
Other Jets.....................................      305              --               --         305
Turboprops.....................................       22              --               25          47
                                                   -----             ---              ---       -----
  Total........................................    1,272             121              172       1,565
                                                   =====             ===              ===       =====
Body Type:
  Widebody.....................................      138              20               11         169
  Narrowbody...................................    1,134             101              161       1,396
Stage Compliance(3):
  Stage 2......................................       13              --               16          29
  Stage 3......................................    1,259             121              156       1,536
</Table>

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

(1)  The third parties include Lease Investment Flight Trust and Aircraft
     Finance Trust. Certain aircraft included in the Other Managed Third Parties
     fleet are owned by joint ventures or pursuant to other arrangements in
     which unaffiliated parties have interests.

                                        79
<PAGE>

(2)  For purposes of this table, seven B737 aircraft which GE Capital leases to
     debis AirFinance Ireland and which are subleased to the operating lessee,
     have been included in the GE Capital fleet.

(3)  Turboprop and Stage 3 hushkitted aircraft have been classified as Stage 3
     compliant.

THE SERVICING AGREEMENT

     GECAS provides services with respect to all of the aircraft in our
portfolio pursuant to the servicing agreement. The servicing agreement provides
that the servicer will act in accordance with applicable law and with our
directions in performing the aircraft services described below. In addition, the
servicer has agreed to perform its services in accordance with the following
"GECAS SERVICES STANDARD" and "GECAS CONFLICTS STANDARD":

     -  GECAS must use reasonable care and diligence at all times in the
        performance of the services.

     -  If a conflict of interest arises regarding GECAS's management, servicing
        or marketing of (a) any two aircraft in our portfolio or (b) any
        aircraft in our portfolio and any other aircraft managed by GECAS, GECAS
        will perform its services in good faith. If the two aircraft or the
        aircraft in our portfolio and the other aircraft managed by GECAS are
        substantially similar in terms of objectively identifiable
        characteristics that are relevant for the particular services to be
        performed, GECAS will not discriminate among the aircraft or between any
        of the aircraft in our portfolio and any other aircraft managed by GECAS
        on an unreasonable basis. GECAS is not obliged to inform us of any
        conflicts of interest.

     The servicer does not have any fiduciary duty or other implied duties to us
or any other person, including any certificateholders, and its obligations will
be limited to the express terms of the servicing agreement. GECAS will not be
liable to us for any of our losses arising out of, in connection with or related
to, GECAS's management of our portfolio, except where those losses are finally
adjudicated to have resulted directly from GECAS's gross negligence or wilful
misconduct. The servicer is not obliged to take any action that it believes is
reasonably likely to violate any applicable law with respect to GECAS or its
affiliates, violate any established written policies of GE related to legal,
ethical and social matters in business practices, or lead to an investigation by
any governmental authority. In addition, the servicer does not assume any
liability or accountability for (a) the terms and conditions of the notes, (b)
the ability of Airplanes Limited or Airplanes Trust to comply with the terms and
conditions of the notes or the guarantees and (c) the structuring or
implementation of any aspect of the various transactions contemplated by this
report.

     Airplanes Limited, Airplanes Trust, Airplanes Holdings and AeroUSA have
agreed to indemnify the servicer and its affiliates on an after-tax basis for
any of its losses arising out of, in connection with or related to its
performance of the services, except where those losses are finally adjudicated
to have resulted directly from GECAS's gross negligence or wilful misconduct in
respect of its obligation to apply the GECAS services standard or GECAS
conflicts standard in respect of its performance of the services.

AIRCRAFT SERVICES

     The main categories of the services that are provided by the servicer are:

     -  lease marketing, including re-marketing, lease negotiation and
        execution;

     -  aircraft management, including lease rent collection, ensuring aircraft
        maintenance, insurance monitoring and procurement, contract compliance
        by, and enforcement against, lessees, and accepting delivery and
        re-delivery of aircraft;

     -  aircraft sales as we direct;

     -  monitoring of maintenance reporting, and provision of records and
        information about the aircraft;

     -  arranging valuations and monitoring regulatory developments;

     -  commercially reasonable assistance in complying with covenants relating
        to the aircraft under the indentures;

     -  assistance in connection with public or private offerings of
        certificates;

                                        80
<PAGE>

     -  legal and other professional services in the ordinary course of the
        operating lease business; and

     -  periodic reporting of operational information relating to the aircraft.

     The servicer has also agreed to give us and our agents access to
information and its personnel for monitoring purposes, and to separate its own
funds from our funds.

OPERATING GUIDELINES

     Under the servicing agreement, GECAS is entitled to exercise the authority
necessary to give it a practicable and working autonomy in performing the
services. Airplanes Holdings, acting on behalf of Airplanes Group through the
administrative agent, has established monitoring and control procedures to
enable the servicer to properly manage our business and assets.

     All transactions the servicer enters into on our behalf must be at arm's
length and on fair market value terms unless we agree otherwise. Some
transactions or matters involving the aircraft require the prior written
approval of Airplanes Holdings. These include:

     -  sales of aircraft unless required by a lease;

     -  entering into any leases, renewals or extensions on terms that do not
        comply with the operating covenants under the indentures;

     -  terminating any lease or leases to any single lessee with respect to
        aircraft having an aggregate depreciated net book value in excess of
        $200 million;

     -  entering into any contract for the modification or maintenance of
        aircraft where the costs to be incurred (a) exceed the greater of (1)
        the estimated aggregate cost of a heavy maintenance check for a similar
        aircraft and (2) available maintenance reserves or other collateral
        under the related lease, or (b) are outside the ordinary course of our
        business;

     -  issuing any guarantee for us, or otherwise pledging our credit, other
        than with respect to trade payables in the ordinary course of business;
        and

     -  any transaction with GE Capital or any of its affiliates not
        contemplated in the servicing agreement.

BUDGET

     Airplanes Holdings adopts an annual budget each year with respect to the
aircraft. The servicer has agreed to use reasonable commercial efforts to
attempt to achieve the budget each year.

SERVICING FEES

     Airplanes Limited, Airplanes Holdings and AeroUSA pay an annual
index-linked fee to the servicer, payable monthly in arrears for the period each
aircraft is under management. For the year to March 31, 2004, this fee was 0.57%
of the agreed book value of each aircraft, payable monthly in arrears for the
period of time that aircraft is under GECAS's management. The servicer is
entitled to additional incentive fees based on annual cashflow generated by
leases in excess of targets and sales of aircraft, with a minimum fee of $1.5
million annually. The servicer is also entitled to additional fees in connection
with the services required to be provided by GECAS in respect of any offerings
and sales by us of certificates. Airplanes Limited, Airplanes Holdings and
AeroUSA also pay expenses incurred or approved by the servicer on our behalf,
including aircraft maintenance costs and insurance, outside professional
advisory fees and other out of pocket expenses, which may be a significant
component of our overhead costs. In the year ended March 31, 2004, aircraft
maintenance reserve expenses were $24.3 million. Other expenses, including
servicer fees, outside professional advisory fees, insurance and other out of
pocket expenses amounted to $36.8 million for the same period.

                                        81
<PAGE>

TERM AND TERMINATION

     The initial term of the servicing agreement expires on the earlier of March
28, 2014 and the payment in full of all amounts outstanding under the notes.
Each party has the right to terminate under specified circumstances. The
servicer has the right to terminate the servicing agreement if any of the
following occur:

     -  Airplanes Limited, Airplanes Trust, Airplanes Holdings and/or AeroUSA
        fail to pay when due any servicing fees or other amounts owed to the
        servicer after appropriate notice;

     -  Airplanes Limited, Airplanes Trust, Airplanes Holdings and/or AeroUSA
        fail to perform or observe or violate in any material respect any
        material term, covenant, condition or agreement under the servicing
        agreement;

     -  any of Airplanes Limited, Airplanes Trust, Airplanes Holdings, AeroUSA
        or their respective subsidiaries or affiliates has made a false or
        misleading representation or warranty in the servicing agreement or any
        related document that is reasonably likely to have a material adverse
        effect on the servicer or on its rights and obligations under the
        servicing agreement;

     -  an involuntary proceeding under applicable bankruptcy, insolvency,
        receivership or similar law against Airplanes Limited, Airplanes Trust,
        Airplanes Holdings, AeroUSA or any of their significant subsidiaries
        continues for 75 days or if any of these entities goes into liquidation
        or suffers a receiver or mortgagee to take possession of all or
        substantially all of our or its assets, or if any of these entities
        commences a voluntary proceeding under bankruptcy, insolvency,
        receivership or similar law or makes a general assignment for the
        benefit of their creditors;

     -  Airplanes Limited, Airplanes Trust, AeroUSA, Airplanes Holdings and
        their respective subsidiaries and affiliates no longer own any aircraft;

     -  the indentures cease to be in full force and effect; or

     -  any guarantee in favor of the servicer by any of Airplanes Limited,
        Airplanes Trust, AeroUSA, Airplanes Holdings and their respective
        subsidiaries and affiliates ceases to be legal, valid and binding.

     Airplanes Holdings, on behalf of itself, AeroUSA and Airplanes Limited, has
the right to terminate the servicing agreement if any of the follow occur:

     -  the servicer ceases to be at least 75% owned, directly or indirectly, by
        GE or GE Capital;

     -  the servicer fails in any material respect to perform any material
        services required by the servicing agreement in accordance with the
        GECAS services standard or the GECAS conflicts standard, and this
        failure has a material adverse effect on Airplanes Group as a whole; or

     -  an involuntary proceeding under bankruptcy, insolvency, receivership or
        similar law against GE, GE Capital or the servicer continues undismissed
        for 75 days or any of those entities goes into liquidation or suffers a
        receiver or mortgagee to take possession of all or substantially all of
        its assets, or if GE, GE Capital or the servicer commences a voluntary
        proceeding under bankruptcy, insolvency, receivership or similar law or
        makes a general assignment for the benefit of its creditors.

     Airplanes Limited, AeroUSA and Airplanes Holdings also have the right to
terminate the servicing agreement upon six months' written notice to the
servicer if:

     -  the servicer fails to perform any of its specified tax related
        undertakings to preserve the Shannon tax benefits as described below;
        and

     -  as a result, we experience a material adverse tax event as defined in
        the servicing agreement.

     The servicer may resign if it determines that directions given, or services
required, would, if carried out:

     -  be unlawful under applicable law;

     -  violate GE policy as written and in effect for GE and its controlled
        subsidiaries at that time;

                                        82
<PAGE>

     -  be likely to lead to an investigation by any governmental authority;

     -  expose the servicer to liabilities for which, in the servicer's good
        faith opinion, it is not adequately indemnified; or

     -  place the servicer in a conflict of interest so that, in the servicer's
        good faith opinion, it could not continue to perform its obligations
        under the servicing agreement according to its terms.

     Generally, the servicer may only resign, and the parties may only terminate
the servicing agreement, if a replacement servicer has been appointed and the
rating agencies have confirmed that the current ratings of any certificates will
not be lowered or withdrawn.

TAX STATUS

     Because GECAS owns 5% of the outstanding issued ordinary share capital of
Airplanes Holdings and it maintains particular employment levels in Shannon,
Ireland, Airplanes Holdings and its Irish tax-resident subsidiaries enjoy
reduced rates of corporation tax, and improved entitlements to capital
allowances. In addition, these Shannon tax benefits include the right to pay
interest in various circumstances without paying Irish withholding tax, and to
deduct payments of interest in calculating corporate tax liability. While we
expect Airplanes Holdings and our Irish tax resident subsidiaries to continue to
benefit from their status as Shannon certified companies until the scheduled
termination of the preferential tax regime on December 31, 2005, we cannot
guarantee that the management of the aircraft by the servicer will not expose
Airplanes Holdings or the Irish tax resident companies to tax liabilities
outside Ireland. The servicing agreement sets out various tax-related
undertakings of the servicer to maintain a favorable tax treatment in Ireland
for Airplanes Holdings and its Irish tax resident subsidiaries. These include:

     -  maintaining minimum levels of employment in Ireland if required for
        Airplanes Holdings or its Irish tax resident subsidiaries to maintain
        their Shannon licences and tax certification;

     -  holding meetings of the board of directors of the servicer in Shannon at
        least quarterly, and only occasionally outside Shannon;

     -  holding meetings of the servicer's transaction approval committee in
        Shannon at least monthly and only occasionally outside Ireland;

     -  a majority of the committee members must be employees of the servicer;

     -  generally signing aircraft-related contracts in Ireland or outside of
        Ireland pursuant to a limited power of attorney;

     -  compensating any of the servicer's affiliates for services provided
        outside Ireland in respect of the aircraft only to the extent those
        services are provided by express agreement;

     -  ensuring the managing director of the servicer is an officer and
        employee based in Shannon; and

     -  maintaining no offices outside Shannon.

     If the servicer breaches a tax-related undertaking as a result of its gross
negligence or wilful misconduct and we experience a material tax event, our sole
remedy is to terminate the servicing agreement after notice. The servicer has
the right for any good faith commercial reason to modify the tax-related
undertakings, which could lead to a loss of favorable tax treatment for
Airplanes Holdings and its Irish tax resident subsidiaries.

ASSIGNMENT OF SERVICING AGREEMENT

     None of the servicer, Airplanes Limited, Airplanes Holdings or AeroUSA can
assign their rights and obligations under the servicing agreement without the
other parties' consent. However, the servicer may delegate a portion, but not
all, of its duties to GE Capital or GE or any 75% or more owned subsidiary of GE
Capital or GE.

                                        83
<PAGE>

PRIORITY OF PAYMENT OF SERVICING FEES AND REIMBURSABLE EXPENSES

     The fees and expenses of the servicer rank senior in priority of payment to
all payments of interest, principal and any premium on the notes.

     The obligations of Airplanes Limited, Airplanes Holdings and AeroUSA under
the servicing agreement have been guaranteed by each other, Airplanes Trust and
their respective subsidiaries and affiliates.

     GECAS's address is GE Capital Aviation Services Limited, Aviation House,
Shannon, Ireland and its telephone number is +353-61-706500.

THE ADMINISTRATIVE AGENT AND CASH MANAGER

DEBIS AIRFINANCE IRELAND

     Subsidiaries of debis AirFinance Ireland serve as our administrative agent
and cash manager. debis AirFinance Ireland is a wholly-owned indirect subsidiary
of debis AirFinance B.V., a major participant in the global commercial aviation
industry. debis AirFinance B.V., directly and through debis AirFinance Ireland
and other subsidiaries, also owns and manages aircraft, both for its own account
and for third parties, including AerCo, another aircraft securitization vehicle.
At March 31, 2004, debis AirFinance B.V. directly had 91 aircraft in its
portfolio which were on lease to 28 lessees in 22 countries and, through debis
AirFinance Ireland, had 49 aircraft in its portfolio which were on lease to 19
lessees in 14 countries. debis AirFinance Ireland is also the holder of
substantially all of the subclass D-2, E-1 and E-2 notes of AerCo and acts as
servicer for AerCo's portfolio of aircraft. Subsidiaries of debis AirFinance
Ireland also act as administrative agent and cash manager to AerCo. Other
subsidiaries of debis AirFinance Ireland act as administrative agent and cash
manager to GPA-ATR Limited, a turboprop aircraft joint venture company in which
debis AirFinance Jetprop Limited holds 50% of the share capital.

     GPA Group (now known as debis AirFinance Ireland), directly or indirectly
owned all of the aircraft, the aircraft-owning and aircraft-leasing subsidiaries
that we acquired in March 1996. We have taken steps to structure Airplanes Group
and the acquisition from debis AirFinance Ireland in 1996 to ensure that our
assets would not be consolidated with the assets of debis AirFinance Ireland and
would not otherwise become available to their creditors in any bankruptcy or
insolvency proceeding involving debis AirFinance Ireland or any of its
affiliates. See "Item 1. Business -- Risk Factors -- Risks Relating to
Bankruptcy."

     At March 31, 2004, debis AirFinance B.V. employed 113 people worldwide,
with 24 employees in Shannon, Ireland, where debis AirFinance Ireland is
located. debis AirFinance B.V. has its headquarters in Amsterdam, the
Netherlands and also has an office with 10 employees in Fort Lauderdale,
Florida.

ADMINISTRATIVE AGENT

     debis AirFinance Financial Services (Ireland) Limited, as administrative
agent, is responsible for providing administrative and accounting services to
the directors and controlling trustees. Its duties include:

     -  monitoring the performance of the servicer;

     -  liaising with rating agencies;

     -  maintaining accounting ledgers (although we retain responsibility for
        all discretionary decisions and judgments relating to the preparation
        and maintenance of ledgers and accounts, and we retain responsibility
        for, and prepare, our financial statements);

     -  preparing and presenting annual budgets to us for approval;

     -  authorizing payment of various expenses;

     -  coordinating any amendments to the transaction documents other than the
        leases;

     -  supervising outside counsel and coordinating legal advice;

                                        84
<PAGE>

     -  preparing and coordinating reports to investors and the SEC and managing
        investor relations with the assistance of outside counsel and auditors,
        if appropriate;

     -  preparing, or coordinating the preparation of, all required tax returns
        for our approval and filing;

     -  maintaining, or monitoring the maintenance of, our books and records
        that are not maintained by our company secretary or the Delaware
        trustee;

     -  preparing agendas and any required papers for meetings of the governing
        bodies of Airplanes Group entities;

     -  assisting us in (i) developing and implementing our interest rate
        management policy and developing financial models, cashflow projections
        and forecasts, and (ii) making aircraft lease, sale and capital
        investment decisions;

     -  advising us as to the appropriate levels of the liquidity reserve
        amount; and

     -  assisting us in the refinancing of all or a portion of the notes and
        certificates.

     We may also ask the administrative agent to provide additional services. We
paid the administrative agent an annual fee during the year ended March 31,
2004, of $3.60 million, payable monthly in arrears, and an additional annual fee
of approximately $1.28 million, which varies according to the number of aircraft
owned. These fees have been index-linked with effect from April 1, 2003. We
reimburse the administrative agent for expenses incurred on our behalf and
indemnify the administrative agent for any liability it incurs, other than
through its own deceit, fraud, wilful default or gross negligence.

     The administrative agent may resign upon 60 days' written notice in defined
circumstances. We may remove the administrative agent upon 180 days' written
notice with or without cause. However, the resignation or removal of the
administrative agent will not become effective until a successor administrative
agent has been appointed with the consent of the servicer and has accepted
appointment as the successor administrative agent under the administrative
agency agreement.

CASH MANAGER

     debis AirFinance Cash Manager Limited, as cash manager, provides cash
management and related services to us, including establishing and administering
our accounts, providing information about our accounts and investing the funds
held by us in the collection account and the lessee funded account in prescribed
investments ("PERMITTED ACCOUNT INVESTMENTS") on permitted terms. These accounts
(but not the rental accounts) are maintained in the name of the security
trustee. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- The Accounts" for a more detailed
description of our accounts.

     The cash manager calculates monthly payments and makes other calculations
required under the cash management agreement based on data it receives from the
servicer. The cash manager also provides the trustee with the information
required for the monthly reports to the certificateholders. It is the
responsibility of the cash manager to ensure that the proceeds from the lease or
sale of our assets are deposited in the collection account. Upon the occurrence
of a note event of default, the cash manager will distribute funds in the manner
set forth in the indentures.

     We paid the cash manager an annual fee of $0.9 million for the year ended
March 31, 2004, which has been index-linked with effect from April 1, 2003, and
indemnify the cash manager against any loss or liability it incurs, other than
through its own deceit, fraud, willful default or gross negligence, or simple
negligence in the handling of funds.

     The cash manager may resign upon 30 days' written notice so long as a
replacement cash manager has been appointed. We may remove the cash manager at
any time upon 180 days' written notice with or without cause.

                                        85
<PAGE>

COMPANY SECRETARY

     Mourant & Co. Secretaries Limited, as company secretary for Airplanes
Limited, provides secretarial services for, and maintains the books and records,
including minute books and stock transfer records, of Airplanes Limited.

DELAWARE TRUSTEE

     Wilmington Trust Company, as the Delaware Trustee for Airplanes Trust,
maintains the books and records, including minute books and trust certificate
records, of Airplanes Trust.

AUDIT COMMITTEE FINANCIAL EXPERT

     We have no audit committee financial expert as defined in Section 407 of
the Sarbanes-Oxley Act of 2002. Our audit committee members are financially
literate professionals whose qualifications and experience are set forth above
under "Directors and Controlling Trustees" and who collectively have the skills
and experience required to discharge fully the duties of the audit committee.
Our audit committee members are non-executive directors of Airplanes Limited and
non-executive controlling trustees of Airplanes Trust. While we have no
executive management of our own, we have access to independent expert advice
including that of the administrative agent, for all our financial reporting
services. Since Airplanes Group is a liquidating trust whose purpose is to
service the notes and certificates through the leasing, re-leasing and sale of
aircraft, we believe that the primary interest and focus of our certificate
holders lies in our cashflows and our ability to service the certificates.

CODE OF ETHICS

     Each of Airplanes Limited and Airplanes Trust have adopted a code of
ethics. The code is applicable only to the directors of Airplanes Limited and
the controlling trustees of Airplanes Trust, respectively, as Airplanes Limited
and Airplanes Trust are special purpose vehicles that do not employ any
principal executive officer or principal financial officer or other employees.
All members of the board of directors of Airplanes Limited and the controlling
trustees of Airplanes Trust are non-executive. For all executive management
functions Airplanes Limited and Airplanes Trust retain and rely upon third party
service providers, including the servicer, the administrative agent and cash
manager. We have been informed by each of the servicer and the administrative
agent that it is governed by a code of ethics instituted to fulfill its
corporate governance requirements. Copies of the code of ethics for each of
Airplanes Limited and Airplanes Trust are available upon request from Airplanes
Group's administrative agent, debis AirFinance Financial Services (Ireland)
Ltd., debis AirFinance House, Shannon, Ireland.

ITEM 11.  EXECUTIVE COMPENSATION

     All directors of Airplanes Limited and controlling trustees of Airplanes
Trust are compensated for travel and other expenses incurred in the performance
of their duties. Each independent director and independent controlling trustee
is paid an index-linked annual fee, currently $86,127, for their services in
both capacities. The chairman of Airplanes Limited and Airplanes Trust also
receives an additional index-linked annual fee, currently $57,418, for his
services in that capacity. On July 1, 2000, the independent directors and
independent controlling trustees were paid a one-off amount by Airplanes Limited
and Airplanes Trust equal to the amount they would have received had their fees
been index-linked from April 1, 1996, taking account of inflation from April 1,
1996 to April 1, 1999. The fees were adjusted for inflation on April 1, 2002 for
the period to March 31, 2005 by reference to the increase in the US CPI from
April 1, 1999 to March 31, 2002. The aggregate fees paid to the independent
directors and independent controlling trustees by Airplanes Trust and Airplanes
Limited may not exceed $550,000 in any year. In addition, Mr. Dantzic, Mr.
Jenkins and Mr. McCann each receive annual amounts, currently $7,500, $2,500 and
$7,500, respectively, for their services as directors of Airplanes Holdings and
some of its subsidiaries. Mr. Dantzic, Mr. Jenkins and Mr. McCann are also
entitled to receive an additional $1,000 in respect of each board meeting of
these companies which they attend, subject to a maximum payment of $5,000
annually for each of them. Mr. Cavanagh and Mr. Dantzic are also each entitled
to receive an aggregate of $2,500
                                        86
<PAGE>

annually from AeroUSA and AeroUSA 3 for their services as directors of these
companies and are also entitled to receive an additional $1,000 in respect of
each board meeting of these companies which they attend, subject to a maximum
payment of $5,000 annually. The directors and controlling trustees are
reimbursed for travel and other expenses, and premiums for directors' and
officers' insurance are paid on their behalf. Neither the director nor the
controlling trustee appointed by the holder of a majority in aggregate principal
amount of the class E notes receives remuneration from Airplanes Limited or
Airplanes Trust for his services, except reimbursement of travel and other
expenses and payment of premiums for directors' and officers' insurance.

     The directors and the controlling trustees do not receive any additional
cash or non-cash compensation from Airplanes Limited or Airplanes Trust (either
in the form of stock options, stock appreciation rights or pursuant to any
long-term incentive plan, benefit or actuarial plan or any other similar
arrangements of any kind) as salary or bonus for their services as directors or
controlling trustees. None of the directors or controlling trustees currently
has an employment contract with either Airplanes Limited or Airplanes Trust or
serves as a member of a compensation committee of either Airplanes Limited or
Airplanes Trust. The compensation of the directors of Airplanes Limited is set
forth in the Articles of Association of Airplanes Limited and that of the
controlling trustees is set forth in the Airplanes Trust Agreement. None of the
directors or controlling trustees has any beneficial ownership in any of the
equity securities of Airplanes Limited, Airplanes Trust or any of their
subsidiaries.

     None of the directors, controlling trustees or any member of their
families, or any person owning five percent or more of Airplanes Limited's
capital stock, has been party to any transaction, or is party to any currently
proposed transaction, with Airplanes Limited, Airplanes Trust or any of their
subsidiaries. No director or controlling trustee or any member of his family, or
any corporation, organization or trust in which that director or controlling
trustee is an executive officer, partner, trustee or has a beneficial interest,
has been indebted in any amount to Airplanes Limited or Airplanes Trust.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Not applicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Airplanes Group has had and currently maintains various relationships with
GE Capital and GECAS. First, GECAS acts as servicer for Airplanes Group.
Secondly, GECAS is the holder of 5% of the ordinary share capital of Airplanes
Holdings. Thirdly, Mr Hayden, an employee of GECAS, is a director of Airplanes
Limited and a controlling trustee of Airplanes Trust. Fourthly, GE Capital holds
the majority of the Airplanes Group class E notes and has an option over the
residual interest in Airplanes Trust.

     Airplanes Group has had and currently maintains various relationships with
debis AirFinance Ireland plc, formerly known as AerFi Group plc which was
previously known as GPA Group plc. First, debis AirFinance Ireland acted as
promoter in establishing the entities that comprise Airplanes Group. Second,
Airplanes Group purchased substantially all of its assets from debis AirFinance
Ireland . See "Item 1. Business -- Introduction." Third, debis AirFinance
Ireland was the holder of 5% of the ordinary share capital of Airplanes Holdings
until November 20, 1998. Fourth, debis AirFinance, Inc., a subsidiary of debis
AirFinance Ireland, holds the residual interest in Airplanes Trust (subject to
an option granted over such interest in favour of GE Capital as described
above). Fifth, subsidiaries of debis AirFinance Ireland act as the
administrative agent and cash manager for Airplanes Group. See "Item 10.
Directors and Executive Officers of the Registrants -- Corporate Management." In
addition, on November 20, 1998, GE Capital acquired the Airplanes Group class E
notes previously held by debis AirFinance Ireland.

                                        87
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

<Table>
<Caption>
                                           YEAR ENDED MARCH 31, 2004     YEAR ENDED MARCH 31, 2003
                                           --------------------------    --------------------------
                                                        % APPROVED BY                % APPROVED BY
                                                            AUDIT                        AUDIT
                                               $          COMMITTEE         $          COMMITTEE
                                           ---------    -------------    --------    --------------
<S>                                        <C>          <C>              <C>         <C>
Audit Fees...............................    319,600         100%        278,000          100%
Audit-Related Fees.......................    132,648         100%        122,559          100%
Tax Fees.................................    355,628         100%        250,144          100%
All Other Fees...........................     44,369         100%         60,058          100%
                                           ---------                     -------
Total....................................    852,245         100%        710,761          100%
                                           =========                     =======
</Table>

     Audit-Related Fees in the table above for the years ended March 31, 2004
and 2003 relate to quarterly reviews, review of our annual report on Form 10-K
and work for compliance with the Sarbanes-Oxley Act of 2002 and Audit Committee
work.

     Tax Fees in the table above for the years ended March 31, 2004 and 2003
relate to tax compliance in Ireland ($108,000), tax compliance and filings in
the U.S. ($137,855), tax advice and other international tax filings.

     All Other Fees in the table above for the years ended March 31, 2004 and
2003 relate to accounting advice and statutory filings for our subsidiaries.

AUDIT COMMITTEE

     Audit committees of Airplanes Limited and Airplanes Trust were established
in August 2000, consisting of their four independent directors or controlling
trustees, respectively. In light of the Sarbanes-Oxley Act of 2002, we have
adopted revised terms of reference for a single audit committee acting for
Airplanes Group, currently consisting of three independent directors/controlling
trustees since the financial statements combine the operating results, assets,
liabilities and cashflows of Airplanes Limited and Airplanes Trust. The duties
of the audit committee include the following:

     -  to retain, oversee and terminate the independent auditors of Airplanes
        Group, including, the approval of all audit and engagement fees and
        terms;

     -  to discuss and agree with the external auditor before the audit
        commences the nature, staffing and scope of the audit;

     -  to pre-approve all permissible non-audit services performed by the
        external auditors. (Audit services include the statutory audit of group
        and subsidiary companies, the review of 10-K filings and other related
        work). Pre-approval is delegated to any member to cater for matters
        arising between meetings, however, the full Committee shall approve at
        the next scheduled meeting;

     -  to review from time to time the cost effectiveness of the audit and the
        independence and objectivity of the external auditor;

     -  to review submissions to the boards in relation to any audited accounts,
        focusing particularly on:

       -- critical accounting policies and practices and any changes in
          accounting policies and practice;

       -- all alternative treatments of financial information presented that
          have been or are to be discussed with the boards;

       -- any unadjusted audit differences;

       -- the going concern assumption;

                                        88
<PAGE>

       -- compliance with accounting standards (and in particular accounting
          standards adopted in the financial year for the first time);

       -- compliance with legal requirements;

     -  to review, on behalf of the boards, Airplanes Group's system of internal
        and disclosure controls and procedures (including financial, operational
        compliance and risk management, and whether there are any significant
        deficiencies in the design or operation of such controls and procedures,
        material weaknesses and any fraud involving any persons with a
        significant role in such controls and procedures) and make
        recommendations to the boards;

     -  to review the statement proposed to be included in each filing required
        to be made with the US Securities and Exchange Commission on the review
        of the system of internal and disclosure controls and procedures
        (including financial, operational compliance and risk management, and
        whether there are any significant deficiencies in the design or
        operation of such controls and procedures, material weaknesses and any
        fraud involving any persons with a significant role in such controls and
        procedures) prior to endorsement by the boards;

     -  to consider other matters as defined by the boards;

     -  to report on all of the above matters to the boards.

                                        89
<PAGE>

                                    PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(1) and (2). Financial Statements: the response to this portion of Item
15 is submitted as a separate section of this report beginning on page F-1.

<Table>
<Caption>
 (A)(3) AND
(C). EXHIBITS                           DESCRIPTION
-------------                           -----------
<C>             <S>                                                            <C>
     3.1        Certificate of Incorporation of Atlanta Holdings Limited
                dated November 3, 1995 and Certificate of Incorporation on
                change of name to Airplanes Limited dated November 29,
                1995(1).....................................................
     3.2        Memorandum and Articles of Association of Airplanes Limited
                dated March 11, 1996(2).....................................
     3.3        Memorandum and Articles of Association of Airplanes Limited
                reprinted with amendments to June 29, 2000(4)...............
     3.4        Airplanes U.S. Trust Amended and Restated Trust Agreement
                among GPA, Inc., as Settlor, Wilmington Trust Company, as
                the Delaware Trustee, and the Controlling Trustees referred
                to therein dated March 11, 1996(2)..........................
     3.5        Amendment to Airplanes U.S. Trust Amended and Restated Trust
                Agreement dated June 29, 2000(4)............................
     4.1        Pass Through Trust Agreement dated as of March 28, 1996
                among Airplanes Limited, Airplanes U.S. Trust and Bankers
                Trust Company, as Trustee(2)................................
     4.2        Trust Supplement No. 7 dated as of March 28, 1996 to the
                Pass Through Trust Agreement(2).............................
     4.3        Trust Supplement No. 8 dated as of March 28, 1996 to the
                Pass Through Trust Agreement(2).............................
     4.4        Trust Supplement No. 9 dated as of March 16, 1998 to the
                Pass Through Trust Agreement(3).............................
     4.5        Trust Supplement No. 11 dated as of March 16, 1998 to the
                Pass Through Trust Agreement(3).............................
     4.6        Trust Supplement No. 12 dated as of March 16, 1998 to the
                Pass Through Trust Agreement(3).............................
     4.7        Trust Supplement No. 13 dated as of March 15, 2001 to the
                Pass Through Trust Agreement(5).............................
     4.8        Trust Supplement A dated as of March 16, 1998 to the Pass
                Through Trust Agreement(3)..................................
     4.9        Form of Subclass A-6 Pass Through Certificate(3)............
     4.10       Form of Subclass A-8 Pass Through Certificate(3)............
     4.11       Form of Subclass A-9 Pass Through Certificate(5)
                (included in Exhibit 4.7)...................................
     4.12       Form of Class B Pass Through Certificate(3).................
     4.13       Form of Class C Pass Through Certificate(2).................
     4.14       Form of Class D Pass Through Certificate(2).................
     4.15       Airplanes Limited Indenture dated as of March 28, 1996 among
                Airplanes Limited, Airplanes U.S. Trust and Bankers Trust
                Company, as Trustee(2)......................................
     4.16       Supplement No. 1 to the Airplanes Limited Indenture(3)......
     4.17       Supplement No. 2 to the Airplanes Limited Indenture(5)......
     4.18       Supplement No. 3 to the Airplanes Limited Indenture(8)......
     4.19       Airplanes U.S. Trust Indenture dated as of March 28, 1996
                among Airplanes U.S. Trust, Airplanes Limited and Bankers
                Trust Company, as Trustee(2)................................
</Table>

                                        90
<PAGE>

<Table>
<Caption>
 (A)(3) AND
(C). EXHIBITS                           DESCRIPTION
-------------                           -----------
<C>             <S>                                                            <C>
     4.20       Supplement No. 1 to the Airplanes Trust Indenture(3)........
     4.21       Supplement No. 2 to the Airplanes Trust Indenture(5)........
     4.22       Supplement No. 3 to the Airplanes Trust Indenture(8)........
     4.23       Form of Floating Rate Subclass A-6 Note(3)..................
     4.24       Form of Floating Rate Subclass A-8 Note(3)..................
     4.25       Form of Floating Rate Subclass A-9 Note(5)..................
     4.26       Form of Floating Rate Class B Note(3).......................
     4.27       Form of 8.15% Class C Note(2)...............................
     4.28       Form of 10.875% Class D Note(2).............................
     4.29       Form of 20.00% (inflation adjusted) Class E Note(2).........
    10.1        Stock Purchase Agreement dated as of March 28, 1996 among
                AerFi, Inc., AerFi Group plc and Airplanes U.S. Trust(2)....
    10.2        Stock Purchase Agreement dated as of March 28, 1996 among
                AerFi Group plc, Skyscape Limited and Airplanes
                Limited(2)..................................................
    10.3        Administrative Agency Agreement dated as of March 28, 1996
                among AerFi Financial Services (Ireland) Limited, AerFi
                Group plc, Airplanes Limited, AerFi II Limited, Airplanes
                U.S. Trust and AeroUSA, Inc.(2).............................
    10.4        Amendment No. 1 to Administrative Agency Agreement dated as
                of February 5, 2002 among debis AirFinance Financial
                Services (Ireland) Limited, debis AirFinance Ireland plc,
                Airplanes Limited, Airplanes Holdings Limited, Airplanes
                U.S. Trust and AeroUSA Inc.(6)..............................
    10.5        Amendment No. 2 to Administrative Agency Agreement dated as
                of November 5, 2002 among debis AirFinance Financial
                Services (Ireland) Limited, debis AirFinance Ireland plc,
                Airplanes Limited, Airplanes Holdings Limited, Airplanes
                U.S. Trust and AeroUSA Inc.(7)..............................
    10.6        Servicing Agreement dated as of March 28, 1996 among GE
                Capital Aviation Services, Limited, Airplanes Limited,
                AeroUSA, Inc., AerFi II Limited, Airplanes U.S. Trust and
                AerFi Cash Manager Limited(2)...............................
    10.7        Reference Agency Agreement dated as of March 28, 1996 among
                Airplanes Limited, Airplanes U.S. Trust Bankers Trust
                Company, as Airplanes Limited Indenture Trustee and
                Airplanes U.S. Trust Indenture Trustee, Bankers Trust
                Company, as Reference Agent and AerFi Cash Manager Limited,
                as Cash Manager(2)..........................................
    10.8        Secretarial Services Agreement dated as of March 28, 1996
                between Airplanes Limited and Mourant & Co. Secretaries
                Limited, as Company Secretary(2)............................
    10.9        Cash Management Agreement dated as of March 28, 1996 between
                AerFi Cash Manager Limited, as Cash Manager, AerFi Group
                plc, Airplanes Limited, Airplanes U.S. Trust and Bankers
                Trust Company, as Trustee under each of the Airplanes
                Limited Indenture, the Airplanes U.S. Trust Indenture and
                the Security Trust Agreement(2).............................
    10.10       Amendment No. 1 to Cash Management Agreement dated as of
                February 5, 2002 among debis AirFinance Cash Manager
                Limited, debis AirFinance Ireland plc, Airplanes Limited,
                Airplanes U.S. Trust and Bankers Trust Company(6)...........
    10.11       Amendment No. 2 to Cash Management Agreement dated as of
                November 5, 2002 among debis AirFinance Cash Manager
                Limited, debis AirFinance Ireland plc, Airplanes Limited,
                Airplanes U.S. Trust and Bankers Trust Company(7)...........
    10.12       Form of Swap Agreement(2)...................................
</Table>

                                        91
<PAGE>

<Table>
<Caption>
 (A)(3) AND
(C). EXHIBITS                           DESCRIPTION
-------------                           -----------
<C>             <S>                                                            <C>
    10.13       Security Trust Agreement dated as of March 28, 1996 among
                Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
                Secretaries Limited, the Issuer Subsidiaries listed therein,
                AerFi Financial Services (Ireland) Limited, AerFi Cash
                Manager Limited, AerFi Group plc, GE Capital Aviation
                Services, Limited, Bankers Trust Company, as Airplanes U.S.
                Trust Indenture Trustee and Airplanes Limited Indenture
                Trustee, Bankers Trust Company, as Reference Agent, and
                Bankers Trust Company, as Security Trustee(2)...............
    12          Statement re Computation of Ratios..........................
    21          Subsidiaries of the Registrants.............................
    31          Certification required by Rule 13a-14(a)/15d-14(a)..........
    32          Certification required by Section 1350......................
    99          Appendix 3 to the offering memorandum dated March 15, 2001
                (Expected Portfolio
                Value based on the Depreciation factors and the Aircraft in
                the Portfolio as of
                January 31, 2001)(6)........................................
</Table>

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

  (1)    Incorporated by reference to the Registration Statement on Form S-1
         (File No. 33-99978), previously filed with the Commission on December
         1, 1995, and Amendments No. 1 through 5 thereto.

  (2)    Incorporated by reference to the Report on Form 10-Q for the quarterly
         period ended December 31, 1996, previously filed with the Commission.

  (3)    Incorporated by reference to the Registration Statement on Form S-1
         (File No. 33-99978), previously filed with the Commission on December
         30, 1997, and Amendments No. 1 through 3, thereto.

  (4)    Incorporated by reference to the Report on Form 10-Q for the quarterly
         period ended June 30, 2000, previously filed with the Commission.

  (5)    Incorporated by reference to the Registration Statement on Form S-4
         (File No. 33-58608), previously filed with the Commission on April 10,
         2001 and Amendment No. 1 thereto.

  (6)    Incorporated by reference to the Report on Form 10-K for the annual
         period ended March 31, 2002, previously filed with the Commission.

  (7)    Incorporated by reference to the Report on Form 10-K for the annual
         period ended March 31, 2003, previously filed with the Commission.

  (8)    Incorporated by reference to the Report on Form 10-Q for the quarterly
         period ended September 30, 2003, previously filed with the Commission.

     (b)  Reports on Form 8-K: filed on January 13, 2004, February 12, 2004 and
March 11, 2004 (relating to the monthly report to holders of the Certificates);
filed on February 14, 2004 (containing a press release in respect of annual
aircraft appraisals).

     (d)  Not applicable.

                                        92
<PAGE>

                                AIRPLANES GROUP

                         INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Report of Independent Public Accounting Firm................    F-2
Balance Sheets..............................................    F-3
Statements of Operations....................................    F-4
Statements of Comprehensive Income/(Loss)...................    F-5
Statements of Changes in Shareholders' Deficit/Net
  Liabilities...............................................    F-6
Statements of Cashflows.....................................    F-7
Notes to the Financial Statements...........................    F-8
</Table>

                                       F-1
<PAGE>

                  REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

To the Board of Directors of Airplanes Limited
  and the Controlling Trustees of Airplanes U.S. Trust

     We have audited the accompanying balance sheets of Airplanes Limited and
Airplanes U.S. Trust ("Airplanes Group") as of March 31, 2004 and 2003, and the
related statements of operations, changes in shareholders' deficit/net
liabilities, comprehensive income/(loss) and cashflows for each of the years in
the three year period ended March 31, 2004. These financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits 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.

     As described more fully in notes 9 and 11 to the financial statements, the
economic downturn and global conditions have had a significant adverse effect on
the aircraft industry in general and on Airplanes Group which has resulted in
reductions in aircraft values and lease rates. These conditions have affected
Airplanes Group's ability to make scheduled principal and interest payments on
the various classes of notes.

     In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Airplanes Group as at March
31, 2004 and 2003, and the results of its operations and cashflows for each of
the years in the three year period ended March 31, 2004, in conformity with
generally accepted accounting principles in the United States.

<Table>
<S>                                            <C>
Dublin, Ireland                                KPMG
June 8, 2004                                   Chartered Accountants
</Table>

                                       F-2
<PAGE>

                                AIRPLANES GROUP

                                 BALANCE SHEETS

<Table>
<Caption>
                                              MARCH 31, 2003                     MARCH 31, 2004
                                     --------------------------------   --------------------------------
                                     AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                             NOTES    LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                             -----   ---------   ---------   --------   ---------   ---------   --------
                                               ($ MILLIONS)                       ($ MILLIONS)
<S>                          <C>     <C>         <C>         <C>        <C>         <C>         <C>
ASSETS
Current assets:
Cash.......................    5         135          6          141         77           6          83
Accounts receivable........    6
  Trade receivables........               30          7           37         19           4          23
  Allowance for doubtful
     debts.................              (14)        (6)         (20)        (8)         (1)         (9)
Amounts due from Airplanes
  Limited..................    7          --         58           58         --          45          45
Prepaid expenses...........               --         --           --          3          --           3
Other current assets.......                1         --            1          1           5           6
                                      ------       ----       ------     ------      ------      ------
Total current assets.......              152         65          217         92          59         151
                                      ------       ----       ------     ------      ------      ------
Net investment in capital
  and sales type leases....    8           3         --            3          1          --           1
Aircraft, held for use.....    9       1,944        111        2,055      1,393          59       1,452
Aircraft, held for sale....    9          --         --           --         98           8         106
                                      ------       ----       ------     ------      ------      ------
                                       2,099        176        2,275      1,584         126       1,710
                                      ======       ====       ======     ======      ======      ======
LIABILITIES
Current liabilities:
Accrued expenses and other
  liabilities..............   10       2,003        193        2,196      2,639         255       2,894
Amounts due to Airplanes
  Trust....................    7          58         --           58         45          --          45
                                      ------       ----       ------     ------      ------      ------
Total current
  liabilities..............            2,061        193        2,254      2,684         255       2,939
                                      ------       ----       ------     ------      ------      ------
Indebtedness...............   11       2,924        285        3,209      2,828         275       3,103
Provision for
  maintenance..............   12         262         13          275        274          13         287
Deferred income taxes......   18          13         18           31         --          19          19
                                      ------       ----       ------     ------      ------      ------
Total liabilities..........            5,260        509        5,769      5,786         562       6,348
                                      ------       ----       ------     ------      ------      ------
Common stock, $1 par value
  per share, Authorised
  10,000 shares; issued and
  outstanding 30 shares in
  2004 and 2003............               --         --           --         --          --          --
Net liabilities............           (3,161)      (333)      (3,494)    (4,202)       (436)     (4,638)
                                      ------       ----       ------     ------      ------      ------
                                       2,099        176        2,275      1,584         126       1,710
                                      ======       ====       ======     ======      ======      ======
</Table>

     Commitments and Contingent Liabilities (Notes 19 and 20)

    The accompanying notes are an integral part of the financial statements.
                                       F-3
<PAGE>

                                AIRPLANES GROUP

                            STATEMENTS OF OPERATIONS
<Table>
<Caption>
                                                              YEAR ENDED MARCH 31,
                                       -------------------------------------------------------------------
                                                     2002                               2003
                                       --------------------------------   --------------------------------
                                       AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                               NOTES    LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                               -----   ---------   ---------   --------   ---------   ---------   --------
                                                 ($ MILLIONS)                       ($ MILLIONS)
<S>                            <C>     <C>         <C>         <C>        <C>         <C>         <C>
REVENUES
Aircraft leasing.............   14        382          28         410        337          21         358
Aircraft sales...............               5          --           5         14          --          14
EXPENSES
Cost of aircraft sold........              (2)         --          (2)       (15)         --         (15)
Impairment Provision.........            (245)        (47)       (292)       (74)         (2)        (76)
Depreciation and
  amortisation...............            (146)        (13)       (159)      (132)         (8)       (140)
Net interest expense.........   15       (559)        (55)       (614)      (660)        (65)       (725)
Bad and doubtful debts.......              (2)         (1)         (3)        (5)         (1)         (6)
Other lease costs............   16        (70)         (3)        (73)       (73)         (4)        (77)
Selling, general and
  administrative expenses....   17        (33)         (3)        (36)       (31)         (2)        (33)
                                         ----         ---        ----       ----         ---        ----
OPERATING LOSS BEFORE INCOME
  TAXES......................            (670)        (94)       (764)      (639)        (61)       (700)
Income tax benefit...........   18         42          22          64          3           5           8
                                         ----         ---        ----       ----         ---        ----
NET LOSS BEFORE CUMULATIVE
  EFFECT OF CHANGE IN
  ACCOUNTING PRINCIPLE.......            (628)        (72)       (700)      (636)        (56)       (692)
Cumulative effect of change
  in accounting principle,
  adoption of SFAS 133.......               5          --           5         --          --          --
                                         ----         ---        ----       ----         ---        ----
NET LOSS.....................            (623)        (72)       (695)      (636)        (56)       (692)
                                         ====         ===        ====       ====         ===        ====

<Caption>
                                     YEAR ENDED MARCH 31,
                               --------------------------------
                                             2004
                               --------------------------------
                               AIRPLANES   AIRPLANES
                                LIMITED      TRUST     COMBINED
                               ---------   ---------   --------
                                         ($ MILLIONS)
<S>                            <C>         <C>         <C>
REVENUES
Aircraft leasing.............      250         17          267
Aircraft sales...............        3         --            3
EXPENSES
Cost of aircraft sold........       (1)        --           (1)
Impairment Provision.........     (335)       (38)        (373)
Depreciation and
  amortisation...............     (111)        (5)        (116)
Net interest expense.........     (778)       (76)        (854)
Bad and doubtful debts.......        2          3            5
Other lease costs............      (74)        (8)         (82)
Selling, general and
  administrative expenses....      (35)        (2)         (37)
                                ------       ----       ------
OPERATING LOSS BEFORE INCOME
  TAXES......................   (1,079)      (109)      (1,188)
Income tax benefit...........       13          4           17
                                ------       ----       ------
NET LOSS BEFORE CUMULATIVE
  EFFECT OF CHANGE IN
  ACCOUNTING PRINCIPLE.......   (1,066)      (105)      (1,171)
Cumulative effect of change
  in accounting principle,
  adoption of SFAS 133.......       --         --           --
                                ------       ----       ------
NET LOSS.....................   (1,066)      (105)      (1,171)
                                ======       ====       ======
</Table>

    The accompanying notes are an integral part of the financial statements.
                                       F-4
<PAGE>

                                AIRPLANES GROUP

                   STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

<Table>
<Caption>
                                                                       YEAR ENDED MARCH 31,
                              ------------------------------------------------------------------------------------------------------
                                            2002                               2003                               2004
                              --------------------------------   --------------------------------   --------------------------------
                              AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                               LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                              ---------   ---------   --------   ---------   ---------   --------   ---------   ---------   --------
                                        ($ MILLIONS)                       ($ MILLIONS)                       ($ MILLIONS)
<S>                           <C>         <C>         <C>        <C>         <C>         <C>        <C>         <C>         <C>
Loss for the year...........    (623)        (72)       (695)      (636)        (56)       (692)     (1,066)      (105)      (1,171)
OTHER COMPREHENSIVE LOSS
 SFAS 133 transition
   adjustment...............     (35)         (3)        (38)        --          --          --          --         --           --
 Net change in cashflow
   hedges...................       2          --           2        (38)         (4)        (42)         25          2           27
                                ----         ---        ----       ----         ---        ----      ------       ----       ------
COMPREHENSIVE LOSS..........    (656)        (75)       (731)      (674)        (60)       (734)     (1,041)      (103)      (1,144)
                                ====         ===        ====       ====         ===        ====      ======       ====       ======
</Table>

    The accompanying notes are an integral part of the financial statements.
                                       F-5
<PAGE>

                                AIRPLANES GROUP

         STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES
                   YEARS ENDED MARCH 31, 2002, 2003 AND 2004
<Table>
<Caption>
                                              AIRPLANES LIMITED
                          ----------------------------------------------------------
                                                           OTHER
                             SHARE       ACCUMULATED   COMPREHENSIVE   SHAREHOLDERS'
                            CAPITAL         LOSS       (INCOME)/LOSS      DEFICIT
                          ------------   -----------   -------------   -------------
                          ($ MILLIONS)      ($         ($ MILLIONS)    ($ MILLIONS)
                                          MILLIONS)
<S>                       <C>            <C>           <C>             <C>
Balance at March 31,
  2001..................       --           1,831            --            1,831
Net loss for the
  period................       --             623            --              623
Cumulative effect of
  accounting change SFAS
  133 transaction
  adjustment............       --              --            35               35
Other comprehensive
  income................       --              --            (2)              (2)
                              ---           -----           ---            -----
Balance at March 31,
  2002..................       --           2,454            33            2,487
Net loss for the
  period................       --             636            --              636
Other comprehensive
  loss..................       --              --            38               38
                              ---           -----           ---            -----
Balance at March 31,
  2003..................       --           3,090            71            3,161
Net loss for the
  period................       --           1,066            --            1,066
                              ---
Other comprehensive
  income................       --              --           (25)             (25)
                              ---           -----           ---            -----
BALANCE AT MARCH 31,
  2004..................       --           4,156            46            4,202
                              ---           =====           ===            =====

<Caption>
                                        AIRPLANES TRUST                   COMBINED
                          -------------------------------------------   -------------
                                            OTHER                       SHAREHOLDERS'
                          ACCUMULATED   COMPREHENSIVE   SHAREHOLDERS'    DEFICIT/NET
                             LOSS       (INCOME)/LOSS      DEFICIT       LIABILITIES
                          -----------   -------------   -------------   -------------
                            ($          ($ MILLIONS)    ($ MILLIONS)    ($ MILLIONS)
                           MILLIONS)
<S>                       <C>           <C>             <C>             <C>
Balance at March 31,
  2001..................      198             --             198            2,029
Net loss for the
  period................       72             --              72              695
Cumulative effect of
  accounting change SFAS
  133 transaction
  adjustment............       --              3               3               38
Other comprehensive
  income................       --             --              --               (2)
                              ---            ---             ---            -----
Balance at March 31,
  2002..................      270              3             273            2,760
Net loss for the
  period................       56             --              56              692
Other comprehensive
  loss..................       --              4               4               42
                              ---            ---             ---            -----
Balance at March 31,
  2003..................      326              7             333            3,494
Net loss for the
  period................      105             --             105            1,171
Other comprehensive
  income................       --             (2)             (2)             (27)
                              ---            ---             ---            -----
BALANCE AT MARCH 31,
  2004..................      431              5             436            4,638
                              ===            ===             ===            =====
</Table>

    The accompanying notes are an integral part of the financial statements
                                       F-6
<PAGE>

                                AIRPLANES GROUP

                            STATEMENTS OF CASHFLOWS
<Table>
<Caption>
                                                        YEAR ENDED MARCH 31,
                                 -------------------------------------------------------------------
                                               2002                               2003
                                 --------------------------------   --------------------------------
                                 AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                                  LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                                 ---------   ---------   --------   ---------   ---------   --------
                                           ($ MILLIONS)                       ($ MILLIONS)
<S>                              <C>         <C>         <C>        <C>         <C>         <C>
CASHFLOWS FROM OPERATING
  ACTIVITIES
Net loss.......................    (623)        (72)       (695)      (636)        (56)       (692)
Adjustments to reconcile net
  loss to net cash provided by
  operating activities:
Depreciation and
  amortisation.................     146          13         159        132           8         140
Impairment charge..............     245          47         292         74           2          76
Aircraft maintenance, net......      18          (2)         16         21           2          23
(Profit)/loss on disposal of
  aircraft.....................      (3)         --          (3)         1          --           1
Deferred income taxes..........     (42)        (22)        (64)        (3)         (5)         (8)
Accrued and deferred interest
  expense......................     387          39         426        496          49         545
Changes in operating assets and
  liabilities:
Accounts receivable, net.......      (7)        (15)        (22)        (2)          7           5
Other accruals and
  liabilities..................      10          (6)          4         (3)         (1)         (4)
Other assets...................       3           4           7          1           4           5
                                   ----         ---        ----       ----         ---        ----
NET CASH PROVIDED BY/(USED IN)
  OPERATING ACTIVITIES.........     134         (14)        120         81          10          91
                                   ====         ===        ====       ====         ===        ====
CASHFLOWS FROM INVESTING
  ACTIVITIES
Sale of/(Additions to)
  aircraft.....................       2          --           2         12          --          12
Intercompany account
  movements....................     (30)         30          --         --          --          --
Capital and sales type
  leases.......................       7          --           7          4          --           4
                                   ----         ---        ----       ----         ---        ----
NET CASH PROVIDED BY/(USED IN)
  INVESTING ACTIVITIES.........     (21)         30           9         16          --          16
                                   ====         ===        ====       ====         ===        ====
CASHFLOWS FROM FINANCING
  ACTIVITIES
Repayment of notes.............    (168)        (16)       (184)       (98)        (10)       (108)
Issue of refinanced notes......      --          --          --         --          --          --
                                   ----         ---        ----       ----         ---        ----
NET CASH USED IN FINANCING
  ACTIVITIES...................    (168)        (16)       (184)       (98)        (10)       (108)
                                   ====         ===        ====       ====         ===        ====
NET DECREASE IN CASH...........     (55)         --         (55)        (1)         --          (1)
Cash at beginning of year......     191           6         197        136           6         142
                                   ----         ---        ----       ----         ---        ----
Cash at end of year............     136           6         142        135           6         141
                                   ====         ===        ====       ====         ===        ====
CASH PAID IN RESPECT OF:
Interest.......................     169          17         186        162          17         179
                                   ====         ===        ====       ====         ===        ====

<Caption>
                                       YEAR ENDED MARCH 31,
                                 --------------------------------
                                               2004
                                 --------------------------------
                                 AIRPLANES   AIRPLANES
                                  LIMITED      TRUST     COMBINED
                                 ---------   ---------   --------
                                           ($ MILLIONS)
<S>                              <C>         <C>         <C>
CASHFLOWS FROM OPERATING
  ACTIVITIES
Net loss.......................   (1,066)      (105)      (1,171)
Adjustments to reconcile net
  loss to net cash provided by
  operating activities:
Depreciation and
  amortisation.................      111          5          116
Impairment charge..............      335         38          373
Aircraft maintenance, net......       18          2           20
(Profit)/loss on disposal of
  aircraft.....................       (2)        --           (2)
Deferred income taxes..........      (13)        (4)         (17)
Accrued and deferred interest
  expense......................      664         65          729
Changes in operating assets and
  liabilities:
Accounts receivable, net.......       (2)        10            8
Other accruals and
  liabilities..................       (5)        (1)          (6)
Other assets...................       (3)        --           (3)
                                  ------       ----       ------
NET CASH PROVIDED BY/(USED IN)
  OPERATING ACTIVITIES.........       37         10           47
                                  ======       ====       ======
CASHFLOWS FROM INVESTING
  ACTIVITIES
Sale of/(Additions to)
  aircraft.....................        1         --            1
Intercompany account
  movements....................       --         --           --
Capital and sales type
  leases.......................        2         --            2
                                  ------       ----       ------
NET CASH PROVIDED BY/(USED IN)
  INVESTING ACTIVITIES.........        3         --            3
                                  ======       ====       ======
CASHFLOWS FROM FINANCING
  ACTIVITIES
Repayment of notes.............      (98)       (10)        (108)
Issue of refinanced notes......       --         --           --
                                  ------       ----       ------
NET CASH USED IN FINANCING
  ACTIVITIES...................      (98)       (10)        (108)
                                  ======       ====       ======
NET DECREASE IN CASH...........      (58)        --          (58)
Cash at beginning of year......      135          6          141
                                  ------       ----       ------
Cash at end of year............       77          6           83
                                  ======       ====       ======
CASH PAID IN RESPECT OF:
Interest.......................      116         11          127
                                  ======       ====       ======
</Table>

    The accompanying notes are an integral part of the financial statements.
                                       F-7
<PAGE>

                                AIRPLANES GROUP

                       NOTES TO THE FINANCIAL STATEMENTS

1.   SECURITIZATION TRANSACTION

     On March 28, 1996 (the "closing date") debis AirFinance Ireland plc (then
known as GPA Group plc) and its subsidiary undertakings ("debis") re-financed on
a long term basis certain indebtedness due to commercial banks and other senior
secured debt. The re-financing was effected through a major aircraft
securitization transaction (the "Transaction").

     Under the terms of the Transaction, a combination ("Airplanes Group")
comprising Airplanes Limited, a special purpose company formed under the laws of
Jersey, Channel Islands ("Airplanes Limited") and Airplanes U.S. Trust, a trust
formed under the laws of Delaware ("Airplanes Trust") together acquired directly
or indirectly from debis a portfolio of 229 commercial aircraft (collectively
the "aircraft") and related leases (the "leases"). The Transaction was effected
by transferring existing subsidiaries of debis that owned the aircraft to
Airplanes Limited and Airplanes Trust, respectively. References to Airplanes
Group in these notes to the financial statements may relate to Airplanes Limited
and Airplanes Trust on a combined or individual basis as applicable.

     Simultaneously with such transfers, Airplanes Group issued notes of $4,048
million in aggregate principal amount in four classes: class A, class B, class C
and class D ("notes") with approximately 91% of the principal amount of notes in
each class being issued by Airplanes Limited and 9% approximately by Airplanes
Trust. Airplanes Group also issued class E notes ranking after the notes and
these were taken up by debis as part consideration for the transfer of the
aircraft and certain related lease receivables. Airplanes Limited and Airplanes
Trust have each fully and unconditionally guaranteed each others' obligations
under the relevant notes.

     On March 16, 1998 Airplanes Group successfully completed a refinancing of
$2,437 million related to class A and class B notes.

     On November 20, 1998 debis (then known as AerFi Group plc) transferred its
holding of class E notes to GE Capital Corporation ("GE Capital").

     On March 15, 2001 Airplanes Group successfully completed a refinancing of
$750 million related to Class A Notes.

2.   BASIS OF PREPARATION

     The accompanying financial statements of Airplanes Limited, Airplanes Trust
and the combined balance sheets, statements of operations, statements of
comprehensive income/(loss), statements of changes in shareholders' deficit/net
liabilities and statements of cashflows of Airplanes Group (together the
"Financial Statements") have been prepared on a going concern basis in
accordance with the accounting policies set out in Note 4 and in conformity with
United States of America generally accepted accounting principles.

3.   RELATIONSHIP WITH GE CAPITAL AVIATION SERVICES LIMITED ("GECAS") AND DEBIS
     AND MANAGEMENT ARRANGEMENTS

     GECAS provides, in consideration for management fees, certain management
services to Airplanes Group pursuant to a servicing agreement entered into by
GECAS with certain members of Airplanes Group. Under certain circumstances GECAS
may resign from the performance of its duties in relation to the management of
all the aircraft generally or, the management of one or more aircraft
individually, provided in either case that a replacement has been appointed to
manage the aircraft. In addition, Airplanes Group will, under certain
circumstances, have the right to terminate the servicing agreement.

     As a holder of the majority of the class E notes, GE Capital has the right
to appoint one director to the board of Airplanes Limited and one of the
controlling trustees of Airplanes Trust. Airplanes Limited has a board of
directors of five directors, including the director appointed by the holders of
the class E notes. The controlling trustees of Airplanes Trust are the same
individuals.

                                       F-8
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

3.   RELATIONSHIP WITH GE CAPITAL AVIATION SERVICES LIMITED ("GECAS") AND
     DEBIS AND MANAGEMENT ARRANGEMENTS -- (CONTINUED)

     Certain cash management and administrative services are being provided by
debis subsidiaries to Airplanes Group, pursuant to a cash management agreement
and administrative agency agreement entered into by such debis subsidiaries with
Airplanes Group.

     In the year to March 31, 2004, fees of $24.2 million and $5.8 million
(2003: $23.9 million and $5.7 million) were charged by GECAS and debis
respectively.

     Although Airplanes Group's portfolio will at all times be held in two
different entities, Airplanes Limited and Airplanes Trust, Airplanes Group is
managed and the note covenants structured on the basis of a single economic
entity owning a single aircraft portfolio.

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Airplanes Group's accounting policies conform with United States generally
accepted accounting principles. The following paragraphs describe the main
accounting policies followed in these financial statements.

     (a) Principles of consolidation

     The financial statements separately consolidate the financial statements of
Airplanes Limited and all of its subsidiary undertakings and the financial
statements of Airplanes Trust and all of its subsidiary undertakings. All
significant intercompany balances and transactions have been eliminated in each
consolidation.

     (b) Revenue recognition

     Revenue from aircraft on operating leases is recognised as income on a
straight line basis over the term of the leases. Unearned revenue from capital
and sales type leases is amortised and included in income under the
interest/effective yield method.

     At the time Airplanes Group disposes of assets, the cost and accumulated
depreciation are removed from the related accounts and recorded as cost of
aircraft sold. The proceeds are recorded in revenue as aircraft sales.

     (c) Aircraft

     Aircraft held for use, including engines, are stated at cost less
accumulated depreciation and, where considered necessary, impairment provisions.

     Aircraft are periodically reviewed for impairment in accordance with
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long Lived Assets ("SFAS 144"). An impairment loss is
evaluated when the undiscounted estimated future cashflows of the aircraft are
less than its carrying value and the loss is measured as the excess of the
carrying value over the fair value.

     The fair value of the aircraft is generally based on independent appraisals
of aircraft. The appraised values are determined based on the assumption that
there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". On the basis of past experience including actual
lease rates and sales prices achievable and the servicer's experience of the
market, estimated discounted cashflows are used as a more accurate indication of
fair value. The estimated discounted future cashflows assume, among other
things, market lease rates at the end of the existing lease term, other lease
costs, downtime and the risk inherent in the cashflows.

     Cost comprises the invoiced cost net of manufacturers' discounts.
Depreciation is calculated on a straight line basis. The estimates of useful
lives and residual values are reviewed periodically.

                                       F-9
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

     The current estimates for residual values are generally 15% of cost, and
for useful lives are as follows:

<Table>
<Caption>
                                                              YEARS          FROM
                                                              -----    ----------------
<S>                                                           <C>      <C>
Stage 2 aircraft............................................  20-25    Manufacture date
Refurbished and upgraded aircraft -- converted to
  freighters................................................  20       Conversion date
Turboprop aircraft..........................................  22.5     Manufacture date
All other aircraft..........................................  25       Manufacture date
</Table>

     Aircraft classified as held for sale are recorded at the lower of carrying
amount or fair value less cost to sell. Aircraft are not depreciated while
classified as held for sale. Costs to sell are the incremental direct costs to
transact a sale, that is, the costs that result directly from and are essential
to a sale transaction and that would not have been incurred by the entity had
the decision to sell not been made.

     (d) Net investment in capital and sales type leases

     The amounts due from lessees under capital leases, where the entire cost of
the asset is recovered, are shown in the balance sheet at the net amount
receivable under these leases. The related finance revenue is recognised as
income over the period of the lease in proportion to the amounts outstanding to
give a constant periodic rate of return.

     (e) Provision for maintenance

     In most lease contracts the lessee has the obligation for maintenance costs
on airframes and engines and in many lease contracts the lessee makes a full or
partial prepayment, calculated at an hourly rate, from which maintenance
expenditures for major checks are disbursed. The undisbursed portion of these
prepayments are included in the provision for maintenance which may from time to
time include prepayments made by current lessees and prior lessees. At the time
an aircraft is re-leased to a new lessee, an assessment is made of the expected
maintenance reserve requirement and any excess reserve is then released through
the Statement of Operations.

     Maintenance provisions also include the directors' estimate of maintenance
costs which are Airplanes Group's primary responsibility and certain amounts in
respect of the risk of lessees defaulting on obligations, which could result in
Airplanes Group incurring maintenance costs which are the lessee's primary
responsibility.

     (f) Allowance for doubtful debts

     Allowances are made for doubtful debts where it is considered that there is
a significant risk of non recovery.

     The assessment of risk of non recovery is primarily based on the extent to
which amounts outstanding exceed the expected value of security held together
with an assessment of the financial strength and condition of a lessee and the
economic conditions existing in the lessee's operating environment.

     (g) Taxation

     Income taxes are accounted for under the asset and liability method.
Deferred income tax assets and liabilities are recognised for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred income tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred income tax assets and
liabilities of a change in tax rates is recognised in the period that includes
the enactment date.

                                       F-10
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

     Income tax is provided based on the results for the year. Airplanes
Limited's underlying taxable entities in Ireland are subject to Irish Corporate
Income Tax on approved trading operations at a rate of 10% until December 31,
2005 and thereafter, at a rate of 12.5%. Airplanes Trust's underlying taxable
entities in the U.S. are subject to U.S. Federal and State taxes on their
trading operations.

     (h) Concentrations of credit risk

     Financial instruments which potentially subject Airplanes Group to
significant concentrations of credit risk consist primarily of trade accounts
receivable and interest rate swaps. Details of Airplanes Group's interest rate
swaps are set out at (i) below.

     Credit risk with respect to trade accounts receivable is generally
diversified due to the number of lessees comprising Airplanes Group's customer
base and the different geographic areas in which they operate. At March 31,
2004, Airplanes Group owned 172 aircraft, 153 of which were on lease to 58
lessees in 35 countries, with 19 aircraft off-lease. The geographic
concentrations of leasing revenues is set out in Note 14.

     Many of Airplanes Group's lessees are in a relatively weak financial
position because of the difficult economic conditions in the civil aviation
industry as a whole, and because, in general, weakly capitalised airlines are
more likely to seek operating leases.

     The exposure of Airplanes Group to particular countries and customers is
managed partly through concentration limits provided for under the terms of the
notes and through obtaining security from lessees by way of deposits, letters of
credit and guarantees. Airplanes Group will continue to manage its exposure to
particular countries, regions and lessees through concentration limits. In the
normal course of its business Airplanes Group has reached agreements with
certain of its lessees to restructure their leases and defer certain receivable
balances. Details of accounts receivable, deferred balances and provision for
bad and doubtful debts are set out in Note 6.

     A Canadian lessee of six Airplanes Group aircraft which has been under the
protection of the Companies Creditors Arrangement Act (Canada) since March 2003,
resumed making payments to Airplanes Group in July 2003. The Servicer agreed on
a restructuring of the leases resulting in reduced rentals.

     Colombia has suffered economically as a result of the deterioration in the
value of the Colombian peso and the resulting negative impact on the Colombian
economy. As of March 31, 2004 Airplanes Group leased nine aircraft to two
lessees in Colombia. In particular, at March 31, 2004, Airplanes Group leased
six aircraft to one Colombian lessee which remains under chapter 11 bankruptcy
protection and which had been in arrears. The lessee concluded discussions with
the servicer regarding lease restructuring which resulted in rental reductions
combined with lease extensions.

     Airplanes Group's Brazilian lessees also continue to experience significant
difficulties due to over-capacity and adverse market conditions. At March 31,
2004, nine of Airplanes Group's aircraft were being operated by Brazilian
lessees. Restructuring arrangements have been agreed with certain of the
Brazilian lessees allowing for rescheduling of balances owing to Airplanes
Group.

     The commercial aviation industry in Asia had been adversely affected by the
severe economic and financial difficulties experienced in the region since
1998/1999 and more recently by the effects of the SARS virus which had resulted
in a significant drop in airline traffic both within and to the region but has
now largely recovered. At March 31, 2004, thirty of Airplanes Group's aircraft
were being operated by lessees in this region.

     (i) Fair Value of Financial Instruments

     SFAS 107 "Disclosures about Fair Value of Financial Instruments" defines
the fair value of a financial instrument as the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale. Fair values of financial instruments have been
determined with reference to available market information and the valuation
methodologies discussed below. However, considera-
                                       F-11
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

ble management judgement is required in interpreting market data to arrive at
estimates of fair values. Accordingly, the estimates presented herein may not be
indicative of the amounts that Airplanes Group could realise in a current market
exchange.

     (i)   The fair value of cash, trade receivables and trade payables
           approximates the carrying amount because of the nature and short
           maturity of these instruments.

     (ii)   The fair value of the class A, B, C and D notes issued by Airplanes
            Group outstanding at March 31, 2004 and 2003 was $1,148 million and
            $1,571 million (carrying value at March 31, 2004 and 2003 was $3,103
            million and $3,209 million) respectively. Although the estimated
            fair values of the class A to D notes outstanding have been
            determined by reference to prices as at March 31, 2004 provided by
            an independent third party, these fair values do not reflect the
            market value of these notes at a specific time and should not be
            relied upon as a measure of the value that could be realized by a
            noteholder upon sale. While the amount subscribed for the class E
            notes was based on the appraised value of the aircraft at the
            closing date, the fair value of these notes at March 31, 2004 cannot
            be determined, as it represents the holders' residual interest in
            the aircraft owned by Airplanes Group.

     (iii)  Airplanes Group manages its interest rate exposure through the use
            of interest rate swaps ("swaps") and in the past has also used
            options to enter into interest rate swaps ("swaptions"). At March
            31, 2004 and 2003 Airplanes Group had entered into interest rate
            swaps with an aggregate notional principal amount of $1.37 billion
            and $1.71 billion respectively. Under these swap arrangements
            Airplanes Group will pay fixed and receive floating amounts on a
            monthly basis. Before November 17, 2003, the primary objective of
            Airplanes Group's interest rate risk management policy was to
            correlate fixed and floating rate interest payments on the notes and
            certificates to the mix of contracted fixed and floating rental
            receipts for different rental periods. Since November 17, 2003,
            however, Airplanes Group has ceased paying interest on the class B
            notes and certificates (a floating rate obligation) and on the class
            C and D notes and certificates (both fixed rate obligations). During
            the year ended March 31, 2004, Airplanes Group has therefore
            reviewed and modified its hedging policy with the approval of the
            rating agencies and no longer enters into hedges of the class B
            notes and certificates. Airplanes Group believes it prudent to
            continue to hedge its interest rate exposure on the class A notes
            and certificates as the mix of fixed and floating rental receipts
            does not correlate to the floating payments due on the class A notes
            and certificates. Airplanes Group's cashflows have been insufficient
            to enable any funds to be allocated to the "Second Collection
            Account Top-up" in the priority of payments since December 15, 2003.
            Therefore, Airplanes Group has not included this balance in its
            hedging calculations since the end of 2003. The fair values of
            interest rate swaps are provided by third parties and are calculated
            by discounting expected cashflows using market interest rates over
            the remaining term of the relevant instrument. The fair value of
            these swaps at March 31, 2004 and 2003 was an unrealised loss of
            $52.5 million and an unrealised loss of $82.3 million respectively.

     Interest rate exposures which may arise in the event that lessees paying
fixed rate rentals default have in the past been managed in part through the
purchase of swaptions. At March 31, 2004 and 2003 Airplanes Group had no
swaptions in place.

     Airplanes Group is exposed to losses in the event of non-performance by
counterparties to interest rate swap agreements. However, Airplanes Group does
not anticipate non-performance by these counterparties.

     Counterparty risk is monitored on an ongoing basis. Counterparties are
subject to the prior approval of the directors of Airplanes Limited and the
controlling trustees of Airplanes Trust. Airplanes Group's counterparties at
March 31, 2004 comprise major U.S./European financial institutions.

                                       F-12
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

     (j) Foreign Currency Transactions

     Airplanes Group's foreign currency transactions are not significant as
virtually all revenues and most costs are denominated in U.S. dollars.

     (k) Derivative Instruments and Hedging Activities

     On April 1, 2001, Airplanes Group adopted SFAS 133, "Accounting for
Derivative Instruments and Certain Hedging Activities" and SFAS 138, "Accounting
for Certain Derivative Instruments and Certain Hedging Activities, an amendment
of SFAS 133." As a result, all derivatives are now recognized on the balance
sheet at their fair value. All derivatives are designated as either a hedge of
the fair value of a recognized asset or liability or of an unrecognized firm
commitment ("fair value" hedge), a hedge of a forecasted transaction or of the
variability of cashflows to be received or paid related to a recognized asset or
liability ("cashflow" hedge), a foreign-currency fair-value or cash-flow hedge
("foreign currency" hedge) or a "held for trading" instrument. At March 31, 2002
all of Airplanes Group's interest rate swaps were designated as cashflow hedges.

     Airplanes Group has a detailed hedging policy, which has been approved by
the board of directors of Airplanes Limited and controlling trustees of
Airplanes Trust and the rating agencies. As part of this hedging policy
Airplanes Group has formally documented all relationships between hedging
instruments and hedged items as well as its risk-management objective and
strategy for undertaking various hedge transactions.

     This process includes linking all derivatives that are designated as
cashflow hedges to specific liabilities on the balance sheet. Airplanes Group
formally assesses, both at the hedge's inception and on an ongoing basis,
whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in cashflows of hedged items.

     Changes in the fair value of a derivative that is highly effective and that
is designated and qualifies as a cash-flow hedge are included in "Net change in
cashflow hedges" in other comprehensive income ("OCI"), until earnings are
affected by the variability in cashflows of the designated hedged item.

     Hedge accounting is discontinued prospectively when it is determined that
the derivative is no longer highly effective in offsetting changes in the
cashflows of the hedged item, the derivative expires or is sold, terminated, or
exercised, or it is determined that designation of the derivative as a hedging
instrument is no longer appropriate. In all situations in which hedge accounting
is discontinued, the derivative will continue to be carried at its fair value on
the balance sheet, and any changes in its fair value will be recognized in
earnings. In all situations where derivatives are designated as trading
instruments, they are carried at fair value on the balance sheet and any changes
in fair value are recognized in earnings.

     As described more fully in Note 11, Airplanes Group's cashflows have been
inadequate to pay interest on the class B, C and D notes since the November 2003
payment date. Accordingly derivatives which have been documented as having a
hedging relationship with the interest payments on the class B notes and
certificates can no longer be classed as highly effective cashflow hedges, and
therefore the decrease in value of these derivatives for the year ended March
31, 2004 of $2.0 million has been recognized in earnings in accordance with SFAS
133. These derivatives continued to be a hedge of Airplanes Group's interest
rate exposure in respect of the class B notes and certificates until the date
interest ceased being paid. During the year ended March 31, 2004, Airplanes
Group has accordingly reviewed and modified its hedging policy as more fully
described in Note 4(i) above.

     The opening effect as at April 1, 2001 of the adoption of SFAS 133 was
$(38) million in other comprehensive income (i.e. if the swaps were sold then a
loss of $38 million would have resulted) and $5 million in earnings (being the
deferred gain on early termination of interest and related derivatives).
Airplanes Group's financial statements for the first quarter of 2002 reported
the net transition adjustment of $(33) million in other comprehensive income.
The net change in the value of cashflow hedges for the year ended March 31, 2002
was an increase of $2 million. It is anticipated that $33.7 million of net
losses included in accumulated other

                                       F-13
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

comprehensive loss at March 31, 2004 will be reclassified into earnings during
the year to March 31, 2005. At March 31, 2004, Airplanes Group held interest
rate swaps with a maximum maturity of 49 months to hedge its exposure to
interest rate risk.

     (l) Use of Estimates

     The preparation of 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.

     (m) New Pronouncements

     In January 2003, the FASB issued Interpretation No. 46 (or FIN 46),
"Consolidation of Variable Interest Entities" which requires a variable interest
entity to be consolidated by the primary beneficiary which is the entity subject
to a majority of the risk of loss from the variable interest entity's activities
or entitled to receive a majority of the entity's residual returns or both. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements of FIN
46 apply to older entities in the first fiscal year or interim period beginning
after December 15, 2003. Certain of the disclosure requirements apply to all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The adoption of FIN 46 did not have a
significant impact on Airplanes Group's financial statements.

     In April 2003, the FASB issued SFAS Statement No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities, which amends
FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, to address (1) decisions reached by the Derivatives Implementation
Group, (2) developments in other FASB projects that address financial
instruments, and (3) implementation issues related to the definition of a
derivative. Statement 149 has multiple effective date provisions depending on
the nature of the amendment to Statement 133, and Airplanes Group is currently
considering its potential effect on future financial statements.

     In May 2003, the FASB issued Statement of Financial Reporting Standards No.
150, Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity. SFAS 150 clarifies the accounting for certain financial
instruments with characteristics of both liabilities and equity and requires
that those instruments be classified as liabilities in statements of financial
position. Previously, many of those financial instruments were classified as
equity. SFAS 150 is effective for financial instruments entered into or modified
after May 31, 2003 and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. On November 7, 2003, FASB Staff
Position 150-3 was issued, which indefinitely deferred the effective date of
SFAS 150 for certain mandatory redeemable non-controlling interests. As
Airplanes Group does not have any of these financial instruments, the adoption
of SFAS 150 did not have any impact on Airplanes Group's financial statements.

5.   CASH

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Cash...............................................     135            6           77            6
                                                        ===          ===          ===          ===
</Table>

                                       F-14
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

5.   CASH -- (CONTINUED)

     Substantially all of the cash balances at March 31, 2004 and 2003 are held
for specific purposes under the terms of the Transaction. Included in the cash
balances at March 31, 2004 and 2003 is restricted cash of $6 million, which
guarantees former safe harbour lease obligations.

6.   ACCOUNTS RECEIVABLE

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Trade receivables..................................      30            7           19            4
Allowance for doubtful debts.......................     (14)          (6)          (8)          (1)
                                                        ---          ---          ---          ---
                                                         16            1           11            3
                                                        ===          ===          ===          ===
Included in trade receivables are deferred amounts
  as follows:-
  Gross deferred lease receivables.................      15            2           11            2
  Allowance for doubtful debts.....................     (11)          (2)          (4)          --
                                                        ---          ---          ---          ---
                                                          4           --            7            2
                                                        ===          ===          ===          ===
</Table>

     Deferred lease receivables at March 31, 2004 represent deferrals of rent,
maintenance and miscellaneous payments due from lessees. The most significant of
these lessees are located in Colombia and Brazil where the air transport sector
is suffering from substantial over capacity and the effects of difficult
economic conditions (see Note 4(h)).

     Receivables, before allowance for doubtful debts, include amounts
classified as due after one year of $13.8 million (Airplanes Limited $11.2
million and Airplanes Trust $2.6 million) at March 31, 2004 and $17.7 million
(Airplanes Limited $15.3 million and Airplanes Trust $2.4 million) at March 31,
2003.

     A number of Airplanes Group's lessees are in a weak financial position. As
of March 31, 2004, amounts outstanding for a period greater than 30 days in
respect of rental payments, maintenance reserves and other miscellaneous amounts
due under the leases (net of amounts in respect of default interest and cash in
transit) amounted to $3.6 million in respect of 15 lessees (who leased a
combined total of 53 aircraft representing 32.2% of the portfolio by appraised
value as of January 31, 2004) and $3.6 million in respect of five former
lessees. Of the total $7.2 million, $1.2 million was in arrears for a period
between 30 and 60 days, $0.7 million was in arrears for a period between 60 and
90 days and $5.3 million was in arrears for a period greater than 90 days. Some
of these lessees have consistently been significantly in arrears in their
respective rental payments and many are known to be currently experiencing
financial difficulties.

     As of March 31, 2004, in addition to the $7.2 million in respect of
payments past due more than 30 days, Airplanes Group had agreed to allow six
lessees to defer rent, maintenance and miscellaneous payments totaling $13.4
million for periods ranging from seven months for one lessee in respect of $0.1
million and up to 46 months for one lessee in respect of $4.1 million.

                                       F-15
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

7.   AMOUNTS DUE FROM AIRPLANES LIMITED TO AIRPLANES TRUST

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Amount receivable from Airplanes Limited/Payable to
  Airplanes Trust..................................     (58)          58          (45)          45
                                                        ===          ===          ===          ===
</Table>

     Included in the balance at March 31, 2003 and March 31, 2004 was $80
million payable from Airplanes Trust to Airplanes Limited in respect of aircraft
sales and purchases. The remaining balance of $125 million (2003: $138 million)
represents the net amount due to Airplanes Trust in respect of Airplanes Trust's
trading activities, including servicing of its debt obligations.

8.   NET INVESTMENT IN CAPITAL AND SALES TYPE LEASES

     The following are the components of the net investment in capital and
sales-type leases of Airplanes Limited:

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Total minimum lease payments receivable............       4           --            1           --
Estimated residual values of leased assets.........      --           --           --           --
Less unearned revenue..............................      (1)          --           --           --
                                                        ---          ---          ---          ---
Net investment in capital and sales-type leases....       3           --            1           --
                                                        ===          ===          ===          ===
</Table>

     Aggregate lease rentals in respect of such capital and sales type leases
for the years ended March 31, 2002, 2003 and 2004 amounted to $7 million,
(Airplanes Limited $7 million, Airplanes Trust $Nil), $4 million (Airplanes
Limited $4 million, Airplanes Trust $Nil) and $3 million (Airplanes Limited $3
million, Airplanes Trust $Nil) respectively.

     Unearned revenue of $0.4 million (Airplanes Limited $0.4 million, Airplanes
Trust $Nil), $0.3 million (Airplanes Limited $0.3 million, Airplanes Trust $Nil)
and $0.6 million (Airplanes Limited $0.6 million, Airplanes Trust $Nil) for the
years ended March 31, 2002, 2003 and 2004, respectively, was amortised and
included in revenue.

     At March 31, 2004, minimum future lease payments on finance leases are as
follows:

<Table>
<Caption>
                                                                    2004
                                                                ------------
                                                                ($ MILLIONS)
<S>                                                             <C>
Year Ending March 31, 2005..................................          1
                                                                    ---
                                                                      1
                                                                    ===
</Table>

                                       F-16
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

9.   AIRCRAFT

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
AIRCRAFT -- HELD FOR USE
Cost...............................................    4,006         304         3,378         222
Less impairment charge.............................     (319)        (49)         (489)        (71)
Less accumulated depreciation......................   (1,743)       (144)       (1,496)        (92)
                                                      ------        ----        ------        ----
                                                       1,944         111         1,393          59
                                                      ======        ====        ======        ====
AIRCRAFT -- HELD FOR SALE
Cost...............................................       --          --           561          69
Less impairment charge.............................       --          --          (164)        (15)
Less accumulated depreciation......................       --          --          (299)        (46)
                                                      ------        ----        ------        ----
                                                          --          --            98           8
                                                      ======        ====        ======        ====
FLEET ANALYSIS
On operating lease for a further period of:
  More than five years.............................      113          --           131          --
  From one to five years...........................    1,285          39           955          22
  Less than one year...............................      421          46           318          37
Non revenue earning aircraft:
  Available for lease..............................       83          26            87           8
  Available for lease, subject to letters of
     intent........................................       42          --            --          --
                                                      ------        ----        ------        ----
                                                       1,944         111         1,491          67
                                                      ======        ====        ======        ====
</Table>

     At March 31, 2004, six aircraft were subject to purchase options granted to
existing lessees. The latest date on which a purchase option could be exercised
was December 4, 2007.

<Table>
<Caption>
                                                           YEAR ENDED MARCH 31,
                                --------------------------------------------------------------------------
                                         2002                      2003                      2004
                                ----------------------    ----------------------    ----------------------
                                AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                 LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                ---------    ---------    ---------    ---------    ---------    ---------
                                     ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Depreciation expense..........     146          13           132           8           111           5
Impairment charge.............     245          47            74           2           335          38
                                   ---          --           ---          --           ---          --
                                   391          60           206          10           446          43
                                   ===          ==           ===          ==           ===          ==
</Table>

     At March 31, 2004, Airplanes Group owned 172 (2003:179) aircraft.

     At March 31, 2004, 19 aircraft were off-lease, five of which were subject
to letters of intent for sale. As of the date of these financial statements,
three of the aircraft subject to letters of intent for sale have been sold and
eight of the fourteen unplaced off-lease aircraft have become subject to letters
of intent for sale. Since March 31, 2004 a further three aircraft have become
off lease.

     During the last three years the world economic climate has been weak. The
global economic conditions combined with the terrorist attacks of September 11,
2001, the military action in Afghanistan, the war in Iraq and the outbreak of
SARS have resulted in a sharp increase in the availability of aircraft for
lease. This has led to significant overcapacity, increased downtime, a decline
in the lease rates, increased costs due to unanticipated

                                       F-17
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

9.   AIRCRAFT -- (CONTINUED)

redeliveries of aircraft all of which have resulted in a decline in the value of
aircraft, particularly older technology models.

     As of March 31, 2004, each of the B737-400, MD-83 and A320-200 models of
aircraft comprised more than 10% of Airplanes Group's portfolio by appraised
value as of January 31, 2004 and, in addition, each of the B737-300, B737-500,
B767-300ER, DC-8, MD-11 and F-100 models of aircraft comprised more than 5% of
Airplanes Group's portfolio by appraised value as of January 31, 2004.
Furthermore, at March 31, 2004, widebody aircraft comprised more than 15%, and
turboprop aircraft comprised more than 5% of Airplanes Group's portfolio by
appraised value as of January 31, 2004.

     During the years ended March 31, 2003 and March 31, 2004, Airplanes Group
evaluated all aircraft for impairment and this impairment analysis resulted in 8
and 64 aircraft, respectively, being identified with a carrying value greater
than the estimated undiscounted future cashflows for such aircraft. An
impairment loss was calculated for these aircraft based on the estimated
discounted future cashflows for each aircraft. For certain aircraft the
estimated discounted future cashflows were lower than the corresponding
independent appraised value. The appraised values were determined based on the
assumption that there is an "open unrestricted stable market environment with a
reasonable balance of supply and demand." Since this assumption is not
appropriate in current market conditions, in respect of each aircraft estimated
discounted cashflows were used as a more accurate indication of fair value.

10. ACCRUED EXPENSES AND OTHER LIABILITIES

<Table>
<Caption>
                                                                          MARCH 31,
                                                        ---------------------------------------------
                                                                2003                    2004
                                                        ---------------------   ---------------------
                                                        AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                                         LIMITED      TRUST      LIMITED      TRUST
                                                        ---------   ---------   ---------   ---------
                                                            ($ MILLIONS)            ($ MILLIONS)
<S>                                                     <C>         <C>         <C>         <C>
Accrued expenses and other liabilities include:
  Unearned revenue....................................        7          1            6         --
  Other accruals......................................       25         --           28          1
  Interest accrued....................................    1,864        184        2,527        249
  Valuation of swap portfolio.........................       75          7           47          5
  Trade payables......................................        3         --            2         --
  Deposits received...................................       29          1           29         --
                                                          -----        ---        -----        ---
                                                          2,003        193        2,639        255
                                                          =====        ===        =====        ===
Of which:
  Payable within one year.............................      117          8          118          7
  Payable after one year..............................    1,886        185        2,521        248
                                                          -----        ---        -----        ---
                                                          2,003        193        2,639        255
                                                          =====        ===        =====        ===
</Table>

                                       F-18
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11. INDEBTEDNESS

     The components of the debt are as follows:

<Table>
<Caption>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2003                      2004
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Indebtedness in respect of notes issued:
  Subclass A-6.....................................      174          17            88           9
  Subclass A-8.....................................      638          62           638          62
  Subclass A-9.....................................      683          67           683          67
  Class B..........................................      219          22           207          20
  Class C..........................................      320          30           320          30
  Class D..........................................      360          35           360          35
  Class E..........................................      538          53           538          53
                                                       -----         ---         -----         ---
                                                       2,932         286         2,834         276
  Discounts/costs arising on issue of notes........       (8)         (1)           (6)         (1)
                                                       -----         ---         -----         ---
                                                       2,924         285         2,828         275
                                                       =====         ===         =====         ===
</Table>

DEBT MATURITY

     The repayment terms of the class A, B, C and D notes are such that certain
principal amounts were expected to be repaid on certain dates based on certain
assumptions (each such date, the "expected final payment date") or refinanced
through the issue of new notes by specified expected final payment dates but in
any event are ultimately due for repayment on specified final maturity dates
(each such date, the "final maturity date"). The expected final payment dates,
final maturity date, principal amount and interest rates applicable to each
class of note are set out below:

<Table>
<Caption>
                           INTEREST      PRINCIPAL AMOUNT     EXPECTED FINAL           FINAL
CLASS/SUBCLASS OF NOTES      RATES       AT MARCH 31, 2004     PAYMENT DATE*       MATURITY DATE
-----------------------  -------------   -----------------   -----------------     --------------
                                           ($ MILLIONS)
<S>                      <C>             <C>                 <C>                   <C>
Subclass A-6...........  (LIBOR+.34%)             97         January 15, 2004      March 15, 2019
Subclass A-8...........  (LIBOR+.375%)           700         March 15, 2003        March 15, 2019
Subclass A-9...........  (LIBOR+.55%)            750         November 15, 2008     March 15, 2019
Class B................  (LIBOR+.75%)            227         February 15, 2017     March 15, 2019
Class C................  8.15%                   350         December 15, 2013     March 15, 2019
Class D................  10.875%                 395         February 15, 2017     March 15, 2019
Class E................  See below               591         See below             See below
                                               -----
                                               3,110
                                               =====
</Table>

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

* the expected final payment dates were determined in March 2001 based on the
  base case assumptions in Airplanes Group's offering memorandum dated March 15,
  2001 (the "2001 Base Case").

     Discounts on notes issues and costs arising on refinanced notes are netted
against debt on the balance sheet. These amounts are accreted to the income
statement over the expected life of the refinancing notes.

     On March 15, 2001, Airplanes Group successfully completed a $750 million
refinancing of its subclass A-4 and subclass A-7 notes into new subclass A-9
notes.

     The dates on which principal repayment on the notes will actually occur
will depend on the cash generated by Airplanes Group. Airplanes Group was due to
refinance the subclass A-8 notes in the capital markets on
                                       F-19
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11. INDEBTEDNESS -- (CONTINUED)

March 15, 2003. Given market conditions and the impact these conditions have had
on Airplanes Group's performance as compared to the 2001 Base Case, a
refinancing was not economically viable. In the absence of a refinancing of the
subclass A-8 notes, step-up interest at a rate of 0.5% per annum became payable
from March 15, 2003. The expected final payment date for the subclass A-8 notes
under the 2001 Base Case has thus proved incorrect. Due to insufficient
cashflows and the low priority of step-up interest in the priority of payments,
no step-up interest has been paid and it is not expected to be paid in the
future.

     LIBOR on the class A and class B notes equates to the London interbank
offered rate for one month U.S. dollar deposits.

     Interest on the class C and class D fixed rate notes is calculated on the
basis of a 360-day year, consisting of twelve 30-day months.

     The class E notes accrue interest for each interest accrual period at a
rate of 20% per annum. The stated interest rate on the class E notes is adjusted
by reference to the U.S. consumer price index. Except for the class E note
minimum interest amount plus the class E note supplemental interest amount, each
of which are paid at a rate of 1% and 10% multiplied by the outstanding
principal balance of the class E notes, respectively, no interest will be
payable on the class E notes until all of the interest, principal and premium,
if any, on the notes have been repaid in full. The principal on the class E
notes will be repaid, subject to adequate funds being available, after the
interest on the class E notes.

     In general the priority of the principal payments on the notes is as set
out below:

     1.    Specified minimum principal amounts on the class A and the class B
           notes in that order.

     2.    Additional amounts on the class A notes in the event that the value
           of the portfolio falls below specified amounts.

     3.    Scheduled principal repayments on the class C and class D notes in
           that order.

     4.    Specified additional amounts on the class B notes and the class A
           notes in that order.

     5.    Thereafter cash available to repay the principal on the notes is
           applied on each payment date to repay the outstanding principal on
           the class D notes, the class C notes, the class B notes and the class
           A notes in that order.

     Prior to March 15, 2003, on each payment date the priority of the principal
amounts outstanding in respect of the various subclasses of class A notes was
subclass A-6, subclass A-9 and subclass A-8 in that order. Because there was no
refinancing of the subclass A-8 notes by March 15, 2003, the priority of the
principal amounts outstanding in respect of the various subclasses of class A
notes is now, subclass A-6, subclass A-8 and subclass A-9 in that order.

     The concentration on particular models or types of aircraft magnifies the
adverse impact to Airplanes Group's cashflow of a decline in lease rates or
aircraft values for these models or types of aircraft and of specific
governmental or technical regulations imposed on those aircraft types. In this
connection, Airplanes Group has seen (x) decreasing popularity of the turboprop
aircraft, the cessation of production of MD-83s and MD-11s, the reduction in
demand for B767s including in particular B767s powered by Pratt & Whitney
engines, and the bankruptcy of Fokker, (y) noise regulations restricting the use
of Stage 2 aircraft which, as of March 31, 2004, accounted for approximately
1.42% of Airplanes Group's portfolio by appraised value as of January 31, 2004,
and (z) Airworthiness Directives ("ADs") with respect to the MD-80s, MD-11s and
B737s. These events have caused, and are likely to continue to cause, overall
lease rates and aircraft values to significantly decrease and may cause
Airplanes Group to incur significant costs which would further reduce its
cashflow.

                                       F-20
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11. INDEBTEDNESS -- (CONTINUED)

     Administrative and lease expenses and certain other payments in the
ordinary course of business are senior to the notes in priority of payment and
are therefore payable before any payments are made on the notes (and thus the
corresponding certificates).

Class A principal adjustment amount

     As a result of Airplanes Group's low revenues and a greater than assumed
decline in the appraised value of the aircraft in its portfolio, Airplanes Group
has been required to pay class A principal adjustment amount to the extent of
available cashflows in order to maintain certain loan to current appraised value
ratios on the class A notes. Airplanes Group has not always had sufficient
cashflows to pay class A principal adjustment amount in full and since the April
15, 2003 payment date, Airplanes Group has not had sufficient cashflows to pay
any class A principal adjustment amount, resulting in accumulating arrears. In
the year to January 31, 2004, there has been a decline of 15.21% in the
appraised value of Airplanes Group's fleet, being $176 million greater than the
decline assumed in setting the payment schedules on Airplanes Group's notes.
This has resulted in an increase in the arrears of class A principal adjustment
amount from $343.5 million to $451.2 million at February 17, 2004 (the first
payment date following the 2004 appraisals).

     Class A principal adjustment amount ranks ahead of scheduled principal
payments on the class C and D notes. If, on any payment date, Airplanes Group
was unable to make payment in full of class A principal adjustment amount, then
by definition Airplanes Group was unable to make any scheduled principal
payments on the class C and D notes. Between February 1999 and March 2000,
Airplanes Group was unable to make some scheduled principal payments on the
class C and D notes and since April 2000 Airplanes Group has not paid any
scheduled principal on the class C and D notes (or paid any minimum interest on
the class E notes) which continues to be deferred.

Class A minimum principal amount

     To the extent that Airplanes Group has sufficient available funds,
Airplanes Group is also required to pay a minimum principal amount on the class
A notes in order to maintain certain loan to initial appraised value ratios.
(Since class A minimum principal amount is determined by reference to initial
appraised values, it is unaffected by the annual appraisals referred to above.)
As a result of earlier payments of class A principal adjustment amount described
above Airplanes Group remained ahead of the required class A minimum principal
payment schedule. However as described above, Airplanes Group has not always had
sufficient cashflows to pay class A principal adjustment amount in full and
since the April 15, 2003 payment date, Airplanes Group has not had sufficient
cashflows to pay any class A principal adjustment amount. As a result, since the
August 15, 2003 payment date, Airplanes Group has no longer been ahead of the
required class A minimum principal payment schedule. Therefore on that date
Airplanes Group had to recommence payments of minimum principal on the class A
notes to the extent of available cashflows and was unable to fund the "Second
Collection Account Top-up" in full. Beginning on the December 15, 2003 payment
date Airplanes Group's cashflows were insufficient to allocate any funds at all
to the "Second Collection Account Top-up" or to pay minimum principal on the
class A notes in full. Minimum principal arrears on the class A notes were $24.3
million following the May 17, 2004 payment date. Since minimum principal on the
class A notes ranks ahead of interest and minimum principal on the class B notes
and interest on the class C and D notes in the priority of payments, Airplanes
Group's cashflows have been inadequate to pay any interest or minimum principal
on the class B notes or any interest on the class C and D notes, since the
December 15, 2003 payment date.

Class B, C and D notes

     It is highly unlikely that Airplanes Group will ever be able to resume
making payments of interest or principal on the class B, C and D notes. Given
the failure to pay interest when due on these notes beginning on the December
15, 2003 payment date, interest has begun to accrue on the unpaid interest in
accordance with the

                                       F-21
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11. INDEBTEDNESS -- (CONTINUED)

terms of the notes and will continue to accrue until all interest arrears are
paid in full. Since interest (and minimum principal) on the class A notes is
payable prior to payment of interest and minimum/scheduled principal on the
class B, C and D notes (and all other amounts of principal on the class B, C and
D notes), available cashflows will be used first to service interest and, to the
extent possible, minimum principal on the class A notes. The minimum principal
arrears on the class A notes on each payment date have been and will continue to
be carried over to the next payment date causing the amount payable to increase
over time, making it more difficult to make payments in full. Even if cash were
available at any subsequent time to make payments ranking below class A minimum
principal, cashflows would first be used to pay interest on the class B notes,
which would then include all the accrued interest from the period when no
payments were made on these notes. Thus the likelihood of remaining cashflows
over the life of Airplanes Group being sufficient to resume any payments of
class B principal or any payments of interest or principal on the class C and,
ultimately, the class D notes is even further diminished.

     If Airplanes Group was able to resume making payments on the class B, C and
D notes, payments would be made according to the priority of payments,
commencing with the then most senior class and only making payments on more
junior classes to the extent of available cashflows. The more junior the class
of notes is in the order of priority, the greater the risk that Airplanes Group
would be unable to make further payments on that class of notes. Failure to make
payments on a class of notes results in failure to make payments on the
corresponding class of certificates.

     This vulnerability of the various classes of notes has been reflected in
actions taken by the rating agencies which continued to re-evaluate several
structured aircraft financings in the last twelve months.

     Set out in the table below are the ratings of Airplanes Group's
certificates at June 14, 2004:-

<Table>
<Caption>
                                                              OUTSTANDING
                                                               PRINCIPAL
                                                              BALANCE AS
                                                              AT MAY 17,                    MOODY'S (S&P
CERTIFICATE                                                      2004       S & P   FITCH    EQUIVALENT)
-----------                                                   -----------   -----   -----   -------------
<S>                                                           <C>           <C>     <C>     <C>
Subclass A-6................................................    $ 74.5m     AA-     BBB-    A2 (A)
Subclass A-8................................................    $700.0m     A       BB      Baa3 (BBB-)
Subclass A-9................................................    $750.0m     BB+     BB      Ba2 (BB)
Class B.....................................................    $226.8m     D       CCC     Caa2 (CCC)
Class C.....................................................    $349.8m     D       CCC     Caa3 (CCC-)
Class D.....................................................    $395.1m     D       CC      Ca (CC)
</Table>

     Given the continuing difficulties in the aircraft industry and their impact
on the factors which determine Airplanes Group's revenues, there can be no
assurance that the rating agencies will not further downgrade any class of
Airplanes Group's certificates.

     The ratings of the certificates address the likelihood of the timely
payment of interest and the ultimate payment of principal and premium, if any,
on the certificates. A rating is not a recommendation to buy, sell or hold
certificates because ratings do not comment as to market price or suitability
for a particular investor. A rating may be subject to revision, suspension or
withdrawal at any time by the assigning rating agency.

                                       F-22
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

12. PROVISION FOR MAINTENANCE

<Table>
<Caption>
                                                                          MARCH 31,
                                                        ---------------------------------------------
                                                                2003                    2004
                                                        ---------------------   ---------------------
                                                        AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                                         LIMITED      TRUST      LIMITED      TRUST
                                                        ---------   ---------   ---------   ---------
                                                            ($ MILLIONS)            ($ MILLIONS)
<S>                                                     <C>         <C>         <C>         <C>
Balance at April, 1...................................     246         11          262         13
Receivable during year................................      61          5           50          7
Expenditure/transfers.................................     (45)        (3)         (38)        (7)
                                                           ---         --          ---         --
Balance at March, 31..................................     262         13          274         13
                                                           ===         ==          ===         ==
</Table>

     The reserve for maintenance includes maintenance reserve funds received
from lessees and provisions to cover the directors' estimate of maintenance
costs where Airplanes Group has the primary obligation for maintenance.

13. SHARE CAPITAL

<Table>
<Caption>
                                                                 AIRPLANES
                                                                  LIMITED
                                                                 MARCH 31,
                                                              ---------------
                                                               2003     2004
                                                              ------   ------
                                                                    ($)
<S>                                                           <C>      <C>
Ordinary shares, par value $1
Authorised 10,000...........................................  10,000   10,000
                                                              ======   ======
Issued 30...................................................      30       30
                                                              ======   ======
</Table>

     The holders of the issued ordinary shares are entitled to an annual
cumulative preferential dividend of $4,500. As Airplanes Limited does not have
distributable profits, this dividend has not been paid. As at March 31, 2004,
the total unpaid cumulative preferential dividend amounted to $36,000.

                                       F-23
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

14. REVENUES

     The following table sets forth the amount and percentage of total revenues
attributable to the indicated geographic areas based on each airline's principal
place of business for the years indicated:

<Table>
<Caption>
                                                             YEAR ENDED MARCH 31,
                                     ---------------------------------------------------------------------
                                             2002                    2003                    2004
                                     ---------------------   ---------------------   ---------------------
                                     AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                      LIMITED      TRUST      LIMITED      TRUST      LIMITED      TRUST
                                     ---------   ---------   ---------   ---------   ---------   ---------
                                         ($ MILLIONS)            ($ MILLIONS)            ($ MILLIONS)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
The distribution of revenues by
  geographic area is as follows:
  Europe...........................     126           1         110           2          93           2
  North America....................      59          27          60          19          19          13
  South America....................     132          --         106          --          58           1
  Asia/rest of world...............      70          --          75          --          83           1
                                        ---         ---         ---         ---         ---         ---
                                        387          28         351          21         253          17
                                        ===         ===         ===         ===         ===         ===
Of which, aircraft sales revenue to
  third parties represents.........      (5)         --         (14)         --          (3)         --
                                        ---         ---         ---         ---         ---         ---
Leasing revenue....................     382          28         337          21         250          17
                                        ---         ---         ---         ---         ---         ---
Of which, maintenance revenue
  represents.......................      53           1          61           5          50           7
                                        ===         ===         ===         ===         ===         ===
</Table>

     As of March 31, 2004, in addition to the 14 aircraft which were off lease
and not subject to a letter of intent there were 43 aircraft which were
scheduled to come off lease within one year from March 31, 2004.

     At March 31, 2004, Airplanes Group had contracted to receive the following
minimum rentals under operating leases:

<Table>
<Caption>
                                                                         2004
                                                                ----------------------
                                                                AIRPLANES    AIRPLANES
                                                                 LIMITED       TRUST
                                                                ---------    ---------
                                                                     ($ MILLIONS)
<S>                                                             <C>          <C>
Year ending March 31,
  2005......................................................       161            6
  2006......................................................       117            2
  2007......................................................        73            2
  2008......................................................        46            1
  2009......................................................        22            1
  Thereafter................................................        13            1
                                                                   ---          ---
                                                                   432           13
                                                                   ===          ===
</Table>

     Contracted rentals are based on actual rates up to the first recalculation
date, and thereafter are based on a budget LIBOR of 1.7%, and include aircraft
subject to letters of intent to lease.

     Each of Airplanes Limited and Airplanes Trust operates in one business
segment, the leasing of aircraft.

     For Airplanes Limited, no customer accounted for more than 10% of revenue
in any of the years ended March 31, 2002, 2003 or 2004 respectively. For
Airplanes Trust: (a) three lessees accounted for more than 10% of leasing
revenue for the year ended March 31, 2002, and individually these lessees
accounted for 34%, 10% and 11% of leasing revenue, respectively (b) two lessees
accounted for more than 10% of leasing revenue in the year ended March 31, 2003
and individually these lessees accounted for 25% and 60% of leasing revenue,

                                       F-24
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

14. REVENUES -- (CONTINUED)

respectively, (c) three lessees accounted for more than 10% of leasing revenue
for the year ended March 31, 2004 and individually these lessees accounted for
11%, 23% and 33% of leasing revenue, respectively.

15. NET INTEREST EXPENSE

<Table>
<Caption>
                                                             YEAR ENDED MARCH 31,
                                     ---------------------------------------------------------------------
                                             2002                    2003                    2004
                                     ---------------------   ---------------------   ---------------------
                                     AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                      LIMITED      TRUST      LIMITED      TRUST      LIMITED      TRUST
                                     ---------   ---------   ---------   ---------   ---------   ---------
                                         ($ MILLIONS)            ($ MILLIONS)            ($ MILLIONS)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
Interest on notes issued...........     565          55         663          65         780          76
Interest income....................      (6)         --          (3)         --          (2)         --
                                        ---         ---         ---         ---         ---         ---
                                        559          55         660          65         778          76
                                        ===         ===         ===         ===         ===         ===
Cash paid in respect of interest...     169          17         162          17         116          11
                                        ===         ===         ===         ===         ===         ===
</Table>

16. OTHER LEASE COSTS

<Table>
<Caption>
                                                             YEAR ENDED MARCH 31,
                                     ---------------------------------------------------------------------
                                             2002                    2003                    2004
                                     ---------------------   ---------------------   ---------------------
                                     AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                      LIMITED      TRUST      LIMITED      TRUST      LIMITED      TRUST
                                     ---------   ---------   ---------   ---------   ---------   ---------
                                         ($ MILLIONS)            ($ MILLIONS)            ($ MILLIONS)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
Maintenance receipts from lessees,
  transferred to reserves..........      53           1          61           5          50           7
Net release of excess maintenance
  reserves.........................      --          --          (4)         (2)        (12)         --
Other lease costs..................      17           2          16           1          36           1
                                        ---         ---         ---         ---         ---         ---
                                         70           3          73           4          74           8
                                        ===         ===         ===         ===         ===         ===
</Table>

17. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<Table>
<Caption>
                                                             YEAR ENDED MARCH 31,
                                     ---------------------------------------------------------------------
                                             2002                    2003                    2004
                                     ---------------------   ---------------------   ---------------------
                                     AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                      LIMITED      TRUST      LIMITED      TRUST      LIMITED      TRUST
                                     ---------   ---------   ---------   ---------   ---------   ---------
                                         ($ MILLIONS)            ($ MILLIONS)            ($ MILLIONS)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
GECAS management fees..............      22           2          23           1          23           1
Other selling, general and
  administrative expenses..........      11           1           8           1          12           1
                                        ---         ---         ---         ---         ---         ---
                                         33           3          31           2          35           2
                                        ===         ===         ===         ===         ===         ===
</Table>

     In the year ended March 31, 2004, other selling, general and administrative
expenses included an amount of $6 million (Airplanes Limited $5 million,
Airplanes Trust $1 million) payable to debis in respect of administration and
cash management fees as compared to the amount of $6 million (Airplanes Limited
$5 million, Airplanes Trust $1 million) payable in the year ended March 31, 2003
and $10 million (Airplanes Limited $9 million, Airplanes Trust $1 million)
payable in the year ended March 31, 2002.

                                       F-25
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

18. PROVISION FOR INCOME TAXES

     References to Airplanes Limited and Airplanes Trust in the context of this
note refer to the underlying taxable entities of Airplanes Limited (primarily
Irish entities) and Airplanes Trust (primarily U.S. entities).

(A)  AIRPLANES LIMITED

     Income tax benefit of Airplanes Limited consists of the following:

<Table>
<Caption>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              2002    2003    2004
                                                              -----   -----   -----
                                                                  ($ MILLIONS)
<S>                                                           <C>     <C>     <C>
Current income tax..........................................    --      --      --
Deferred income tax.........................................    42       3      13
                                                               ---     ---     ---
                                                                42       3      13
                                                               ===     ===     ===
</Table>

     Airplanes Limited's income from approved activities in Ireland is taxable
at a rate of 10% until December 31, 2005. Thereafter income from trading
activities will be taxable at a rate of 12.5%.

     A reconciliation of differences between actual income tax benefit of
Airplanes Limited for 2002, 2003 and 2004 and the expected tax benefit based on
a tax rate of 10% is shown below:

<Table>
<Caption>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              2002    2003    2004
                                                              -----   -----   -----
                                                                  ($ MILLIONS)
<S>                                                           <C>     <C>     <C>
Tax benefit at tax rate.....................................    86      59      72
Non-deductible class E note interest........................   (44)    (56)    (72)
Release of deferred tax.....................................    --      --      13
                                                               ---     ---     ---
Actual tax credit...........................................    42       3      13
                                                               ===     ===     ===
</Table>

     Class E note interest is not deductible for tax purposes in Ireland.

     Airplanes Limited has net operating loss carryforwards of approximately
$1,864 million as of March 31, 2004, (2003: $1,914 million) which are available
for offset against future taxable income with no restrictions to expiration.

     The deferred tax assets and liabilities of Airplanes Limited are summarised
below:

<Table>
<Caption>
                                                               MARCH 31,
                                                              ------------
                                                              2003    2004
                                                              ----    ----
                                                              ($ MILLIONS)
<S>                                                           <C>     <C>
Deferred tax assets relating to:
  Net operating loss carryforwards..........................  (239)   (233)
Deferred tax liability relating to:
  Aircraft..................................................   219     146
                                                              ----    ----
Net deferred tax............................................   (20)    (87)
Deferred tax assets not recognised..........................    33      87
                                                              ----    ----
Deferred tax provision......................................    13      --
                                                              ====    ====
</Table>

     No deferred tax provision is being recognised in the accounts at March 31,
2004 as it was deemed unnecessary due to the level of losses forward and
additional forecasted losses.

                                       F-26
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

18. PROVISION FOR INCOME TAXES -- (CONTINUED)

(B)  AIRPLANES TRUST

     Income tax benefit/(expense) of Airplanes Trust consists of the following:

<Table>
<Caption>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              2002    2003    2004
                                                              -----   -----   -----
                                                                  ($ MILLIONS)
<S>                                                           <C>     <C>     <C>
Current income tax:
  Federal...................................................     5      --       5
  State.....................................................    --      --      --
                                                               ---     ---     ---
Total current...............................................     5      --       5
                                                               ---     ---     ---
Deferred income tax:
  Federal...................................................    12       4      (2)
  State.....................................................     5       1       1
Decrease in valuation allowance.............................    --      --      --
                                                               ---     ---     ---
Total deferred..............................................    17       5      (1)
                                                               ---     ---     ---
                                                                22       5       4
                                                               ===     ===     ===
</Table>

     A reconciliation of differences between actual income tax benefit of
Airplanes Trust for 2002, 2003 and 2004 and the expected tax benefit based on
the U.S. federal statutory tax rate of 35% in 2002, 2003 and 2004 is shown
below:

<Table>
<Caption>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              2002    2003    2004
                                                              -----   -----   -----
                                                                  ($ MILLIONS)
<S>                                                           <C>     <C>     <C>
Tax benefit at statutory rate...............................    32      21      38
State taxes, net of federal.................................     3       1      --
Non-deductible class E note interest........................   (13)    (17)    (22)
Write-off of NOL's..........................................    --      --     (12)
                                                               ---     ---     ---
                                                                22       5       4
                                                               ===     ===     ===
</Table>

     Airplanes Trust has federal and state net operating loss (NOL)
carryforwards of approximately $73.7 million as of March 31, 2004 (2003: $100.2
million). Due to an ownership change in November 1998, $4.5 million of Airplanes
Trust's aforementioned federal NOL's became limited under Section 382 of the
Internal Revenue Code of 1986, as amended (Section 382). Under Section 382,
NOL's will generally be limited annually to the product of the long-term
tax-exempt rate (published monthly by the Service) and the value of the AeroUSA
Inc. outstanding stock immediately before the ownership change (excluding
certain capital contributions). However, the Section 382 limitation for a
taxable year any portion of which is within the five-year period following the
effective date (November 20, 1998) will be increased by the amount of any
"recognized built-in gains" for such tax year (subject to certain limitations).
With the lapsing of the five-year period to recognize built-in gains on November
2003, Airplanes Trust determined that $37.4 million in NOL's would never be
realized and has thus written off the NOL's.

                                       F-27
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

18. PROVISION FOR INCOME TAXES -- (CONTINUED)

     Deferred tax assets and liabilities of Airplanes Trust are summarised
below:

<Table>
<Caption>
                                                               YEAR ENDED
                                                                MARCH 31,
                                                              -------------
                                                              2003    2004
                                                              -----   -----
                                                              ($ MILLIONS)
<S>                                                           <C>     <C>
Deferred tax assets relating to:
  Net operating loss carryforwards..........................    41      28
  Other.....................................................     2      --
                                                               ---     ---
                                                                43      28
                                                               ---     ---
Deferred tax liabilities relating to:
  Aircraft..................................................    44      25
  AMT NOL Liability.........................................    17      22
                                                               ---     ---
                                                                61      47
                                                               ---     ---
Net deferred tax liability..................................    18      19
                                                               ===     ===
</Table>

     Based on Airplanes Trust's consideration, given the reversal of deferred
tax liabilities and available tax planning strategies, a valuation allowance for
deferred tax assets was not considered necessary at March 31, 2004 and 2003
respectively. Pursuant to a tax sharing agreement between Airplanes Trust and
debis, Airplanes Trust is liable to debis for its share of the consolidated tax
liability in years subsequent to the completion of the Transaction, in which
Airplanes Trust generates taxable income. However, Airplanes Trust shall satisfy
this liability in cash only to the extent that payments due to tax authorities
from debis are attributable to Airplanes Trust's share of the consolidated tax
liability; the remainder will be paid in the form of subordinated notes.
Conversely, Airplanes Trust is entitled to be reimbursed by debis for any tax
benefits provided subsequent to the completion of the Transaction, to debis from
Airplanes Trust's tax losses. debis has also indemnified Airplanes Trust for any
tax liabilities of AeroUSA, Inc. (a subsidiary of Airplanes Trust) that relate
to tax years prior to the completion of the Transaction.

     Subsequent to November 20, 1998, AeroUSA, Inc. and AeroUSA 3, Inc. now file
consolidated United States federal tax returns and certain local tax returns
with General Electric Company ("GE"), such returns being filed on a calendar
basis. In addition, on November 20, 1998, Airplanes Trust entered into a tax
sharing agreement with GE which is substantially similar to the tax sharing
agreement between Airplanes Trust and debis which was in place prior to that
date and which terminated on November 20, 1998, except with respect to those
provisions relating to the position prior to the date on which AeroUSA, Inc. and
AeroUSA 3, Inc. were deconsolidated from debis AirFinance, Inc.

     In relation to the tax year ended December 31, 2003, GE utilized $27.1
million of current year losses. Accordingly there will be a cash payment of $5.4
million to Airplanes Group under the terms of this agreement in relation to the
tax year ended December 31, 2003.

19. COMMITMENTS

CAPITAL COMMITMENTS

     Airplanes Group did not have any material contractual commitments for
capital expenditures at March 31, 2004.

                                       F-28
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

20. CONTINGENT ASSETS/LIABILITIES

GUARANTEES

     Airplanes Limited and Airplanes Trust have unconditionally guaranteed each
others' obligations under all classes of notes (as disclosed in Note 11) issued
by Airplanes Trust and Airplanes Limited, respectively, pursuant to the
Transaction, details of which are set out in Note 1.

FOREIGN TAXATION

     The international character of Airplanes Group's operations gives rise to
some uncertainties with regard to the impact of taxation in certain countries.
The position is kept under continuous review and Airplanes Group provides for
all known liabilities. See note 18 for tax warranties.

CONTINGENT ASSET

     During the year ended March 31, 2004, the servicer agreed to the early
redelivery of six aircraft from two Brazilian lessees. Following redelivery, a
settlement agreement in respect of the lessees' obligations was signed with both
lessees. These agreements provide for the payment to Airplanes Group of $31.8
million over five years which represents unpaid rentals for the unexpired
portion of the leases and certain technical costs. Due to uncertainties about
the lessees' ability to meet these obligations, these amounts have not been
recognised in the financial statements.

21. POST BALANCE SHEET EVENTS

     Since March 31, 2004, three DC8-71F aircraft and one B737-200A aircraft
have been sold, a contract for sale has been signed for one B737-200A and
letters of intent for sale have been signed in respect of ten further aircraft
which, in the case of five such aircraft, remain subject to approval by the
board of directors of Airplanes Limited or the controlling trustees of Airplanes
Trust as applicable.

                                       F-29
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Airplanes U.S. Trust has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
                                          AIRPLANES U.S. TRUST

                                          By:      /s/ WILLIAM M. MCCANN
                                            ------------------------------------
                                            Name: William M. McCann
                                            Title:  Controlling Trustee

Dated: June 14, 2004

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on June 14, 2004.

<Table>
<Caption>
                    SIGNATURE                                            TITLE
                    ---------                                            -----
<C>                                                <S>
               /s/ HUGH R. JENKINS                 Controlling Trustee (principal executive officer)
-------------------------------------------------
                 Hugh R. Jenkins

               /s/ ROY M. DANTZIC                  Controlling Trustee (principal financial officer)
-------------------------------------------------
                 Roy M. Dantzic

              /s/ WILLIAM M. MCCANN                Controlling Trustee (principal accounting officer)
-------------------------------------------------
                William M. McCann

             /s/ RICHARD E. CAVANAGH               Controlling Trustee
-------------------------------------------------
               Richard E. Cavanagh

               /s/ BRIAN T. HAYDEN                 Controlling Trustee
-------------------------------------------------
                 Brian T. Hayden
</Table>
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Airplanes Limited has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                          AIRPLANES LIMITED

                                          By:      /s/ WILLIAM M. MCCANN
                                            ------------------------------------
                                            Name: William M. McCann
                                            Title:  Director

Dated: June 14, 2004

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on June 14, 2004.

<Table>
<Caption>
                         SIGNATURE                                            TITLE
                         ---------                                            -----
<C>                                                          <S>
                    /s/ HUGH R. JENKINS                      Director (principal executive officer)
-----------------------------------------------------------
                      Hugh R. Jenkins

                    /s/ ROY M. DANTZIC                       Director (principal financial officer)
-----------------------------------------------------------
                      Roy M. Dantzic

                   /s/ WILLIAM M. MCCANN                     Director (principal accounting officer)
-----------------------------------------------------------
                     William M. McCann

                  /s/ RICHARD E. CAVANAGH                    Director
-----------------------------------------------------------
                    Richard E. Cavanagh

                    /s/ BRIAN T. HAYDEN                      Director
-----------------------------------------------------------
                      Brian T. Hayden
</Table>
<PAGE>

                                 CERTIFICATION

     I, William M. McCann, the Chairman of the Board of Directors of Airplanes
Limited and Chairman of the Controlling Trustees of Airplanes U.S. Trust,
certify that:

     (1)   I have reviewed this annual report on Form 10-K of Airplanes Limited
           and Airplanes U.S. Trust;

     (2)   Based on my knowledge, this annual report does not contain any untrue
           statement of a material fact or omit to state a material fact
           necessary to make the statements made, in light of the circumstances
           under which such statements were made, not misleading with respect to
           the period covered by this annual report;

     (3)   Based on my knowledge, the financial statements, and other financial
           information included in this annual report, fairly present in all
           material respects the financial condition, results of operations and
           cashflows of Airplanes Limited and Airplanes U.S. Trust as of, and
           for, the periods presented in this annual report;

     (4)   I am responsible for establishing and maintaining disclosure controls
           and procedures (as defined in Exchange Act Rules 13a-15(e) and
           15d-15(e)) for Airplanes Limited and Airplanes U.S. Trust and I have:

        (a)   designed such disclosure controls and procedures or caused such
              disclosure controls and procedures to be designed under my
              supervision, to ensure that material information relating to
              Airplanes Limited and Airplanes U.S. Trust, including their
              consolidated subsidiaries, is made known to the Board of Directors
              of Airplanes Limited and the Controlling Trustees of Airplanes
              U.S. Trust by others within those entities, particularly during
              the period in which this annual report is being prepared;

        (b)   [Reserved]

        (c)   evaluated the effectiveness of the disclosure controls and
              procedures of Airplanes Limited and Airplanes U.S. Trust and
              presented in this annual report my conclusions about the
              effectiveness of the disclosure controls and procedures as of the
              end of the period covered by this annual report based on such
              evaluation; and

        (d)   disclosed in this annual report any change in the internal control
              over financial reporting of Airplanes Limited and Airplanes U.S.
              Trust that occurred during the most recent fiscal quarter that has
              materially affected, or is reasonably likely to materially affect
              the internal control over financial reporting of Airplanes Limited
              or Airplanes U.S. Trust;

     (5)   I have disclosed, based on my most recent evaluation, to the auditors
           of Airplanes Limited and Airplanes U.S. Trust and the audit committee
           of the Board of Directors of Airplanes Limited and the Controlling
           Trustees of Airplanes U.S. Trust:

        (a)   all significant deficiencies and material weaknesses in the design
              or operation of internal controls over financial reporting which
              are likely to affect the ability of Airplanes Limited and
              Airplanes U.S. Trust to record, process, summarize and report
              financial data information; and

        (b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the internal
              controls of Airplanes Limited and Airplanes U.S. Trust.
<PAGE>

Date: June 14, 2004

/s/ WILLIAM M. MCCANN
----------------------------------------------------

W. M. McCann
Chairman of the Board of
Airplanes Limited
Chairman of the Board of
Airplanes U.S. Trust(1)

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

(1) Airplanes Limited and Airplanes U.S. Trust are special purpose vehicles that
    do not employ and have not employed any individual as a chief executive
    officer or chief financial officer and do not have and have not had any
    employees or executive officers since their inception. For all executive
    management functions Airplanes Limited and Airplanes U.S. Trust retain and
    rely upon their third party aircraft servicer, administrative agent and cash
    manager. These third party service providers are required to perform these
    executive management functions in accordance with the requirements of the
    servicing agreement, administrative agency agreement and cash management
    agreement, respectively. With respect to the information contained in this
    annual report, all information regarding the aircraft, the leases and the
    lessees is provided by the servicer pursuant to the servicing agreement. The
    cash manager calculates monthly payments and makes all other calculations
    required by the cash management agreement. Pursuant to the administrative
    agency agreement, the administrative agent uses the information provided by
    the servicer and the cash manager and other information the administrative
    agent acquires in the performance of its services to Airplanes Limited and
    Airplanes U.S. Trust, to prepare all disclosure (including this annual
    report on Form 10-K) required to be filed with the Securities and Exchange
    Commission.

    All members of the Board of Directors of Airplanes Limited and the
    Controlling Trustees of Airplanes U.S. Trust, including the Chairman, are
    non-executives.
<PAGE>

                                 CERTIFICATION

     The certification set forth below is being submitted in connection with the
Annual Report on Form 10-K to which this certification comprises an exhibit (the
"REPORT") for the purpose of complying with Rule 15d-14(b) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") and Section 1350 of
Chapter 63 of Title 18 of the United States Code.

     Airplanes Limited and Airplanes U.S. Trust (together the "COMPANY") are
special purpose vehicles that do not employ and have not employed any individual
as a chief executive officer or chief financial officer and does not have and
has not had any employees or executive officers since its inception. For all
executive management functions the Company retains and relies upon its third
party aircraft servicer, administrative agent and cash manager. These third
party service providers are required to perform these executive management
functions in accordance with the requirements of the servicing agreement,
administrative agency agreement and cash management agreement, respectively.
With respect to the information contained in the Report, all information
regarding the aircraft, the leases and the lessees is provided by the servicer
pursuant to the servicing agreement. The cash manager calculates monthly
payments and makes all other calculations required by the cash management
agreement. Pursuant to the administrative agency agreement, the administrative
agent uses the information provided by the servicer and the cash manager and
other information the administrative agent acquires in the performance of its
services to the Company, to prepare all disclosure (including the Report)
required to be filed with the Securities and Exchange Commission.

     Having regard to the Company's operating procedures discussed above, I,
William M. McCann, as Chairman of the Board of Directors of Airplanes Limited
and Chairman of the Controlling Trustees of Airplanes U.S. Trust, in each case,
a non-executive, hereby certify that, as of the end of the period covered by the
Report, to my knowledge based upon, inter alia, a review of the Report, the
information provided by the servicer, administrative agent and cash manager
pursuant to the servicing agreement, administrative agency agreement and the
cash management agreement, respectively, and discussions and meetings with the
other members of the board of the Company and the servicer, administrative agent
and cash manager:

     (1)   such Report fully complies with the requirements of Section 13(a) or
           Section 15(d) of the Exchange Act; and

     (2)   the information contained in the Report fairly presents, in all
           material respects, the financial condition and results of operations
           of the Company.

                                            /s/ WILLIAM M. MCCANN
                                            ------------------------------------
                                            Name: William M. McCann
                                            Title:  Chairman, Board of Directors
                                                    of
                                               Airplanes Limited
                                               Chairman, Controlling Trustees of
                                               Airplanes U.S. Trust

                                                    June 14, 2004
<PAGE>

                   AIRPLANES LIMITED AND AIRPLANES U.S. TRUST
                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT                           DESCRIPTION
-------                           -----------
<C>       <S>                                                            <C>
  3.1     Certificate of Incorporation of Atlanta Holdings Limited
          dated November 3, 1995 and Certificate of Incorporation on
          change of name to Airplanes Limited dated November 29,
          1995(1).....................................................
  3.2     Memorandum and Articles of Association of Airplanes Limited
          dated March 11, 1996(2).....................................
  3.3     Memorandum and Articles of Association of Airplanes Limited
          reprinted with amendments to June 29, 2000(4)...............
  3.4     Airplanes U.S. Trust Amended and Restated Trust Agreement
          among GPA, Inc., as Settlor, Wilmington Trust Company, as
          the Delaware Trustee, and the Controlling Trustees referred
          to therein dated March 11, 1996(2)..........................
  3.5     Amendment to Airplanes U.S. Trust Amended and Restated Trust
          Agreement dated June 29, 2000(4)............................
  4.1     Pass Through Trust Agreement dated as of March 28, 1996
          among Airplanes Limited, Airplanes U.S. Trust and Bankers
          Trust Company, as Trustee(2)................................
  4.2     Trust Supplement No. 7 dated as of March 28, 1996 to the
          Pass Through Trust Agreement(2).............................
  4.3     Trust Supplement No. 8 dated as of March 28, 1996 to the
          Pass Through Trust Agreement(2).............................
  4.4     Trust Supplement No. 9 dated as of March 16, 1998 to the
          Pass Through Trust Agreement(3).............................
  4.5     Trust Supplement No. 11 dated as of March 16, 1998 to the
          Pass Through Trust Agreement(3).............................
  4.6     Trust Supplement No. 12 dated as of March 16, 1998 to the
          Pass Through Trust Agreement(3).............................
  4.7     Trust Supplement No. 13 dated as of March 15, 2001 to the
          Pass Through Trust Agreement(5).............................
  4.8     Trust Supplement A dated as of March 16, 1998 to the Pass
          Through Trust Agreement(3)..................................
  4.9     Form of Subclass A-6 Pass Through Certificate(3)............
  4.10    Form of Subclass A-8 Pass Through Certificate(3)............
  4.11    Form of Subclass A-9 Pass Through Certificate(5)
          (included in Exhibit 4.7)...................................
  4.12    Form of Class B Pass Through Certificate(3).................
  4.13    Form of Class C Pass Through Certificate(2).................
  4.14    Form of Class D Pass Through Certificate(2).................
  4.15    Airplanes Limited Indenture dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust and Bankers Trust
          Company, as Trustee(2)......................................
  4.16    Supplement No. 1 to the Airplanes Limited Indenture(3)......
  4.17    Supplement No. 2 to the Airplanes Limited Indenture(5)......
  4.18    Supplement No. 3 to the Airplanes Limited Indenture(8)......
  4.19    Airplanes U.S. Trust Indenture dated as of March 28, 1996
          among Airplanes U.S. Trust, Airplanes Limited and Bankers
          Trust Company, as Trustee(2)................................
  4.20    Supplement No. 1 to the Airplanes Trust Indenture(3)........
  4.21    Supplement No. 2 to the Airplanes Trust Indenture(5)........
  4.22    Supplement No.3 to the Airplanes Trust Indenture(8).........
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT                           DESCRIPTION
-------                           -----------
<C>       <S>                                                            <C>
  4.23    Form of Floating Rate Subclass A-6 Note(3)..................
  4.24    Form of Floating Rate Subclass A-8 Note(3)..................
  4.25    Form of Floating Rate Subclass A-9 Note(5)..................
  4.26    Form of Floating Rate Class B Note(3).......................
  4.27    Form of 8.15% Class C Note(2)...............................
  4.28    Form of 10.875% Class D Note(2).............................
  4.29    Form of 20.00% (inflation adjusted) Class E Note(2).........
 10.1     Stock Purchase Agreement dated as of March 28, 1996 among
          AerFi, Inc., AerFi Group plc and Airplanes U.S. Trust(2)....
 10.2     Stock Purchase Agreement dated as of March 28, 1996 among
          AerFi Group plc, Skyscape Limited and Airplanes
          Limited(2)..................................................
 10.3     Administrative Agency Agreement dated as of March 28, 1996
          among AerFi Financial Services (Ireland) Limited, AerFi
          Group plc, Airplanes Limited, AerFi II Limited, Airplanes
          U.S. Trust and AeroUSA, Inc.(2).............................
 10.4     Amendment No. 1 to Administrative Agency Agreement dated as
          of February 5, 2002 among debis AirFinance Financial
          Services (Ireland) Limited, debis AirFinance Ireland plc,
          Airplanes Limited, Airplanes Holdings Limited, Airplanes
          U.S. Trust and AeroUSA Inc.(6)..............................
 10.5     Amendment No. 2 to Administrative Agency Agreement dated as
          of November 5, 2002 among debis AirFinance Financial
          Services (Ireland) Limited, debis AirFinance Ireland plc,
          Airplanes Limited, Airplanes Holdings Limited, Airplanes
          U.S. Trust and AeroUSA Inc.(7)..............................
 10.6     Servicing Agreement dated as of March 28, 1996 among GE
          Capital Aviation Services, Limited, Airplanes Limited,
          AeroUSA, Inc., AerFi II Limited, Airplanes U.S. Trust and
          AerFi Cash Manager Limited(2)...............................
 10.7     Reference Agency Agreement dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust Bankers Trust
          Company, as Airplanes Limited Indenture Trustee and
          Airplanes U.S. Trust Indenture Trustee, Bankers Trust
          Company, as Reference Agent and AerFi Cash Manager Limited,
          as Cash Manager(2)..........................................
 10.8     Secretarial Services Agreement dated as of March 28, 1996
          between Airplanes Limited and Mourant & Co. Secretaries
          Limited, as Company Secretary(2)............................
 10.9     Cash Management Agreement dated as of March 28, 1996 between
          AerFi Cash Manager Limited, as Cash Manager, AerFi Group
          plc, Airplanes Limited, Airplanes U.S. Trust and Bankers
          Trust Company, as Trustee under each of the Airplanes
          Limited Indenture, the Airplanes U.S. Trust Indenture and
          the Security Trust Agreement(2).............................
 10.10    Amendment No. 1 to Cash Management Agreement dated as of
          February 5, 2002 among debis AirFinance Cash Manager
          Limited, debis AirFinance Ireland plc, Airplanes Limited,
          Airplanes U.S. Trust and Bankers Trust Company(6)...........
 10.11    Amendment No. 2 to Cash Management Agreement dated as of
          November 5, 2002 among debis AirFinance Cash Manager
          Limited, debis AirFinance Ireland plc, Airplanes Limited,
          Airplanes U.S. Trust and Bankers Trust Company(7)...........
 10.12    Form of Swap Agreement(2)...................................
 10.13    Security Trust Agreement dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
          Secretaries Limited, the Issuer Subsidiaries listed therein,
          AerFi Financial Services (Ireland) Limited, AerFi Cash
          Manager Limited, AerFi Group plc, GE Capital Aviation
          Services, Limited, Bankers Trust Company, as Airplanes U.S.
          Trust Indenture Trustee and Airplanes Limited Indenture
          Trustee, Bankers Trust Company, as Reference Agent, and
          Bankers Trust Company, as Security Trustee(2)...............
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT                           DESCRIPTION
-------                           -----------
<C>       <S>                                                            <C>
 12       Statement re Computation of Ratios..........................
 21       Subsidiaries of the Registrants.............................
 31       Certification required by Rule 13a-14(a)/15d-14(a)..........
 32       Certification required by Section 1350......................
 99       Appendix 3 to the offering memorandum dated March 15, 2001
          (Expected Portfolio
          Value based on the Depreciation factors and the Aircraft in
          the Portfolio as of
          January 31, 2001)(6)........................................
</Table>

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

  (1)   Incorporated by reference to the Registration Statement on Form S-1
        (File No. 33-99978), previously filed with the Commission on December 1,
        1995, and Amendments No. 1 through 5 thereto.

  (2)   Incorporated by reference to the Report on Form 10-Q for the quarterly
        period ended December 31, 1996, previously filed with the Commission.

  (3)   Incorporated by reference to the Registration Statement on Form S-1
        (File No. 33-99978), previously filed with the Commission on December
        30, 1997, and Amendments No. 1 through 3, thereto.

  (4)   Incorporated by reference to the Report on Form 10-Q for the quarterly
        period ended June 30, 2000, previously filed with the Commission.

  (5)   Incorporated by reference to the Registration Statement on Form S-4
        (File No. 33-58608), previously filed with the Commission on April 10,
        2001 and Amendment No. 1 thereto.

  (6)   Incorporated by reference to the Report on Form 10-K for the annual
        period ended March 31, 2002, previously filed with the Commission.

  (7)    Incorporated by reference to the Report on Form 10-K for the annual
         period ended March 31, 2004, previously filed with the Commission.

  (8)   Incorporated by reference to the Report on Form 10-Q for the quarterly
        period ended September 30, 2003, previously filed with the Commission.