UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                 FORM 10-KSB

           [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
                   For the fiscal year ended April 30, 1998

           [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
                For the transition period from         to

                        Commission file number 2-87778A

                      THE FLIGHT INTERNATIONAL GROUP, INC.
                (Name of small business issuer in its charter)

                   Georgia                             58-1476225
        (State or other jurisdiction     (I.R.S. employer identification number)
              or organization)     

  Newport News/Williamsburg International Airport        23602
    (Address of principal executive offices)          (Zip Code)

                                (757) 886-5500
                         (Issuer's telephone number)

   Securities registered pursuant to Section 12(b) of the Exchange Act: None 
      Securities registered pursuant to Section 12(g) of the Exchange Act:
                  New Common Stock, par value $.01 per share
                               (Title of class)

         Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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   .

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will 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-KSB or any amendment to this Form 10-KSB.  [X]

         The issuer's revenues for the year ending April 30, 1998 were 
$22,060,399.  As of the date hereof, there is no public market for the 
issuer's securities.

         Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.  Yes   No    X

         As of July 15, 1998, there were 1,013,976 shares of the issuer's New
Common Stock, par value $.01 per share,  issued and outstanding.

         Documents Incorporated by Reference: Portions of the Registrant's
definitive proxy statement for the 1998 Annual Meeting, which will be filed
within 120 days of April 30, 1998 are incorporated by reference into Part III.

         Transitional Small Business Disclosure Format [check one]:Yes  ; No  X
--------------------------------------------------------------------------------

<PAGE>
                                    PART I

ITEM 1.           DESCRIPTION OF BUSINESS

GENERAL

Introduction

         The Flight International Group, Inc. (the "Company") was incorporated
in Georgia on May 7, 1982. The Company is an aviation services company
performing military training services using specially modified commercial
aircraft, principally under contract with the United States Department of
Defense, other government agencies and foreign countries, operating through its
direct and indirect subsidiaries described in the next paragraph. In addition,
with the use of these aircraft, the Company has established a market for
training and testing in the aerospace industry. The Company also operates a
fixed base operation ("FBO") at the Newport News/Williamsburg International
Airport ("NN/W Airport").

         Flight International, Inc., a Georgia corporation ("FII"), Flight
International Aviation, Inc., a Georgia corporation ("FIA") and FI Sales and
Leasing, Inc., a Delaware corporation are wholly-owned subsidiaries of the
Company. Flight International of Florida Inc., a Florida corporation ("FIF") is
a wholly-owned subsidiary of FII.

         In its last three fiscal years, the Company has increased its revenue,
obtained, in August 1996, a major long-term contract (see "CAS-MOS Contract,"
below) and has generated positive net income (after extraordinary item in 1996)
for the years ended April 30, 1998, 1997 and 1996.

         Management believes that in this three-year period it has strengthened
its balance sheet, developed contracts in its core areas and as a result
acquired more personnel and equipment, and enhanced the Company's ability to
compete more effectively in its marketplaces. See "Flight Operations -
Competition" below.

CAS-MOS Contract

         In August 1996, the Company was awarded a major contract. The
Commercial Air Services Military Operations Support (CAS-MOS) contract is a
derivative of the original government contract won by the Company in 1980 and
operated until September 1993. The new contract began on October 1, 1996 and has
completed its one base year, is currently in its first option year and three
additional years remain. Annual revenues from this contract have been $13.9
million and $7.3 million for the fiscal year ended April 30, 1998 and the seven
months ended April 30, 1997, respectively. This contract currently constitutes a
substantial portion of the Company's revenues. There can be no assurance that
the Government will exercise its remaining options on the CAS-MOS contract.

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1994 Bankruptcy Proceedings

         On December 28, 1994, the Company and several affiliates emerged from
bankruptcy pursuant to a Joint Plan of Reorganization (the "Plan"). The Plan
restructured and satisfied the claims of the creditors of these entities and the
interests of shareholders of the Company.

         As part of the Plan, a new class of stock, New Common Stock, par value
$.01 per share ("New Common Stock") was created (with 1,000,000 shares
authorized, which amount was increased to 10,000,000 shares, by approval of the
shareholders, on December 10, 1996) and all previous classes of stock were
canceled. Certain preexisting secured lenders' indebtedness also was
restructured as part of the Plan.

         The Company's consolidated operations are concentrated principally in
two business segments:  flight operations and fixed base operations.

FLIGHT OPERATIONS

         As of July 1, 1998, the Company operated 25 aircraft, including 13
Learjets, four Fairchild Metro IIIs, three Casas and four other prop aircraft.
These aircraft are used in the conduct of flight operations for the U.S.
Government and commercial customers. In addition, the Company owns and operates
electronic warfare equipment used in conjunction with its flight operations
contracts. The Company also maintains an inventory of spare aircraft parts used
in support of the Company's fleet as well as third party aircraft.

Contract Flight Services

         The Company performs contract flight services for the United States
Department of Defense ("DOD"), other government agencies and commercial
customers. The Company utilizes specially modified business jets and propjets in
connection with the training of military aircrews, radar operators and weapons
controllers in the techniques of airborne target identification and intercept.

         Under the contracts with the DOD, the Company's aircraft simulate
aggressor aircraft, tow airborne targets for air-to-air and surface-to-air
missile and gunnery live firing exercises and use airborne electronic
countermeasures equipment and techniques to disrupt ship, aircraft and land
based communications and radar. Contracts with the DOD generally provide for
compensation based on flight hours of usage. Flight crews are required to hold
United States government security clearances in connection with certain
classified aspects of the services provided.

         In addition to its contracts with the DOD, a small portion of the
Company's revenues from flight operations is generated from customers in the
aerospace industry, which use specially configured aircraft for training and
testing. Typically, customers utilize aircraft and flight crews in connection
with product development. Many of these services are provided pursuant to
purchase orders, rather than long-term contracts.

         Seasonality is a significant factor in contract flight operations 
(historically representing a majority

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of the Company's revenues) which affects revenue and cash flow. Revenues are
lower during midsummer and early winter months.

         In addition to offering contract flight services, the Company offers
its aircraft and equipment for lease or rental to DOD and other government
customers. During the fiscal year ended April 30, 1998, this part of the
business remained strong, due principally to continuing the Company's contract
with the U.S. Navy/Naval Weapons Center in China Lake, California, to provide
Metro III aircraft necessary to accomplish naval training. This portion of the
business, while strong, represents a smaller percentage of the Company's overall
revenues than in previous years, due principally to the revenues from the
CAS-MOS contract.

Government Contracts

         United States Federal government contract awards are made through
sealed competitive bids, unless an exemption from full and open competition
under the Federal procurement laws is applicable. Under the regulations
governing sealed bidding, the qualified bidder with the lowest price and the
price related factors most advantageous to the government, is generally awarded
the contract.

         Under negotiated procurements, other evaluation factors such as
experience, quality of technical approach and management capability, may weigh
more heavily than price in the selection process.

         The Company's DOD contracts were awarded competitively pursuant to
procedures under the relevant Federal procurement laws or are annual contracts
having additional one year option periods that may be exercised by the DOD.

         For each year of a contract, including the base year and any option
year that the government has elected to take, all contract revenues are
contingent upon the availability of adequate funding. For the fiscal year ended
April 30, 1998, revenue from contracts with the United States government
represented approximately 78% of the Company's total revenues.

         Payments received under government contracts normally are based upon
flight hours at the price per flight hour established in the contract. Flight
hours are measured from the time aircraft and personnel depart for a
predesignated location defined in the contract to perform the assigned training
or support mission, until the completion of the mission and the return of the
aircraft to the predetermined station. Under most contracts it is necessary to
attain a predetermined mission success rate or other contract performance
standard.

         Minimum guaranteed contract payments under most contracts are based on
an established number of flight hours that the government is required to order
during each current year of the contract and during any subsequent contract year
for which the government affirmatively exercises an option. The Company's price
for "guaranteed" flight hours is fixed in the contract. The government may order
more flight hours than specified in the contract. Such "excess" hours are paid
for at an established contract price for excess hours.

         For each contract year, the Company receives payment from the 
government for the established

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number of guaranteed flight hours specified in the contract at the applicable
contract rate, regardless of whether or not the government actually uses all
such flight hours for the contract year. However, payment to the Company for a
shortfall, if any, between the number of hours actually used by the government
and the level specified in the contract will not be received until the end of
the contract year.

         The Company's DOD contracts generally are firm, fixed-price contracts
under which the Company bears the risk that the prices paid by the government
will be sufficient to cover actual costs incurred in performing under the
contract, plus the amount of profit expected in pricing its bid or proposal. The
Company may, however, file claims for certain uncontrollable cost overruns such
as jet fuel cost increases.

         The Defense Contract Audit Agency has the right to audit the Company's
books and records as a result of these contractual relationships. Because of the
fixed-price nature of the contracts, however, prices are not normally subject to
renegotiation or retroactive adjustment.

Competition

         The markets in which the Company conducts flight operations are highly
competitive. Price usually is a significant factor considered in awarding
contracts. Many firms, ranging in size from companies having substantially
smaller operations than the Company to affiliates of major corporations having
substantially greater resources than the Company, compete directly with the
Company for contracts awarded by the United States Government and the other
flight operations customers and potential customers of the Company.

         Competitive factors other than price which affect the award of flight
operations contracts include the number of employees (for example, certain
contracts are available only to businesses with fewer than 1,500 employees),
experience in the field of aviation services and adequacy of resources,
including maintenance personnel, aircrews, repair facilities and aircraft.

         Competition is an even greater factor in the commercial segment of the
flight operations market where barriers to entry are lower than in the
government sector. This is due in part to the fact that aircraft may not require
unique modifications in order to perform the desired services. In the commercial
market, the Company competes with numerous companies, some of which also compete
in the market for military contracts. Price also can be a significant factor
where, on occasion, competitors are single aircraft operators engaged in the
business on a part-time basis.

         Financial condition and fiscal stability also are significant
competitive factors affecting the award of contracts in both the government and
commercial sectors of flight operations. The Company's results of operations
prior to, during and immediately following the bankruptcy had adversely affected
its ability to compete for certain contracts. Following three profitable years
and successful performance on contracts, management believes it has to a large
extent rebuilt confidence with the Company's customers and potential customers
in order to be a long-term player in the industry. See "Management's Discussion
and Analysis or Plan of Operation."

                                    5

<PAGE>
FIXED BASE OPERATION

         FIA operates a FBO at the NN/W Airport pursuant to an agreement with
the Peninsula Airport Commission which terminates in January 2004. The FBO
currently serves the line service and fuel requirements of Company aircraft in
support of the Company's flight operations. The Company also offers a full range
of aviation services customarily provided by such a facility to third parties.
These services include aircraft fueling, maintenance services (including
inspections and engine and airframe repairs), aircraft modifications, avionics
installation and replacement, charter, flight instruction, pilot services and
aircraft storage and hangaring.

         The competitive market for FBO services may be local, regional or
national, depending upon the particular type of service considered. Competition
with respect to fuel and maintenance generally arises from other FBOs located at
the same airport or within the vicinity of such airport. The Company controls
substantially all the fueling business at the NN/W Airport. For major
maintenance, the Company's facilities compete with other facilities nationwide.

         The availability of storage hangars for aircraft also is an important
competitive factor. Generally, pilots with aircraft hangared at a facility will
purchase fuel and a substantial portion of their maintenance and avionics
requirements at that facility. The Company maintains three hangars at its
Newport News FBO which are used for its fleet of aircraft as well as third-party
aircraft. Management does not believe that revenues from its FBO are seasonal or
dependent on a single customer.

         The FBO comprises approximately 39,000 square feet of hangar space and
43,000 square feet of maintenance and office space, of which approximately
10,000 square feet is occupied by the Company's headquarters.

REGULATION

         The Company's business is subject to regulation by the U.S. Federal
Aviation Administration ("FAA") and the Department of Transportation ("DOT")
under the provisions of the Federal Aviation Act of 1958, as amended (the
"Aviation Act"). The DOT is responsible, inter alia, for evaluating and
determining the fitness of individuals and organizations to function as air
carriers and maintains jurisdiction over consolidations, mergers or acquisitions
of air carriers.

         The FAA regulates aircraft and air carrier operations, including
personnel employed, equipment used, ground facilities, maintenance,
communications and other matters. More specifically, the FAA regulates the
operation of aircraft in commercial operations under Federal Aviation Regulation
Part 135 and repair facilities (repair stations), including those operated by
the FBO, under Federal Aviation Regulation Part 145.

         The FAA has the authority to suspend or revoke the approval of air
carriers, commercial operators, repair stations and pilot schools or their
licensed personnel for failure to comply with any FAA regulation and can
"ground" aircraft if questions arise concerning their airworthiness. Management
believes the Company holds all operating, airworthiness and other FAA
certificates required for the conduct of its

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<PAGE>
business, although these certificates may be suspended or revoked for cause.

         The FAA also has authority under the Noise Control Act of 1972, as
amended, to monitor and regulate aircraft engine noise. Management believes that
the aircraft operated by the Company are in compliance with regulations
promulgated by the FAA and that such aircraft also comply with standards for
aircraft exhaust regulations promulgated by the Environmental Protection Agency
pursuant to the Clean Air Act of 1979, as amended. In addition, the Company's
operations may be subject to local regulation with respect to noise control.
Such authorities and ordinances could restrict the Company's use of older
Learjets, which produce greater engine noise than newer models.

         Because of the extensive use of radio and other communication
facilities in its aircraft operations, the Company is subject to the Federal
Communications Commission Act of 1934, as amended (the "FCC Act") and regulation
thereunder by the Federal Communications Commission ("FCC"). The Company
believes it is in compliance with all material requirements of the FCC Act and
the FCC.

         The Company maintains a fuel storage area at its FBO and handles
materials which are subject to federal, state and local regulations. The Company
believes it is in compliance with all such regulations and does not currently
anticipate that maintaining compliance will have a material effect on the
capital expenditures, earnings or competitive position of the Company. The
Company believes the costs and effects of compliance with such regulations are
minor.

         Compliance with the regulatory requirements applicable to the Company's
business imposes material burdens on the Company, including license
requirements, maintenance, training, record keeping and reporting obligations
and limitations on the manner in which the Company may operate its aircraft.
Further, the cost of compliance with these requirements is significant.
Management believes, however, that the regulatory requirements applicable to the
Company generally are no more burdensome to the Company than to other businesses
operating in the aviation services industry.

EMPLOYEES

         As of April 30, 1998, the Company had 163 employees, including 100
full-time employees. None of the Company's employees is covered by a collective
bargaining agreement.

ITEM 2.           DESCRIPTION OF PROPERTY

         The Company's leasehold interests at the NN/W Airport represent
approximately 11% of the total assets of the Company. These leasehold interests
consist of three hangars totaling 39,000 square feet and approximately 43,000
square feet of maintenance shop and office space. The leasehold improvements are
amortized on a straight-line basis over the term of the land lease, which runs
through January 2004. There are no plans for additional improvement of the
property, and, in the opinion of the management, the property is adequately
insured.

                                       7

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         The Company presently operates a small fleet of 25 aircraft, of which
three are owned and 22 are leased. The Company also owns, subject to a Deed of
Trust and Security Interest Lien to First Union National Bank ("First Union"),
certain buildings, hangars and maintenance facilities at its FBO and leases the
land at its headquarters from the Peninsula Airport Commission. A majority of
the Company's assets are pledged as collateral on its debt and capital lease
obligations.

         In 1988, FIA mortgaged substantially all of its leasehold interests,
improvements and related fixtures and equipment to First Union. As of April 30,
1998, the indebtedness to First Union was approximately $1,692,700. The
indebtedness to First Union provides for complete amortization thereof through
graduated payments through November 2003, at which time the entire obligation
will be satisfied.

         The Company leases the land underlying its headquarters building and
hangars through the year 2004 pursuant to a lease agreement with the Peninsula
Airport Commission of Newport News, Virginia.

         The Company's executive offices and corporate headquarters are located
at Newport News/Williamsburg International Airport, Newport News, Virginia
23602, where the Company has approximately 10,000 square feet of office space.


ITEM 3.           LEGAL PROCEEDINGS

         There are no material pending legal proceedings to which the Company is
a party or to which any of its properties are subject. A certain grand jury
investigation is described in Note 8 to the annexed Consolidated Financial
Statements of the Company set forth in Item 7 hereof.


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

         No matters were submitted to a vote of security holders of the Company
during the fiscal quarter ended April 30, 1998.


                                   PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company became a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") in 1984, at the time of its initial
public offering of securities. Thereafter it filed reports pursuant to the
requirements of Sections 13 and 15(d) of the Exchange Act. It has filed all
required filings reflective of all periods from and after January 31, 1995.

          The shares of New Common Stock of the Company currently trade in the
"pink sheets," since the Old Common Stock, which had been listed on the National
Association of Securities Dealers, Inc.

                                  8

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Automated Quotation System ("NASDAQ") Additional List, was delisted in 1992.
There can be no assurance that the Company will qualify for relisting on Nasdaq.
If qualification occurs, the Company will then determine if it is in the
Company's best interest to become re-listed.

         The Company believes that since April 30, 1993, virtually no trading
has taken place with respect to the Old Common Stock and New Common Stock,
respectively. There is no established public trading market currently for the
New Common Stock, and, therefore, no bid information is available.

         The approximate number of holders of record of New Common Stock as of
July 1, 1998 is 1,500. The Company has no other class of securities authorized.
On December 10, 1996, the shareholders of the Company approved an amendment to
the Company's Amended Certificate of Incorporation to increase the number of
authorized shares of New Common Stock from 1,000,000 shares to 10,000,000
shares.

         No cash dividends were declared on the New Common Stock during the
fiscal years ended April 30, 1998, April 30, 1997 and April 30, 1996.


ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

YEAR ENDED APRIL 30, 1998 COMPARED TO THE YEAR ENDED APRIL 30, 1997

Revenues

          For the year ended April 30, 1998, revenues totaled $22,060,399. This
represents an increase of 16% over the prior year. Company revenue is generated
from three sources. Flight operations of owned or leased aircraft accounts for
84% of total revenue, followed by the maintenance and repair facility at 8% and
the FBO at 7% of total revenue.

         While flight operations and the FBO showed substantial increases, the
maintenance and repair facility revenue decreased, as displayed below (in
thousands):

                        12 Months Ended     12 Months Ended
                        April 30, 1998      April 30, 1997      % Increase
                        ---------------     ---------------     ----------
Flight Operations        $18,585              $14,904             25%
Maintenance Facility     $ 1,853              $ 2,671            -31%
Newport News FBO         $ 1,622              $ 1,460             11%

         The increase in flight operations is due to revenues resulting from the
CAS-MOS contract, which was in place for the full fiscal year ended April 30,
1998 but only for seven months during the fiscal year ended April 30, 1997.
Maintenance revenue was down due to the completion of a special one time
aircraft
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modification project during the first quarter of the fiscal year ended April 30,
1997. FBO revenues increased following a pattern of increased traffic through
the NN/W Airport.

Costs of Services

         Costs of services include the direct operating expenses of aircraft
owned and leased by the Company. Types of expenses incurred include the
following: lease, fuel, insurance, maintenance, pilots and equipment. Also
included are the costs of operating the FBO at the NN/W Airport. The costs for
the aircraft repair facility are also included in costs of services.

          For the year ending April 30, 1998 there was a 20% increase in costs
of services. The major factor contributing to the increase in costs of services
was expenses related to the CAS-MOS contract. The overall gross margin declined
to 18% from 20% in the prior year. The decline in gross margin is principally
due to a high margin aircraft modification project performed in the fiscal year
ended April 30, 1997 which did not recur in the fiscal year ended April 30,
1998.

Depreciation and Amortization

         Aircraft and engines are depreciated as follows: aircraft are
depreciated on a straight-line basis over 12 years. Engines are depreciated
based on hours flown down to a core value. In addition, a reserve is recorded to
cover the cost of major periodic inspections on engines. Electronic warfare
equipment is depreciated on a straight line basis over five years. All other
property and equipment is depreciated over its estimated useful life or lease
term, if applicable.

         Depreciation and amortization of $571,141 for the fiscal year ended
April 30, 1998 reflects a decrease of 3% compared to fiscal year 1997. This
relatively minor change is a result of no significant asset purchases during the
year.

General, Corporate and Administrative

         General, corporate and administrative expenses consist principally of
facility costs associated with the three hangars and corporate headquarters
building, and labor costs associated with the administrative and sales staff.
General, corporate and administrative expenses aggregated $2,167,575 for the
year ended April 30, 1998, a decrease of 2% over the prior twelve month period.
The decrease is the result of a decrease in bad debt write-offs during the
fiscal year ended April 30, 1998.

Interest Expense

         Interest expense decreased to $365,540 from $376,558 for the prior
twelve month period, or 3%. The decrease in interest expense is principally due
to the pay down of long term debt as well as more favorable rates of interest on
the line of credit with Crestar Bank. (See "Liquidity and Capital Resources"
below.)

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Income Tax Expense

         Income tax expense varies from statutory tax rates principally because
of the utilization of net operating loss carry forwards. For further discussion
see Note 6 to the Consolidated Financial Statements included herein.

Net Income

         The consolidated net profit for the year ended April 30, 1998 was
$725,883, a profit of $.72 per share compared to a net profit of $664,890, or
$.66 per share, for the year ended April 30, 1997. The weighted average number
of shares was 1,013,976 and 1,003,976, respectively.

YEAR ENDED APRIL 30, 1997 COMPARED TO THE YEAR ENDED APRIL 30, 1996

Revenues

          For the year ended April 30, 1997, revenues totaled $19,035,036. This
represents an increase of 55% over the prior year. Company revenue is generated
from three sources. Flight operations accounts for 78% of total revenue,
followed by maintenance and repair facility at 14%, and the FBO at 8% of total
revenue.

         While flight operations and the maintenance and repair facility showed
substantial increases, the FBO revenue decreased, as displayed below (in
thousands):

                       12 Months Ended      12 Months Ended
                       April 30, 1997       April 30, 1996      % Increase
                       ---------------      ---------------     ----------
Flight Operations        $14,904               $ 8,947              67%
Maintenance Facility     $ 2,671               $ 1,693              58%
Newport News FBO         $ 1,460               $ 1,625             -10%

         The increase in flight operations is due to revenues resulting from the
CAS-MOS contract, which was in place for seven months during the fiscal year
ended April 30, 1997. Maintenance revenue was up due to the completion of
customer aircraft modifications during the first quarter. FBO revenues were down
due to decreased traffic through the NN/W Airport.

Costs of Services

         Costs of services include the direct operating expenses of aircraft
owned and leased by the Company. Types of expenses incurred include the
following: lease, fuel, insurance, maintenance, pilots and equipment. Also
included are the costs of operating the FBO at the NN/W Airport. The costs for
the aircraft repair facility are also included in costs of services.

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          For the year ending April 30, 1997 there was a 65% increase in costs
of services. The major factor contributing to the increase in costs of services
was expenses related to the CAS-MOS contract. The overall gross margin declined
to 20% from 24% in the prior year. The decline in gross margin is principally
due to the sale and leaseback of three aircraft in April 1996 (the
"Sale/Leaseback"). See also "Depreciation and "Amortization," below.

Depreciation and Amortization

         Aircraft and engines are depreciated as follows: aircraft are
depreciated on a straight-line basis over 12 years. Engines are depreciated
based on hours flown down to a core value. In addition, a reserve is recorded to
cover the cost of major periodic inspections on engines. Electronic warfare
equipment is depreciated on a straight line basis over five years. All other
property and equipment is depreciated over its estimated useful life or lease
term, if applicable.

         Depreciation and amortization of $588,395 for the fiscal year ended
April 30, 1997 reflects a decrease of 29% compared to fiscal year 1996. This
decrease is the result of the Sale/Leaseback involving three planes with a total
cost basis of approximately $2,694,000 in April 1996.

General, Corporate and Administrative

         General, corporate and administrative expenses consist principally of
facility costs associated with the three hangars and corporate headquarters
building, and labor costs associated with the administrative and sales staff.
General, corporate and administrative expenses aggregated $2,218,682 for the
year ended April 30, 1997, an increase of 22% over the prior twelve month
period. The increase is the result of an increase in support staff to offset the
sizable increase in direct costs. In addition, bad debt expense increased
substantially due to one commercial maintenance customer.

Interest Expense

         Interest expense decreased to $376,558 from $561,284 for the prior
twelve month period, or 33%. The decrease in interest expense is principally due
to the Sale/Leaseback in April 1996 and the related payoff of debt of
approximately $2,164,000, and $711,000 reduction in long term debt during the
fiscal year ended April 30, 1997. The decrease from the Sale/Leaseback is
partially offset by interest expense resulting from obligations pursuant to the
Company's factoring arrangement (see "Liquidity and Capital Resources," below).

Income Tax Expense

         Income tax expense varies from statutory tax rates principally because
of the utilization of net operating loss carry forwards. For further discussion
see Note 6 to the Consolidated Financial Statements included herein.

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Extraordinary Gain on Debt Extinguishment

         In April 1996, the Company paid off at a discount certain indebtedness
to Michigan National Bank. As a result of that transaction, an extraordinary
gain of $313,793 was recorded to reflect the forgiveness of
that portion of the indebtedness.

Net Income

         The consolidated net profit for the year ended April 30, 1997 was
$664,890, a profit of $.66 per share compared to a net profit of $115,295, or
$.11 per share, for the year ended April 30, 1996. The weighted average number 
of shares was 1,003,976 and 998,976, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has funded its operations primarily through cash flows from
operations and short term borrowings. The Company's operating activities
provided cash of $60,251 for the fiscal year ending April 30, 1998, while
providing $85,355 in the comparable prior year period.

         In addition, on January 15, 1998 the Company refinanced a loan secured
by two aircraft. The new loan is for $1,338,750 payable over 84 months at a
fixed rate of 9.25%. Monthly payments are $15,937.50 in principal plus interest
in arrears. Proceeds were used to pay off the existing loan ($956,690) with the
remaining balance used to meet working capital requirements.

         On October 16, 1996, the Company entered into a Factoring Agreement
(the "Heller Agreement", which has been replaced, see below) with Heller Small
Business Finance, a division of Heller Financial, Inc. ("Heller"). The Heller
Agreement granted Heller an assignment of the CAS-MOS contract accounts
receivable and proceeds thereon as collateral for a line of credit which was
expected not to exceed $2,000,000. The term of the Heller Agreement was for two
years, with an option for the Company to terminate the Heller Agreement after
one year, if the Company was able to obtain traditional bank financing. Heller
charged a discount fee of .8% of the invoice amount purchased and an interest
rate of prime plus 1% until the invoice is paid. The Heller Agreement included a
minimum fee to Heller, inclusive of all interest charges, of $60,000 per annum.

         On August 28, 1997, Heller exited the small business factoring market
and sold, transferred and assigned the Agreement to Metro Factors, Inc.
("Metro"). All terms and conditions under the Agreement remained the same until
October 1, 1997, when Metro and the Company agreed to amend the terms. The
discount fee was lowered to 0.4% for funding periods of 1-30 days, with an
additional 0.1% for each 15 day period thereafter. The minimum fee was reduced
to $12,000 per annum. Other terms of the Agreement remained the same.

         On February 25, 1998, the Company entered into a line of credit with
Crestar Bank ("Crestar") for all short term financing needs. The new agreement,
which replaces the agreement with Metro, which has now been terminated, provides
for up to $2,000,000 in credit. The loan is represented by a demand note

                                  13

<PAGE>
which may be payable at any time upon the demand of Crestar. The Company will be
obligated to pay Crestar interest at prime rate plus one-half percent of the
average balance outstanding. The line is secured by the Company's accounts
receivable and an assignment of the CAS-MOS contract.

         The Company believes that its ability to replace the Metro factoring
arrangement with more traditional bank financing represents an important step in
its efforts to enhance third-party confidence in the Company's performance and
its prospects. The new arrangement also will reduce the Company's overall
borrowing costs.

         The Company operates in a capital intensive industry. Typically, major
expenses are incurred in connection with the initiation of a new contract. These
costs can consist of acquisition of additional aircraft, equipment and training.
These costs can be reduced through leasing arrangements and advance payments
from customers, if these are obtainable. The Company believes that it will be
able to arrange through available means the financing of these initial contract
costs when necessary, although no assurance can be given. See Notes 4, 5 and 7
to the Consolidated Financial Statements included herein for a discussion of
debt and lease commitments.

NEW ACCOUNTING STANDARDS

         During June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("Statement 130"), which is effective for financial statements with
fiscal years beginning after December 15, 1997. Statement 130 establishes
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. Adoption of this
Statement will not have a material impact on the financial statements of the
Company.

         During June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131, "Disclosure about segments
of an Enterprise and Related Information" ("Statement 131"), which is effective
for financial statements with fiscal years beginning after December 15, 1997.
The new standard requires that public business enterprises report certain
information about operating segments in complete sets of financial statements of
the enterprise and in condensed financial statements of interim periods issued
to stockholders. It also requires that public business enterprises report
certain information about their product and services, the geographic areas in
which they operate and their major customers. Adoption of this Statement will
not have a material impact on the financial statements of the Company.

YEAR 2000 MODIFICATIONS

         The Company is currently reviewing its computer systems in order to
evaluate if any modifications are necessary for the year 2000. The Company
currently does not anticipate that any material modifications or expenditures
will be required in its computer systems for the year 2000.

                                     14

<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                                  April 30,
                                                                                         --------------------------
                                                                                         1998                  1997
                                                                                         ----                  ----
<S>                                                                                    <C>                    <C>
Current assets
  Cash                                                                                 $   104,008            $  231,111
  Accounts receivable, net (Notes 1 and 4)                                               3,989,073             2,230,370
  Inventories (Notes 2 and 5)                                                            2,087,700             1,790,890
  Prepaid expenses and other                                                               510,785               463,552
  Deposits                                                                                 983,774               952,524
------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                     7,675,340             5,668,447
------------------------------------------------------------------------------------------------------------------------
Property and equipment, net (Notes 3 and 5)                                              4,096,017             4,266,598
------------------------------------------------------------------------------------------------------------------------
Other assets                                                                                22,262                28,323
------------------------------------------------------------------------------------------------------------------------
     Total assets                                                                      $11,793,619            $9,963,368
------------------------------------------------------------------------------------------------------------------------
                                    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accounts payable                                                                     $   450,403            $  326,406
  Deferred revenue                                                                         950,802               769,547
  Accrued expenses and other liabilities (Note 8)                                        2,362,442             1,775,972
  Note payable (Note 4)                                                                    451,097                   -
  Long-term debt due currently (Note 5)                                                    652,238               640,351
  Income tax payable (Note 6)                                                               20,000                   -
------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                4,886,982             3,512,276
------------------------------------------------------------------------------------------------------------------------
Deferred revenue                                                                           727,586             1,090,192
Accrued engine reserves                                                                    744,647               400,542
Long-term debt, less current maturities (Note 5)                                         3,030,231             3,282,068
------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                        9,389,446             8,285,078
------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies (Notes 7 and 8)
------------------------------------------------------------------------------------------------------------------------
Stockholders' equity
  Common stock, $.01 par value, 10,000,000 shares
    authorized; 1,013,976 issued and outstanding (Note 13)                                  10,140                10,140
  Additional paid-in capital                                                             1,007,617             1,007,617
  Retained earnings                                                                      1,386,416               660,533
------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                               2,404,173             1,678,290
------------------------------------------------------------------------------------------------------------------------
     Total liabilities and stockholders' equity                                        $11,793,619            $9,963,368
------------------------------------------------------------------------------------------------------------------------
</TABLE>
          See accompanying summary of accounting policies and notes to 
                       consolidated financial statements.

                                        15


<PAGE>
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                          Year Ended April 30,
                                                                                      ----------------------------
                                                                                      1998                    1997
                                                                                      ----                    ----
<S>                                                                                  <C>                    <C>
Revenues (Note 10)                                                                   $22,060,399            $19,035,036
-----------------------------------------------------------------------------------------------------------------------
Operating costs and expenses
  Costs of services                                                                   18,272,492             15,259,962
  Gain on disposal of assets                                                             (75,232)               (73,451)
  Depreciation and amortization                                                          571,141                588,395
  General, corporate and administrative                                                2,167,575              2,218,682
-----------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses                                                    20,935,976             17,993,588
-----------------------------------------------------------------------------------------------------------------------
Operating income                                                                       1,124,423              1,041,448
-----------------------------------------------------------------------------------------------------------------------
Other (income) expenses
  Interest expense                                                                       365,540                376,558
-----------------------------------------------------------------------------------------------------------------------
Total other (income) expenses                                                            365,540                376,558
-----------------------------------------------------------------------------------------------------------------------
Income before taxes                                                                      758,883                664,890

Income tax expense (Note 6)                                                               33,000                    -
-----------------------------------------------------------------------------------------------------------------------
Net income                                                                           $   725,883            $   664,890
-----------------------------------------------------------------------------------------------------------------------
Earnings per share data:
  Basic and diluted earnings per share                                               $       .72            $       .66
  Weighted average number of shares                                                    1,013,976              1,003,976
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
           See accompanying summary of accounting policies and notes to 
                            consolidated financial statements.

                                          16

<PAGE>
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                                                                      
                                                               Common Stock                    Additional       Retained
                                                        ----------------------------             Paid-in        Earnings
                                                        Shares                Amount             Capital        (Deficit)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                     <C>                <C>             <C>   
Balance, April 30, 1996                                 998,976               $ 9,990            $  987,217      $   (4,357)

Issuance of common stock                                 15,000                   150                20,400            -

Net income                                                 -                        -                  -            664,890
---------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1997                               1,013,976                10,140             1,007,617         660,533

Net income                                                 -                        -                  -            725,883
---------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1998                               1,013,976               $10,140            $1,007,617      $1,386,416
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
        See accompanying summary of accounting policies and notes to 
                         consolidated financial statements.

                                        17


<PAGE>

         CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          Year ended April 30,
                                                                                      ----------------------------
                                                                                      1998                    1997
                                                                                      ----                    ----
<S>                                                                                   <C>                    <C>
Operating activities
  Net income                                                                          $  725,883             $  664,890
  Adjustments to reconcile net income
    to net cash provided by operating
    activities
      Depreciation and amortization                                                      571,141                588,395
      Engine reserve                                                                     344,105                186,205
      Issuance of common stock for services                                                  -                   20,550
      Gain on sale of assets                                                             (75,232)               (73,451)
      Net cash provided (absorbed) by
        Accounts receivable                                                           (1,758,703)              (849,567)
        Inventories                                                                     (296,810)               (61,387)
        Prepaid expenses and other assets                                                (74,481)              (626,298)
        Accounts payable                                                                 123,997                152,120
        Accrued expenses and other liabilities                                           661,702                267,820
        Deferred revenue                                                                (181,351)              (183,922)
        Income taxes payable                                                              20,000                    -
---------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                 60,251                 85,355
---------------------------------------------------------------------------------------------------------------------------
Investing activities
  Purchase of property and equipment                                                    (398,501)              (346,846)
  Proceeds from the sale of property and
    equipment                                                                                -                   25,292
---------------------------------------------------------------------------------------------------------------------------
Net cash absorbed by investing activities                                               (398,501)              (321,554)
---------------------------------------------------------------------------------------------------------------------------
Financing activities
 Proceeds from credit line, net                                                          451,097                    -
 Repayment of long-term debt                                                          (1,596,750)              (711,469)
 Proceeds from long-term debt                                                          1,356,800                    -
---------------------------------------------------------------------------------------------------------------------------
Net cash provided (absorbed) by financing activities                                     211,147               (711,469)
---------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and
  cash equivalents                                                                      (127,103)              (947,668)

Cash and cash equivalents,
  beginning of year                                                                      231,111              1,178,779
---------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                                                $  104,008             $  231,111
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
            See accompanying summary of accounting policies and notes to 
                         consolidated financial statements.


                                     18

<PAGE>
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Business - The Flight International Group, Inc. and Subsidiaries
(the "Company") is an aviation services company that performs military training
services using specially modified commercial aircraft, principally under
contracts with the United States Department of Defense, other government
agencies and foreign countries. In addition, the Company has established a
market for training and testing in the aerospace industry. The Company also
operates a fixed base operation ("FBO") at the Newport News/Williamsburg
International Airport.

     Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All significant
intercompany transactions and balances have been eliminated.

     Inventories - Aircraft parts - Aircraft parts include rotables, repairable
and expendable aircraft components. Rotables and repairables are recorded using
the specific identification method and are valued at the lower of cost or
market. Expendables are recorded at the lower of average cost or market.

     Targets and cable - Targets and cable are special equipment required to
perform target tow missions and are recorded at the lower of average cost or
market.

     Fuel - Fuel includes Jet A and Avgas, both of which are consumed in the
performance of contracts and sold commercially. Fuel is recorded at the lower of
average cost or market.

     Property and Equipment - Property and equipment are recorded at cost. The
cost of improvements are capitalized, while the cost of replacements,
maintenance and repairs which do not improve or extend the life of the
respective assets are expensed.

     Depreciation and amortization of property and equipment are provided, for
financial reporting purposes, as follows:

     Aircraft and Engines - Aircraft are depreciated on a straight-line basis 
over 12 years.  Engines are depreciated based on hours flown down to a core 
value.

     The U.S. Federal Aviation Administration mandates the performance of a
Major Periodic Inspection (MPI) on engines every 1,500 flight hours. In order to
properly account for the cost of this inspection over the time the engine is in
service, the Company records a reserve based on hours between inspections for
each engine. The reserve is relieved when the service work is performed on the
engine.

     Electronic Warfare Equipment - Substantially all electronic warfare
equipment and related aircraft modifications are utilized to train military
aircrews, radar operators and weapons controllers in the techniques of airborne
target identification and intercept. Such equipment and related aircraft
modifications are carried at the lower of cost or market value and are
depreciated on a straight-line basis over 5 years.

     Other equipment - All other property and equipment is depreciated on a
straight-line basis over its estimated useful life or lease term, as applicable.
Estimated useful lives are as follows: leasehold interests and improvements,
primarily in the airport buildings - 73 months (remaining lease term);
equipment, office furniture, and fixtures - 5 years.

                                     19

<PAGE>
                  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                                 (CONTINUED)

     Asset Impairments and Disposals - The Company adopted the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
(SFAS 121) during the year ended April 30, 1997. SFAS 121 establishes accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of.

     The Company reviews the carrying values of its long-lived and identifiable
intangible assets for possible impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable. Any long-lived assets held for disposal are reported at their net
realizable value. The application of this pronouncement did not have a material
effect on the financial statements of the Company.

     Revenue Recognition - Contract Revenue - The Company recognizes contract
revenue as hours are flown, at the average rate per flight hour, over the term
of each contract. Certain contracts provide for a guaranteed minimum number of
flight hours per contract year. Contract revenue for such guaranteed but unflown
hours, if any, is recognized at the end of the contract year. Certain contracts
provide for cash payments in excess of the average rate per hour in the early
years of a contract; such excess is recorded as deferred revenue and recognized
as revenue as hours are flown over the contract term, which may exceed one year.

     Income Taxes - Income taxes are accounted for under FASB Statement No. 109,
"Accounting for Income Taxes" ("SFAS No. 109), the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Under SFAS No. 109, the effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date.

     Stock Based Compensation - The Company adopted the provisions of Statement
of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock
Based Compensation." SFAS 123 allows companies to continue to account for their
stock option plans in accordance with APB Opinion 25 but encourages the adoption
of a new accounting method based on the estimated fair value of employee stock
options. Companies electing not to follow the new fair value based method are
required to provide expanded footnote disclosures, including proforma net income
and earnings per share, determined as if the company had applied the new method.

     The Company measures stock based compensation cost as the excess of the
market value of the Company's common stock at the grant date over any amount the
employee pays for the stock. The application of this pronouncement did not have
a material effect on the financial statements of the Company.

     Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly-liquid instruments purchased with a maturity of
three months or less to be cash equivalents.

                                      20

<PAGE>

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                                   (CONTINUED)

     Earnings Per Share - For the year ended April 30, 1998, the Company adopted
Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share," SFAS 128 is effective for financial statements issued for periods ending
after December 15, 1997. SFAS 128 provides for the calculation of basic and
diluted earnings per share. Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilutive effect of securities that could share in earnings of an
entity. At April 30, 1998, there were no securities which had a dilutive effect.

     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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

     Reclassifications - Certain reclassifications have been made in prior year
consolidated financial statements to conform to the presentation in the 1998
consolidated financial statements.

     Recent Accounting Pronouncements - Statement of Financial Accounting
Standards No. 129 (SFAS 129), "Disclosure of Information about Capital
Structure, " effective for periods ending after December 15, 1997, establishes
standards for disclosing information about an entity's capital structure. SFAS
129 requires disclosure of the pertinent rights and privileges of various
securities outstanding (stock, options, warrants, preferred stock, debt and
participation rights) including dividend and liquidation preferences,
participant rights, call prices and dates, conversion or exercise prices and
redemption requirements. Adoption of SFAS 129 had no effect on the Company
because it currently discloses the information specified.

     Statement of Financial Accounting No. 130 (SFAS 130), "Reporting
Comprehensive Income," effective for periods beginning after December 15, 1997,
establishes standards for reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income is defined to include
all changes in equity except those resulting from investments by owners and
distributions to owners. Among other disclosures, SFAS 130 requires that all
items that are required to be recognized under current accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. Adoption of
this Statement will not have a material impact on the financial statements of
the Company.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information," which
supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise." SFAS 131 establishes standards for the way that public companies
report information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in interim
financial statements issued to the public. It also establishes standards for
disclosures regarding products and services, geographic areas and major
customers. SFAS 131 defines operating segments as components of a company about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources and in
assessing performance.

     SFAS 131 is effective for financial statements for periods beginning after
December 15, 1997 and requires comparative information for earlier years to be
restated. Adoption of this Statement will not have a material impact on the
financial statements of the Company.

                                       21



<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ACCOUNTS RECEIVABLE - The balance of accounts receivable is comprised
of the following:

                                                     April 30,
                                             -------------------------
                                             1998                 1997
                                             ----                 ----
     Flight operations contracts
      and programs                        $3,865,805           $2,170,518
     Trade                                   140,558              125,708
     Other receivables                       181,126               78,781
                                          ----------           ----------
                                           4,187,489            2,375,007
     Less:  allowance for
      doubtful accounts                     (198,416)            (144,637)
                                          ----------           ----------
                                          $3,989,073           $2,230,370
                                          ----------           ----------

Accounts receivable from flight operations contracts and programs consist of the
following:

                                                     April 30,
                                             -------------------------
                                             1998                 1997
                                             ----                 ----
     U.S. Government
      Amounts billed                      $2,981,540           $  410,533
      Services provided,
       not billed                            536,686            1,033,647
                                          ----------           ----------
                                           3,518,226            1,444,180
                                          ----------           ----------

     Commercial Customers
      Amounts billed                         334,821              664,290
      Services provided,
       not billed                             12,758               62,048
                                          ----------           ----------
                                             347,579              726,338
                                          ----------           ----------

     Total flight operations
      contracts and programs              $3,865,805           $2,170,518
                                          ----------           ----------

     Accounts receivable are billed in accordance with the terms of the
contracts under which they arise. Amounts not billed represent services
performed between the last billing date and year end.

                                    22


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

NOTE 2 - INVENTORIES - Inventories are compromised of:

                                                    April 30,
                                            -------------------------
                                            1998                 1997
                                            ----                 ----
     Aircraft parts                     $1,922,921           $1,634,890
     Targets and cable                     143,341              135,260
     Fuel                                   21,438               20,740
                                        ----------           ----------
                                        $2,087,700           $1,790,890
                                        ----------           ----------

NOTE 3 - PROPERTY AND EQUIPMENT - Property and equipment consist of the
following:

                                                    April 30,
                                            -------------------------
                                            1998                 1997
                                            ----                 ----
     Aircraft and engines               $2,440,583           $2,289,820
     Electronic warfare equipment          519,147              519,147
     Leasehold interests                 1,999,791            1,999,791
     Office furniture and fixtures          85,707               78,962
     Other equipment                       838,150              701,128
                                        ----------           ----------
                                         5,883,378            5,588,848
     Accumulated depreciation
      and amortization                  (1,787,361)          (1,322,250)
                                        ----------           ----------

     Property and equipment, net        $4,096,017           $4,266,598
                                        ----------           ----------


NOTE 4 - NOTES PAYABLE - During the year ended April 30, 1998 the Company
entered into at $2,000,000 asset based borrowing agreement with a bank in
Newport News, Virginia. Under the terms of the agreement, the Company may obtain
advances up to 85% of amounts billed by the Company on government contracts. The
Company must pay interest at prime plus .50% on outstanding advances. Under the
agreement, the Company must maintain certain net worth ratios. The Company was
in compliance with these ratios at April 30, 1998.
Outstanding advances at April 30, 1998 were $451,097.

                                     23


<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (CONTINUED)



NOTE 5 - LONG-TERM DEBT - Long-term debt consists of the following:

                                                               April 30,
                                                            ----------------
                                                            1998        1997
                                                            ----        ----
Note payable to bank with interest payable at 8.5%, 
  due in monthly installments of principal and interest, 
  beginning at $19,000 and ending at $37,000, through
  November 1, 2003, secured by a first mortgage deed of 
  trust on leasehold improvements and assignment of 
  leases on certain real property located in Newport 
  News, Virginia.                                        $1,692,653   $1,862,609

Note payable to bank with interest payable at 8.9%, 
  due in equal monthly installments of principal and 
  interest of $376 maturing on March 1, 2003, secured 
  by a vehicle.                                              17,808        -

Note payable to finance company with interest payable 
  at 8%, due in equal monthly installments of principal 
  and interest of $7,800 through August 30, 1999, and a 
  final payment of principal and unpaid interest of 
  approximately $17,768 due September 30, 1999, secured 
  by certain property and equipment.                        133,868      213,277

Note payable to bank with interest payable at 9.25%, 
  due in equal monthly principal installments of $15,938 
  plus interest through January 15, 2005, secured by 
  aircraft.                                               1,290,938        -

Note payable to finance company with interest payable 
  at 8%, due in equal monthly installments of principal 
  and interest of $30,000 through December 20, 1999, and 
  a final payment of principal and unpaid interest of 
  $338,120 due January 20, 2000, secured by certain 
  property and equipment.                                    -         1,133,481

Note payable to bank with interest payable at 7% through 
  December 8, 1999, and at the five-year U.S. Treasury Bill 
  rate plus 2.10% through December 8, 2001, due in monthly 
  installments of principal and interest of approximately 
  $15,333 through December 8, 2001, secured by inventory.   547,202      713,052
                                                         ----------   ----------

                                                          3,682,469    3,922,419
  Current maturities                                        652,238      640,351
                                                         ----------   ----------

  Long-term debt, net                                    $3,030,231   $3,282,068
                                                         ----------   ----------


                                  24


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

NOTE 5 - LONG-TERM DEBT (CONTINUED) -

At April 30, 1998, aggregate principal payments due for long-term debt for the
next five fiscal years and thereafter were as follows:


                   1999                                         $  652,238
                   2000                                            654,090
                   2001                                            658,895
                   2002                                            600,831
                   2003                                            591,304
               Thereafter                                          525,111
                                                                ----------
                                                                $3,682,469
                                                                ----------

NOTE 6 - INCOME TAXES - Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.

The sources of temporary differences and their effect on net deferred tax asset
are as follows:

                                                  April 30,
                                          ------------------------
                                          1998                1997
                                          ----                ----
     Deferred revenue                 $  638,000           $  707,000
     Engine reserve                      308,000              173,000
     Allowance for bad debts              75,000               55,000
     Vacation expense                     46,000               41,000
     Installment sale                     27,000               54,000
     Net operating loss carryforwards  2,991,000            3,703,000
     Basis difference of property and 
       equipment                        (262,000)            (322,000)
                                      ----------           ----------

     Net deferred tax asset            3,823,000            4,411,000
                                      ----------           ----------

     Valuation allowance              (3,823,000)          (4,411,000)
                                      ----------           ----------

                                      $    -               $    -
                                      ----------           ----------

                               25
<PAGE>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

NOTE 6 - INCOME TAXES (CONTINUED) - The provision for income taxes differs from
the amount determined by applying federal statutory tax rates to pre-tax income
as a result of the utilization of net operating loss carryforwards. Income tax
expense is comprised of federal alternative minimum tax and state taxes.

As of April 30, 1998, the cumulative net operating loss available for federal
income tax purposes was $7,900,000, which will expire primarily in the 2006 -
2011 period, subject to certain limitations due to reorganization, if not
previously utilized.

NOTE 7 - OPERATING LEASE COMMITMENTS - The Company leases various aircraft and
engines under operating leases for use on government contracts. Total lease
expense for these aircraft was $6,306,363 and $4,322,745 for the years ended
April 30, 1998 and 1997, respectively. Such lease expenses included
approximately $3,485,000 and $1,809,000 for the years ended April 30, 1998 and
1997, respectively, for contingent rentals based on hours flown.

The Company leases various office facilities and airport property under lease
arrangements with terms expiring through May 2004. Other operating leases are
for office machines and aircraft maintenance equipment. The lease expense for
these operating leases was $343,000 and $364,000 for the years ended April 30,
1998 and 1997 respectively. Such lease expenses included approximately $94,000
and $109,000 for the years ended April 30, 1998 and 1997, respectively, for
contingent rentals based on revenue.

At April 30, 1998, future minimum lease payments on operating leases for each of
the next five fiscal years and thereafter were as follows:

              1999                                         $1,553,000
              2000                                            110,000
              2001                                            111,000
              2002                                            112,000
              2003                                            112,000
           Thereafter                                          86,000
                                                           ----------
                                                           $2,084,000
                                                           ----------

                                    26
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)


NOTE 8 - CLAIMS, CONTINGENCIES, AND COMMITMENTS - On February 4, 1994, the
Company filed voluntary petitions in the United States Bankruptcy Court for the
Eastern District of Virginia (the "Bankruptcy Court") for reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Code"). On December 8,
1994, the Bankruptcy Court entered an order confirming the Company's joint plan
of reorganization (the "Plan"), and the Plan became effective on December 28,
1994 (the "Effective Date"). For accounting purposes, the effective date was
deemed to be December 31, 1994.

Pursuant to the Plan, a total of 1,000,000 shares of new common stock were
authorized and 998,976 shares were issued. The 9,899,713 shares of common stock
previously outstanding were retired. Of the new shares of common stock issued,
51,000 shares are being held by the Company to satisfy the remaining claims of
the unsecured creditors. The Company anticipates that a final distribution of
the remaining shares based on the final valuation of all general unsecured
claims will be completed by April 30, 1999.

Priority tax claims, which arose from the plan, are being paid over a period of
six years together with interest thereon. Unpaid claims amounted to
approximately $154,000 and $199,000 at April 30, 1998 and 1997, respectively,
and are included in accrued expenses and other long term liabilities.

On May 7, 1996, the Company received notification of a grand jury subpoena
issued on behalf of the United States Information Agency (USIA) for records of
Flight International Aviation, Inc. and Flight International Aviation Training
Center, Inc. pertaining to the administration of training pursuant to the J-1
Exchange Visitor Program. The Company has produced all documents in its
possession and has cooperated with the investigation. The Company has not been
identified as a "target" of any criminal investigation nor have any civil claims
been asserted against the Company. In addition, the Company has not operated the
Training Center since November 1, 1994. Management of the Company believes that
the ultimate settlement of this matter will not have a material adverse effect
on the Company's financial position or results of operations.

NOTE 9 - EMPLOYEE BENEFIT PLANS - The Company sponsors a defined contribution
pension plan covering all eligible employees. Employees become eligible to
participate upon completing one year of service in a job classification not
subject to a collective bargaining agreement. One year of service is defined as
any consecutive 12 month period in which the employee works 1,000 hours.
Participants may elect to have 1% to 15% of their compensation contributed to
the Plan, up to the maximum allowed by law. Prior to June 9, 1997, contributions
to the Plan were matched by the Company at the rate of 30% of the first 5% of
employees' contributions. All employee contributions, rollover contributions,
and earnings thereon are 100% vested. Company contributions vest at a rate of
20% per year. The participant may designate his contribution and employer
matching contributions to be invested in any combination of seven money market,
stock or bond funds maintained by the Trustee. After a participant dies or
retires, the participant or his beneficiary is entitled to receive the entire
vested balance of his account. Effective June 9, 1997, the Company increased its
match to 40% of the first 5% of employees' contributions.

The Company reserves the right to amend or terminate the Plan at any time. If
the Plan is terminated, each participant is then vested with the amount in their
account. The Company contributed $45,785 and $31,921 to the plan for the years
ended April 30, 1998 and 1997, respectively.

                                   27

<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

NOTE 10 - TRANSACTIONS WITH MAJOR CUSTOMER - Revenues from all U.S. government
contracts included in the Flight operations segment are as follows:

                                                               Percent
                                        Amount              Total Revenue
                                        ------              -------------
 Fiscal year ended April 30, 1998    $17,174,000                 78%
 Fiscal year ended April 30, 1997    $11,403,000                 60%

NOTE 11 - RELATED PARTIES - The Company has entered into lease agreements with
Maritime Sales and Leasing ("MSL") for certain aircraft which require future
minimum lease payments of approximately $1.4 million through October, 1999.
David Sandlin, President and CEO of the Company, is also an officer of MSL.

During 1996, the Company entered into a lease with the Aviation Company. David
Sandlin has an ownership interest in the Aviation Company. The single aircraft
lease calls for payments of $500 per hour flown. Approximately $24,000 and
$67,000 of lease expense was incurred for the years ended April 30, 1998 and
1997, respectively.

On April 15, 1996, the Company sold three planes to MSL for $2.9 million. The
Company leased the planes back from MSL for a three year period. Proceeds from
the sale were distributed as follows: $1.85 million to payoff bank debt;
$106,000 to MSL for lease deposits; and the remainder to the Company. The
Company realized a $218,000 gain related to the sale/leaseback which was
deferred over the lease term, and a $313,793 extraordinary gain related to the
early extinguishment of related bank debt.

Total rent expense on all related party leases were approximately as follows:

 Fiscal year ended April 30, 1998                  $2,696,000
 Fiscal year ended April 30, 1997                  $2,415,000

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial instruments which
potentially subject the Company to concentrations of credit risk consist
principally of cash and cash equivalents, and trade receivables. The Company
places its cash and cash equivalents with high credit qualified financial
institutions.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents - The carrying amounts approximate fair value because
of the short maturity of these instruments.

Debt - The aggregate fair value of the Company's long-term debt obligations,
which is based upon quoted market prices and rates currently available to the
Company for debt with similar terms and maturities, approximates the carrying
amount.

                                28


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

NOTE 13 - STOCKHOLDERS' EQUITY - During the year ended April 30, 1998, the
Company granted to an officer of the Company, 38,000 stock options at an
exercise price of $2.00 per share. The options are fully vested and expire in
2008. Total options vested and outstanding at April 30, 1998 are 38,000.

The Company applies APB Opinion 25 and related interpretations in accounting for
stock options. Accordingly, no compensation cost has been recognized. The
weighted average fair value of options granted at April 30, 1998 is $.84.
Proforma net income and basic earnings per share under the provisions of SFAS
123 for the effect of options granted and outstanding for the year ended April
30, 1998 are $693,993 and $.68, respectively. There is no dilutive effect under
the provisions of SFAS 123. For the purposes of computing the proforma amounts,
the fair value of each option on the date of grant is estimated using the
Block-Scholes option pricing model with the following assumptions: no dividend
yield, zero expected volatility, risk-free interest rate of 5.67% and expected
life of ten years.

                                      29
<PAGE>

                    REPORT OF INDEPENDENT CERTIFIED PUBLIC
                                 ACCOUNTANTS

To the Board of Directors and Stockholders of
The Flight International Group, Inc.

We have audited the accompanying consolidated balance sheets of The Flight
International Group, Inc. and subsidiaries as of April 30, 1998 and 1997, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Flight
International Group, Inc. and subsidiaries as of April 30, 1998 and 1997, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

                                     /s/BDO Seidman, LLP
                                     
Richmond, Virginia                   BDO Seidman, LLP
June 16, 1998

                                   30


<PAGE>
ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

         Not Applicable.

                                   PART III

ITEM 9.           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

         The current officers and directors will serve for terms of one year or
until their respective successors are elected and qualified. The current
officers and directors are:

Name                   Age      Date of Election    Position
----                   ---      ----------------    --------
David E. Sandlin       54       March 30, 1994      Chairman, President,
                                                    Director

Wayne M. Richmon       41       February 13, 1995   Executive Vice President,
                                                    Treasurer, Chief Financial
                                                    Officer, Director

David R. Sharp         58       October 1, 1996     Vice President, Chief
                                                    Operating Officer

Gary D. Reinhart       62       April 13, 1993      Vice Pres. of
                                                    Administration

Ann P. Campbell        59       April 13, 1993      Secretary

C. Lofton Fouts, Jr.   66       February 13, 1995   Director

John R. Bone           47       February 13, 1995   Director

Vice Admiral 
Richard M. Dunleavy 
(Ret.)                 65       May 24, 1995        Director

         The Plan requires that the Company's Board of Directors remain at six
(6) members until changed by vote of shareholders. The members of the Board of
Directors need not be shareholders of the Company. Further, the Plan requires
that three members of the Board of Directors may be, but are not required to be,
officers, employees, consultants or independent contractors engaged, employed or
retained by the Company or

                                    31        

<PAGE>
its subsidiaries and/or affiliates.  Messrs. Sandlin, Richmon and Bone
represent these three directors.  The remaining three directors shall consist
of individuals who are not directly or indirectly engaged, employed or retained
by the Company or its subsidiaries and/or affiliates.  Messrs. Fouts and
Dunleavy represent two of these three directors.  James N. Lingan was the third
of these "independent" directors until his death in March of 1998. The Board of
Directors has begun the process of seeking a replacement for Mr. Lingan and is
hopeful that a replacement can be found prior to September 1, 1998.

         Each director and executive officer's business experience during the
past five years is described below:

         David E. Sandlin.  Mr. Sandlin has been Chairman, President and a
Director of the Company and its subsidiaries since March 30, 1994, and was
formerly President of Flight International's Sales and Leasing Division.  Mr.
Sandlin has been involved in aircraft marketing and management since 1978.  He
has worked in various capacities for Cessna and Dassault and has extensive
experience with Learjets.  In 1990 he founded DESCO Aviation Consultants
International ("DESCO") and is an officer, director and 50% shareholder of
Maritime Sales & Leasing, Inc. ("Maritime"), a major lessor of turbine
aircraft.  Maritime has leased a total of 16 aircraft to FII.  Mr. Sandlin also
is a one-third owner of The Aviation Company ("TAC"), which has leased one
aircraft to the Company.  See Item 12, "Certain Relationships and Related
Transactions."

         Wayne M. Richmon. Mr. Richmon, Executive Vice President, Treasurer,
Chief Financial Officer and Director, joined the Company in 1992, and is
responsible for finance, corporate administration, human resources, management
information services and contract administration. Prior to joining the Company,
he served previously as Chief Financial Officer for American Systems Engineering
Company and held management positions at two national "big six" accounting
firms, specializing in government contract and consulting services.
Mr. Richmon is a CPA registered in the State of Virginia.

         David R. Sharp. Mr. Sharp, Vice President and Chief Operating Officer,
joined the Company in 1987 after 26 years as a U.S. Navy officer, retiring with
the rank of Captain. He was Director of Navy Programs for the Company until
October 1992, when he resigned to pursue other interests. Prior to returning to
the Company in May 1995 as Director of Government Marketing he served as a
consultant and held positions in marketing and program management. He is
currently responsible for all commercial and government operations of the
Company.

         Gary D. Reinhart. Mr. Reinhart, Vice President, Administration, joined
the Company in 1987 as Director of Purchasing and has also served as Director,
Materials and Risk Management.  Mr. Reinhart previously worked in corporate and
group management positions with Bendix/ Allied Signal for 28 years.

         Ann P. Campbell. Ms. Campbell, Corporate Secretary, joined the Company
in 1987 as Secretary to the Chief Financial Officer of the Company.  Since that
time, she has served as Executive Secretary to the Chief Operating Officer and
President, and Assistant to the Chairman.  Ms. Campbell has over fifteen years
experience as a legal secretary and currently serves as Executive Secretary to
the Chairman and to the Chief Financial Officer.

                                    32

<PAGE>
         C. Lofton Fouts, Jr. Mr. Fouts, Director, has been involved in the
aviation industry for 29 years. He wrote the original Piper Flite Center
training syllabus, the first standardized flight program used nationwide in the
general aviation industry. In 1988, Mr. Fouts formed Lofton Fouts & Associates,
Inc., a general aviation consulting business specializing in sales, acquisitions
and mergers of fixed base operations and related aviation businesses.

         John R. Bone.  Mr. Bone, Director, is President of Global Jet, a
corporate aircraft sales and brokerage firm, and is an officer, director and
50% shareholder of Maritime.  Mr. Bone studied aeronautical engineering at
Northrup University.  He is an A&P mechanic, has worked as Chief Pilot for
major U.S. companies and currently is a pilot with a major United States
airline.  Global Jet, with Mr. Bone, has been instrumental in developing the
fleet of Learjets for Phoenix Air Group, a competitor of FII.  See Item 12,
"Certain Relationships and Related Transactions."

         Vice Admiral Richard M. Dunleavy (Ret.).  Admiral Dunleavy, Director,
was formerly Assistant Chief of Naval Operations (Air Warfare).  Admiral
Dunleavy joined the Staff of the Chief of Naval Operations in 1976.  From 1978
to 1979 he was Commanding Officer of the USS Ponchatoula and assumed command of 
the USS Coral Sea in 1979.  In 1981 he was selected as Commander of U.S. Naval
Forces in the Philippines and later became Commander, Carrier Group
FOUR/Commander Striking Force Atlantic.  From 1986 to 1989 he was Commander,
Naval Air Force, U.S. Atlantic Fleet.  Admiral Dunleavy's  military  awards 
include a Distinguished Service Medal, three Legions of Merit, eight Air Medals
and four Navy Commendation Medals.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The Company believes that all required Forms 3 and 4 were furnished to
the Registrant during the fiscal year ended April 30, 1998.

ITEM 10.          EXECUTIVE COMPENSATION

         The response to this item will be included in a definitive proxy
statement filed within 120 days after the end of the Company's fiscal year,
which proxy statement is incorporated herein by this reference.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

         The response to this item will be included in a definitive proxy
statement filed within 120 days after the end of the Company's fiscal year,
which proxy statement is incorporated herein by this reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Mr. Sandlin is an officer, director and 50% shareholder of Maritime, a
major lessor of turbine aircraft. Maritime has leased a total of 16 aircraft to
FII at a total cost to FII of $2,696,000 for the fiscal year ended April 30,
1998. The Company believes the financial and other arrangements between FII and
Maritime are reasonable and

                                     33

<PAGE>
fair and similar to arrangements which would have been made in an arm's length
transaction between FII and an unaffiliated third party. The Company does not
believe that Mr. Sandlin's relationship with Maritime materially interferes with
his ability to fully perform his obligations to the Company as a director,
officer and employee.

         Mr. Sandlin is also a one-third owner of TAC, which has leased one Casa
235 aircraft to the Company. In anticipation of a project to send Casa 235
aircraft to Bahrain, the Company sought to lease a plane from TAC. In
expectation of this lease, TAC purchased the aircraft intended for the lease.
Thereafter, this project was eliminated due to DOD budget cutting. However, the
aircraft was leased to the Company in January, 1996. As of April 30, 1998, the
Company had not found a full time use for the aircraft. Prior to April 30, 1996,
this situation had been causing harm to its cash flow. On April 30, 1996, the
lease was modified from $60,000 per month to $500 per hour flown. This has
substantially reduced the cost of carrying this aircraft, although certain other
significant expenses, such as insurance and other maintenance, continue.
However, for six months during the fiscal year ended April 30, 1998, TAC
arranged for the use of this aircraft by a third party which bore all of the
expenses related to this aircraft during such period. There are no assurances
that any such arrangement will continue. The Company believes that the financial
and other arrangements between FII and TAC are reasonable and fair and similar
to arrangements which would have been made in an arm's length transaction
between FII and an unaffiliated third party.

         Mr. Bone is an officer, director and 50% shareholder of Maritime. In
addition, Mr. Bone is the sole shareholder, director and officer of Global Jet
("Global Jet"), which, with Mr. Bone, has been instrumental in developing the
fleet of Learjets for Phoenix Air Group, a competitor of FII. The Company does
not believe that Mr. Bone's relationships with Maritime and Global Jet
materially interfere with Mr. Bone's ability to fully perform his obligations to
the Company as a director.

         The Board of Directors of the Company currently requires approval or
ratification by the Board of all related party transactions.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         1. The exhibits required to be filed as part of this Annual Report on
Form 10-KSB are listed in the attached Exhibit Index.

         2. During the quarter ended April 30, 1998, the Company filed no
Current Reports on Form 8-K.

                                  34

<PAGE>
                                SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Dated: July      , 1998                THE FLIGHT INTERNATIONAL GROUP, INC.


                                       By:    /s/ David E. Sandlin
                                         David E. Sandlin
                                         Principal Executive Officer


                                       By:    /s/ Wayne M. Richmon
                                         Wayne M. Richmon
                                         Principal Financial Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons of the Registrant and in the capacities and on the
dates indicated.

        Signature                     Title                      Date

        s/ David E. Sandlin           Director and               July    , 1998
        -------------------           Principal Executive
        David E. Sandlin              Officer
                                      

        s/ Wayne M. Richmon           Director and               July    , 1998
        -------------------           Principal Financial      
        Wayne M. Richmon              Officer

        s/ C. Lofton Fouts, Jr.       Director                   July    , 1998
        -----------------------                               
        C. Lofton Fouts, Jr.

        s/ John R. Bone               Director                   July    , 1998
        ---------------                                      
        John R. Bone

        s/ Vice Admiral
        ---------------
        Richard M. Dunleavy (Ret.)    Director                   July    , 1998
        --------------------------                              
        Vice Admiral
        Richard M. Dunleavy (Ret.)


                                     35

<PAGE>
     EXHIBIT INDEX

Exhibit
Number            Page     Description
-------           ----     -----------
3(a)                       Amended and Restated Articles of Incorporation of the
                           Company (incorporated by reference to the Company's
                           Report on Form 10-KSB for the fiscal year ended April
                           30, 1996).

3(b)                       Bylaws of the Company (incorporated by reference to
                           the Company's Report on Form 10-KSB for the fiscal
                           year ended April 30, 1996).

10(a)                      Lease Agreement dated November 8, 1984 between the 
                           Peninsula Airport Commission and Flight 
                           International Aviation, Inc., as amended. 
                           (incorporated by reference to Exhibit 10(n) to the
                           Company's Report on Form 10-K for the fiscal year 
                           ended April 30, 1988).

10(b)                      Award/Contract No. N00421-92-C-0134 dated September 
                           15, 1992, issued by the United States Naval Weapons 
                           Center, Patuxent River, MD to Flight International, 
                           Inc. (incorporated by reference to the Company's 
                           Report on Form 10-KSB for the fiscal year ended 
                           April 30, 1996).

10(c)                      Award/Contract No. N68936-94-C-0086 dated November 
                           21, 1994, issued by the United States Naval Weapons 
                           Center, China Lake, CA to Flight International, 
                           Inc. (incorporated by reference to the Company's 
                           Report on Form 10-KSB for the fiscal year ended
                           April 30, 1996).

10(d)                      Collateral Retention and Adequate Protection 
                           Agreement dated July 25, 1994 among Flight 
                           International Inc., Flight International of 
                           Florida, Inc. and First Tennessee Equipment Finance 
                           Corporation (incorporated by reference to Exhibit 2 
                           to the Company's Current Report on Form 8-K dated 
                           December 20, 1994).

10(e)                      Collateral Retention and Adequate Protection 
                           Agreement dated July 29, 1994 among Flight 
                           International Inc., Flight International of 
                           Florida, Inc., the Company and Michigan National 
                           Bank (incorporated by reference to Exhibit 2 to the
                           Company's Current Report on Form 8-K dated December 
                           20, 1994).

                                      36

<PAGE>
10(f)                      Amended Secured Promissory Note between Signet 
                           Bank/Virginia and Flight International Aviation, 
                           Inc. dated October 13, 1994 (incorporated by 
                           reference to Exhibit 2 to the Company's Current 
                           Report on Form 8-K dated December 20, 1994).

10(g)                      Stipulation Regarding Adequate Protection of 
                           Interest of Nations Financial Capital Corporation 
                           in Certain Aircraft Owned By Debtor dated December 
                           14, 1994 between Flight International of Florida, 
                           Inc. and Nations Financial Capital Corporation 
                           (incorporated by reference to Exhibit 2 to the
                           Company's Current Report on Form 8- K dated 
                           December 20, 1994).

10(h)                      Agreement on Use of Cash Collateral and for Loan 
                           Restructure dated December 14, 1994 between Flight 
                           International, Inc. and SouthTrust Bank of Alabama, 
                           N. A. (incorporated by reference to Exhibit 2 to 
                           the Company's Current Report on Form 8-K dated
                           December 20, 1994).

10(i)                      Collateral Retention and Adequate Protection 
                           Agreement dated December 14, 1994 among Flight 
                           International Inc., Flight International of 
                           Florida, Inc., the Company and Lease Plan U.S.A. 
                           (incorporated by reference to Exhibit 2 to the
                           Company's Current Report on Form 8-K dated December 
                           20, 1994).

10(j)                      Employment Agreement dated January 3, 1995 between 
                           the Company and David E. Sandlin (incorporated by 
                           reference to the Company's Report on Form 10-KSB 
                           for the fiscal year ended April 30, 1995).

10(k)                      Employment Agreement dated January 3, 1995 between 
                           the Company and Wayne M. Richmon (incorporated by 
                           reference to the Company's Report on Form 10-KSB 
                           for the fiscal year ended April 30, 1995).

10(l)                      Award/Contract No. N00019 dated August 30, 1996, 
                           issued by the United States Naval Air Systems 
                           Command, AIR-2.5.3, Patuxent River, MD to Flight 
                           International, Inc. ("CAS-MOS" Contract) 
                           (incorporated by reference to the Company's Report on
                           Form 10-KSB/A for the fiscal year ended April 30, 
                           1996). Certain portions of this Exhibit have been 
                           omitted based upon a request for confidential 
                           treatment with the Securities and Exchange 
                           Commission (the "Commission"). The confidential
                           portions have been filed with the Commission.


                                    37

<PAGE>

10(m)                      Intentionally omitted.

10(n)                      Intentionally omitted.

10(o)                      Fourth Modification Agreement, dated as of April 
                           30, 1996, by and between Flight International 
                           Aviation, Inc., Steven D. Delaney, Otto W. Konrad 
                           and Signet Bank (incorporated by reference to the 
                           Company's Report on Form 10-KSB for the fiscal year 
                           ended April 30, 1996).

10(p)                      Amended and Restated Deed of Trust Note, dated 
                           April 30, 1996, from Flight International Aviation, 
                           Inc., as maker, to Signet Bank (incorporated by 
                           reference to the Company's Report on Form 10-KSB 
                           for the fiscal year ended April 30, 1996).

10(q)                      Documents Relating to Crestar Bank Loan (incorporated
                           by reference to the Company's Report on form 10-QSB
                           for the quarter ended January 31, 1998).

10(r)                      Documents Relating to Wachovia Bank Refinancing
                           (incorporated by reference to the Company's Report on
                           Form 10-QSB for the quarter ended January 31, 1998).

10(s)                      Option Agreement between David E. Sandlin and the 
                           Company dated March 9, 1998.

22                         Subsidiaries of the Company (incorporated by
                           reference to the Company's Report on Form 10-KSB for
                           the fiscal year ended April 30, 1995).

27                         Financial Data Schedule.


                                 38