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

                                   FORM 10-Q

(MARK ONE)

[X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
             SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2011

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
             SECURITIES EXCHANGE ACT OF 1934

              For the transition period from                  to

                         COMMISSION FILE NUMBER 0-30503
                                                -------

                          AVSTAR AVIATION GROUP, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                 COLORADO                             76-0635938
(State or other jurisdiction of incorporation    (I.R.S. Employer
            or organization)                     Identification No.)

                 3600 Gessner, Suite 220, Houston, Texas 77063
                    (Address of principal executive offices)

                                  713-965-7582
                        (Registrant's telephone number)

Check  whether  the issuer (1) 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 [ ]

Indicate  by  check mark whether the registrant has submitted electronically and
posted  on  its corporate Web site, if any, every Interactive Data File required
to  be  submitted  and posted pursuant to Rule 405 of Regulation S-T (232.405 of
this  chapter)  during  the preceding 12 months (or for such shorter period that
the  registrant  was  required  to submit and post such files).  Yes [ ]  No [X]

Indicate  by  check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.  See
the  definitions  of "large accelerated filer," "accelerated filer" and "smaller
reporting  company"  in  Rule  12b-2  of  the  Exchange  Act  (Check  one).

Large accelerated filer           [ ]    Accelerated filer            [ ]

Non-accelerated filer             [ ]    Smaller reporting company    [X]
(Do  not  check  if  smaller  reporting  company)
<PAGE>
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes  [ ] No [X]

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable  date: 469,110,950 common shares as of
November  18,  2011

<PAGE>

PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.


                                  BALANCE SHEET
                             AVSTAR AVIATION GROUP, INC.
                             Period End: September 30, 2011


                                                 September 30,   December 31,
                                                   2011              2010
                ASSETS

Current assets
     Cash                                           5,865           5,648
     Accounts receivable                          189,208         146,826
     Prepaid expenses                              25,757           4,858
     Inventory                                          -          11,008
                                                  -----------------------
     Total Current Assets                         220,830         168,340

Property and equipment:                            85,996           9,819

Investment in subsidiary                          894,035         781,840
                                                -------------------------
     Total Assets                               1,200,861         959,999
                                                =========================
<PAGE>
                            BALANCE SHEET
                      Period End: September 30, 2011


                                                 September 30,  December 31,
                                                    2011           2010

     LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
     Accounts payable                             135,402           83,189
     Other current liabilities                    323,769                -
     Accrued interest payable to related parties  132,517           99,197
     Notes payable to related parties             226,447          477,336
     Notes payable - other                         91,148          383,574
                                                 -------------------------
     Total current liabilities                    909,283        1,043,296

Long term debt to related parties               1,123,226        1,057,477
                                                 -------------------------
     Total liabilities                          2,032,509        2,100,773


Stockholders' deficit:
     Preferred stock: $.001 par value;
       1,000,000 shares authorized,
       none issued and outstanding
     Common stock: $.001 par value;
       500,000,000 shares authorized;
       390,197,002 and 176,899,542 shares
       issued and outstanding at September 30,
       2011 and  December 31, 2010,
       respectively                              390,197           176,900
     Additional paid-in capital               21,618,183        21,441,852
     Accumulated deficit                     (22,840,028)      (22,759,526)
                                             -----------------------------
     Total stockholders' deficit                (831,648)       (1,140,774)
                                             -----------------------------
 Total liabilities and stockholders' deficit   1,200,861           959,999
                                             =============================

<PAGE>
                          AVSTAR AVIATION GROUP, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)

                                     Three Months Ended     Nine Months Ended
                                        September 30          September 30
                                       2011    2010          2011        2010

Oil and gas revenue                    $997          $-    $10,492       $1,231
Income from aviation operations     520,156     516,893  1,741,603    1,121,756
                                    -------------------------------------------
Total revenue                       521,153     516,893  1,752,251    1,122,987

Costs and expenses:
Cost of goods sold                  449,775     448,692  1,380,461      873,308
Lease operating expenses
Production taxes
Dry hole costs                                    -
Depreciation and depletion              260       2,226        780        8,226
Selling, general and administrative,
expenses                            141,159     322,632    417,592    1,245,312
                                    -------------------------------------------

Total costs and expenses            591,194     773,550  1,798,833    2,126,846
                                    -------------------------------------------
Income (Loss) from operations       (70,041)   (256,657)   (46,582)  (1,003,859)

Other (expenses):
Interest expense                     11,400                33,920
                                   --------------------------------------------
Net income (loss)                  $(81,441)  $(256,657)  (80,502)  $(1,003,859)
                                   ============================================

Basic and diluted net loss per
common share                       $(0.0002)  $ (0.0017) $ (0.003)  $   (0.0066)

Weighted average common shares  334,992,772 151,899,542 283,548,272 151,899,542
<PAGE>
                             AVSTAR AVIATION GROUP, INC.
                  UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                       for the nine months ended September 30, 2011 and 2010
                                         (Unaudited)

                                                  Nine Months Ended
                                                    September 30
                                                 2011             2010

Cash flows from operating activities:
Net income (loss)                     $      (80,502)         $(131,355)
Adjustments to reconcile net loss to
net cash used in operating activities       (221,339)           106,892
                                     -----------------------------------
Net cash used in operating activities       (301,841)           (24,463)

Cash flows from investing activities        (146,396)                 -

Cash flows from financing activities         440,740              25,000
                                     -----------------------------------
Net increase (decrease) in cash and
cash equivalents                              (7,974)                537

Cash and cash equivalents at beginning
   of period                                  13,839                8,998
                                    -------------------------------------
Cash and cash equivalents at end of
   period                                   $  5,865            $   9,535
                                   ======================================

<PAGE>
                           AVSTAR AVIATION GROUP, INC.
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                      For the Nine Months ended September 30, 2011



                                             Additional                Total
                           Common Stock       Paid-In  Accumulated Stockholders'
                          Shares     Amount    Capital   Deficit      Deficit

Balances as of
  December 31,
  2010                    176,899,542 176,900 21,441,852 (22,759,526)(1,140,774)

Debt conversion           213,297,460 213,297    176,331                389,627

Imputed interest                                                              0

 Gain on conversion

Net income                                                   (80,502)   (80,502
                 --------------------------------------------------------------
Balance at September
   30, 2011             390,197,002  390,197 21,618,183  (22,840,028)  (831,648)
              ==================================================================
<PAGE>
                          AVSTAR AVIATION GROUP, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.     BASIS  OF  PRESENTATION

     The  accompanying  unaudited  interim  consolidated financial statements of
AvStar  Aviation  Group,  Inc.  (the "Company"), a Colorado corporation formerly
known  as  "Pangea  Petroleum  Corp.,"  have  been  prepared  in accordance with
accounting principles generally accepted in the United States of America and the
rules  of  the Securities and Exchange Commission (the "SEC") and should be read
in conjunction with the audited financial statements and notes thereto contained
in  the  Company 's latest Annual Report on Form 10-K filed with the SEC. In the
opinion  of  management,  all  adjustments,  consisting  of  normal  recurring
adjustments,  necessary  for  a  fair presentation of financial position and the
results  of  operations  for  the  interim periods presented have been reflected
herein.  The  results  of  operations  for  interim  periods are not necessarily
indicative  of  the  results  to  be  expected  for  the  full  year.

     Notes  to  the  consolidated  financial statements that would substantially
duplicate  the  disclosure contained in the audited financial statements for the
most recent fiscal year, December 31, 2010, as reported in the Company 's latest
Annual  Report  on  Form  10-K,  have  been  omitted.

2.     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for  Derivative  Values  and  Hedging.  This  guidance resolves issues
addressed  in  Statement  133  Implementation  Issue  No.  D1,  "Application  of
Statement  133  to  Beneficial  Interests in Securitized Financial Assets". This
Statement  permits fair value re-measurement for any hybrid financial instrument
that  contains  an embedded derivative that otherwise would require bifurcation,
clarifies  which  interest-only strips and principal-only strips are not subject
to  the  requirements  of  Statement  133, establishes a requirement to evaluate
interests  in  securitized  financial  assets  to  identify  interests  that are
freestanding  derivatives  or that are hybrid financial instruments that contain
an  embedded  derivative requiring bifurcation, clarifies that concentrations of
credit  risk  in  the form of subordination are not embedded derivatives, amends
Statement  140  to  eliminate  the  prohibition  on a qualifying special-purpose
entity  from  holding  a  derivative  financial  instrument  that  pertains to a
beneficial  interest  other  than  another derivative financial instrument. This
statement  is effective for fiscal years beginning after September 15, 2006. Its
adoption  did not have a material impact on the Company's financial condition or
results  of  operations.

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for Fair Value Measurements and Disclosures which establishes a formal
framework  for measuring fair value under GAAP. It defines and docifies the many
definitions of fair value included among various other authoritative literature,
clarifies  and, in some instances, expands on the guidance for implementing fair
value  measurements,  and  increases  the  level of disclosure required for fair
value  measurements.  Although  SFAS 157 applies to and amends the provisions of
existing  FASB and AICPA pronouncements, it does not, of itself, require any new
fair  value  measurements,  nor  does it establish valuation standards. SFAS 157
applies  to  all  other  accounting  pronouncements requiring or permitting fair
value measurements, except for SFAS No. 123 (F), share-based payment and related
pronouncements,  the  practicability  exceptions  to  fair  value determinations
allowed  by  various other authoritative pronouncements, and AICPA Statements of
Position  97-2  and  98-9  that  deal  with  software  revenue recognition. This
statement  is  effective  for  financial  statements  issued  for  fiscal  years
beginning  after  November  15,  2007,  and  interim periods within those fiscal
years. Management does not believe the adoption of SFAS 157 will have a material
impact  on  the  Company's  financial  condition  or  results  of  operations.

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance for Financial Instruments which is an elective, irrevocable election to
measure  eligible financial instruments and certain other assets and liabilities
at  fair  value  on  an instrument-by-instrument basis. The election may only be
applied  at specified election dates and to instruments in their entirety rather
than  to  portions of instruments. Upon initial election, the entity reports the
difference  between  the  instruments'  carrying value and their fair value as a
cumulative-effect  adjustment  to  the  opening balance of retained earnings. At
each  subsequent reporting date, an entity reports in earnings, unrealized gains
and  losses  on items for which the fair value option has been elected. SFAS 159
is  effective  for  financial statements issued for fiscal years beginning after
November 15, 2007, and is applied on a prospective basis. Early adoption of SFAS
159 is permitted provided the entity also elects to adopt the provisions of SFAS
157 as of the early adoption date selected for SFAS 159. The Company has elected
not  to  adopt  the  provisions  of  SFAS  159  at  this  time.

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for  Income  Taxes  which  clarifies the accounting for uncertainty in
income  taxes  recognized  in  financial statements in accordance with FASB 109,
"Accounting  for  Income  Taxes".  FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a  tax position taken or expected to be taken in a tax return. The provisions of
FIN  48  are  effective for fiscal years beginning after December 15, 2006, with
the  cumulative  effect  of  the  change  in accounting principle recorded as an
adjustment to opening retained earnings. The adoptions of this pronouncement did
not have a material effect on the financial position or results of operations of
the  Company.

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for  Business Combinations to increase the relevance, representational
faithfulness,  and  comparability of the information a reporting entity provides
in its financial reports about a business combination and its effects. SFAS 141R
replaces  SFAS  141,  "  Business  Combinations  "  but, retains the fundamental
requirements  of  SFAS 141 that the acquisition method of accounting be used and
an  acquirer  be identified for all business combinations. SFAS 141R expands the
definition  of  a business and of a business combination and establishes how the
acquirer  is  to:  (1)  recognize  and  measure  in its financial statements the
identifiable  assets  acquired, the liabilities assumed, and any non-controlling
interest  in  the  acquired  company;  (2)  recognize  and  measure the goodwill
acquired  in the business combination or a gain from a bargain purchase; and (3)
determine  what  information  to  disclose  to  enable  users  of  the financial
statements  to  evaluate  the  nature  and  financial  effects  of  the business
combination.  SFAS  141R  is  applicable  to business combinations for which the
acquisition  date  is  on  or  after the beginning of the first annual reporting
period  beginning  on  or  after  December  15,  2008,  and  is  to  be  applied
prospectively.  Early  adoption is prohibited. SFAS 141R will impact the Company
only  if  it  elects to enter into a business combination subsequent to December
31,  2008.

     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for Non-Controlling Interests to improve the relevance, comparability,
and transparency of the financial information a reporting entity provides in its
consolidated  financial  statements.  SFAS  160  amends  ARB  51  to  establish
accounting  and reporting standards for noncontrolling interests in subsidiaries
and to make certain consolidation procedures consistent with the requirements of
SFAS  141R. It defines a noncontrolling interest in a subsidiary as an ownership
interest  in  the  consolidated  entity that should be reported as equity in the
consolidated  financial  statements.  SFAS  160 changes the way the consolidated
income  statement  is  presented by requiring consolidated net income to include
amounts  attributable  to  the  parent and the noncontrolling interest. SFAS 160
establishes  a  single  method of accounting for changes in a parent's ownership
interest in a subsidiary which does not result in deconsolidation. SFAS 160 also
requires  expanded disclosures that clearly identify and distinguish between the
interests  of  the  parent  and  the interests of the noncontrolling owners of a
subsidiary.  SFAS  160  is  effective for financial statements issued for fiscal
years  beginning on or after December 15, 2008, and interim periods within those
fiscal  years.  Early  adoption  is  prohibited.  SFAS  160  shall  be  applied
prospectively,  with  the  exception  of  the  presentation  and  disclosure
requirements  that  shall  be applied retrospectively for all periods presented.
The Company does not believe that the adoption of SFAS 160 would have a material
effect  on  its  consolidated  financial  position, results of operation or cash
flows.

     ACCOUNTING ESTIMATES
     --------------------

     The  preparation  of  consolidated  financial statements in conformity with
accounting  principles  generally  accepted  in  the country-region place United
States  of  America  requires  management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
consolidated  financial  statements  and  the  reported  amounts  of revenue and
expenses  during  the  reporting  period. Actual results could differ from those
estimates.  These  estimates  mainly  involve  the  useful lives of property and
equipment,  the  impairment of unproved oil and gas properties, the valuation of
deferred  tax  assets  and  the  realizability  of  accounts  receivable.

CASH  AND  CASH  EQUIVALENTS
----------------------------
     For  purposes of reporting cash flows, the Company considers all short-term
investments  with an original maturity of three months or less when purchased to
be  cash  equivalents.

     STOCK  BASED  COMPENSATION
     --------------------------
     Effective  January  1,  2009,  AvStar  Aviation  adopted  the authoritative
guidance  for  Stock  Compensation,  which  established financial accounting and
reporting  standards  for  stock based employee compensation plans. It defines a
fair  value  based  method of accounting for an employee stock option or similar
equity  instrument.  In January 2006, the Company implemented SFAS No. 123R, and
accordingly,  the  Company accounts for compensation cost for stock option plans
in  accordance  with  SFAS  No.  123R.

     CONCENTRATION  OF  CREDIT  RISK
     -------------------------------
     Financial instruments which subject the Company to concentrations of credit
risk  include cash and cash equivalents and accounts receivable. The Company has
concentrated  its  credit  risk  for cash by maintaining deposits in a financial
institution, which may at times exceed the amounts covered by insurance provided
by  the  United  States  Federal  Deposit  Insurance  Corporation ("FDIC").  The
Company  has  not  experienced  any  losses  on  deposits.

     INCOME  TAXES
     -------------

The Company uses the liability method in accounting for income taxes. Under this
method,  deferred tax assets and liabilities are determined based on differences
between  financial  reporting  and  income  tax  carrying  amounts of assets and
liabilities  and  are measured using the enacted tax rates and laws that will be
in  effect  when the differences are expected to reverse. A valuation allowance,
if  necessary,  is provided against deferred tax assets, based upon management's
assessment  as  to  their  realization.

     BASIC  AND  DILUTED  NET  LOSS  PER  SHARE
     ------------------------------------------

     Basic  loss  per  share  is  computed  using the weighted average number of
shares  of  common  stock outstanding during each period. Diluted loss per share
includes  the  dilutive  effects  of  common  stock  equivalents  on  an  "as if
converted"  basis.  For  the  years  ended December 31, 2010 and 2009, potential
dilutive  securities  had  an  anti-dilutive effect and were not included in the
calculation  of  diluted  net  loss  per  common  share.

     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
     -----------------------------------------

     The  Company  does  not  expect  the adoption of recently issued accounting
pronouncements  to  have  a  significant  impact  on  the  Company's  results of
operations,  financial  position  or  cash  flow.

3.     GOING  CONCERN  CONSIDERATIONS

     Since  its  inception,  the  Company  has  suffered  recurring  losses from
operations  and has been dependent on existing stockholders and new investors to
provide  cash resources to sustain its operations. During the three months ended
September  30,  2011  and  2010,  the Company reported net losses of $80,502 and
$1,003,859  respectively.  These  conditions  raise  substantial doubt about our
ability  to  continue  as  a  going  concern.

     The  Company  has  developed  a  multi-step  plan  and has taken actions to
improve  its  financial position and deal with its liquidity problems. The final
steps  of the plan are still being developed, but may include additional private
placements  of  our common stock, and efforts to raise additional debt financing
or equity investments. There can be no assurance that any of the plans developed
by  the  Company  will  produce  cash  flows  sufficient to ensure its long-term
viability  as  a  going  concern.

     Our  long-term  viability  as  a  going concern is dependent on certain key
factors,  as  follows:

     *     our  ability  to  obtain  adequate sources of outside financing to
           support near  term  operations and to allow the Company to continue
           forward with current strategic  plans.

     *     our ability to ultimately achieve adequate profitability and cash
           flows to sustain  continuing  operations.

4.     STOCKHOLDERS'  EQUITY

     During  July  2011  the Company issued an aggregate of 29,957,265 shares of
its  common stock in five issues to Asher Enterprises for the partial conversion
of  a  convertible  promissory  note.

     During August 2011 the Company issued 30,791,286 shares of its common stock
in three issues to Asher Enterprises for the partial conversion of a convertible
promissory  note.

     During  September  2011  the Company issued 92,683,508 shares of its common
stock  in  eight  issues  to Asher Enterprises, Redwood Management and Fairhills
Capital  for  the  partial  conversion  of  convertible  promissory  notes.

     During  October  2011  the  Company  issued 75,469,504 shares of its common
stock  in  twenty  issues  to  Fairhills Capital for the partial conversion of a
convertible  promissory  note.

     During  November  2011  the  Company issued 13,333,333 shares of its common
stock  in  one  issue  to  Asher  Enterprises  for  the  partial conversion of a
convertible  promissory  note.

5.     RECENT  EVENTS

     In  February  2011, the Air Carrier Subsidiary relocated both its passenger
and  freight  operations  to  a newly constructed facility at the Sheltair North
complex  at  the  Ft. Lauderdale-Hollywood International Airport. With this move
the  passenger  and freight facilities are separated, giving the passengers more
of an "airline terminal" atmosphere, while maintaining the perks of free parking
and  easy  luggage  handling,  without  the  "big  terminal" inconveniences. The
customer  acceptance  has  been  overwhelmingly  good  and  our  ground  support
operations  are  operating  much  more  efficiently.

     By  moving  to  this  new  facility  we  also  lowered  our  fuel  costs by
approximately  15%.  This  reduction  was due in part to provisions in our lease
agreement  where  the  landlord  would  discount  our fuel purchases. This price
reduction (along with a fuel surcharge instituted in February) has mitigated the
fuel  price  increases  of  the market considerably. With fuel being our largest
single  cost  by  far,  the relocation has contributed greatly to our operations
becoming  profitable.

     While  refurbishment  of  the  aircraft  has  not  progressed as quickly as
scheduled,  we  were  able  to  return  one  aircraft  to service in late March.
Revenues  received  from  the  addition  of  this  aircraft  will  be recognized
beginning  in  the second quarter. With the addition of this aircraft the second
quarter  revenues from airline operations were up in excess of 18%. Currently we
are operating four aircraft and continuing the refurbishment on two others. With
the  continuing decline in used aircraft prices we found it better to pursue the
purchase  of two newer Navajos rather than refurbish the two currently leased. A
restructure of our lease agreement is currently being negotiated to reflect this
change.  Further,  this  change  in  direction  reduces  the amount of unsecured
capital  needed  for  refurbishment. We have identified two prospective aircraft
and  our  goal  is  to  have  them  those aircraft operational when the Commuter
Authority  is  issued.

     On  August  1, 2011 the Twin Air Calypso Limited, Inc. (TACL) submitted its
application  for  Commuter  Authority,  which was posted on the DOT Docket under
file number DOT-OST-2011-0143-0002. This new authority will allow us to increase
our  frequency to each destination and advertise our schedule in the traditional
airline  venues.  We  expect  this authority to become effective late in 2011 or
early  2012.  An  approval  in  late  2011  or early 2012 would allow us to take
advantage  of  the  2012 winter travel season in the Bahamas. A request from the
DOT  for additional information was received by Twin Air Calypso Limited in late
September  and  our response was filed in late October. We expect to receive our
next  communication  from  the  DOT  prior  to  the  end  of  November  2011.

     Additionally,  the  Air  Carrier Subsidiary's personnel have been designing
and  implementing  a  new  scheduling  and  reservation  software  system.  The
scheduling  module  became operational in March 2011. While we have been testing
the reservation portion of the system we added a "Check-In" module and a program
to  track  our  mail  service  customers.  The  system  is presently on-line and
operational.  We  will  now  be developing the freight module of the system. The
full  implementation  of  these  modules will give better internal controls over
yield  management  and freight management and will allow booking of reservations
over  the  internet. The final module will be to fully integrate the operational
systems  into  the accounting system required for the DOT commuter requirements.

     During  the  quarter we introduced the "Twin Bucks" card, a debit type card
that  allows  our  customers to prepay for services and allow us to better track
the  usage  of  our  "Twin Packs". The "Twin Bucks" card will also be used for a
Loyalty  Program  we  will  introduce  early  next  year.

     On  August 10, 2011 Twin Air Calypso Limited, Inc. applied to the Office of
Foreign Asset Control for authority to become a Carrier Service Provider, Travel
Service  Provider  and  Remittance  Agent  for  service  to Cuba. We expect this
authority  to  be  issued by the end of 2011. These authorities will allow us to
provide  services  to persons currently approved to travel to the island country
of  Cuba  and be in a position to provide additional services should the current
government embargo of trade with Cuba be relaxed or lifted. As of this filing we
have  not  received  any  communication  from  OFAC  on  this  application. As a
contingency plan we have made entered into an agreement with one of our partners
to  operate  under  his  their authority when until we have obtained our landing
permits  rights  form  from  the  Cuban  authorities.  Additionally, we have had
preliminary  discussions with an operator of 19 and 30 place aircraft to use for
Cuban  charters  on  a  risk  sharing  basis.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS.

              CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

This  Quarterly  Report  on Form 10-Q includes forward-looking statements within
the  meaning  of  Section  27A  of  the  Securities Act of 1933, as amended, and
Section  21E  of the Securities Exchange Act of 1934, as amended.  We have based
these  forward-looking  statements  on  our current expectations and projections
about  future events.  These forward-looking statements are subject to known and
unknown  risks, uncertainties and assumptions about us that may cause our actual
results,  levels  of  activity,  performance  or  achievements  to be materially
different  from  any  future  results,  levels  of  activity,  performance  or
achievements  expressed  or implied by such forward-looking statements.  In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should,"  "could,"  "would,"  "expect,"  "plan,"  "anticipate,"  "believe,"
"estimate,"  "continue,"  or  the  negative  of  such  terms  or  other  similar
expressions.  Factors  that  might  cause  or  contribute  to such a discrepancy
include,  but  are  not  limited to, those described in our other Securities and
Exchange  Commission  filings.  The  following  discussion  should  be  read  in
conjunction  with  our  Financial  Statements and related Notes thereto included
elsewhere  in  this  report.

GENERAL

     Until February 2009, we had historically been an independent energy company
focused  on  exploration  and development of oil and natural gas reserves, whose
core business was directed to the development of oil and gas prospects in proven
onshore  production  areas. In February 2009, we adopted a significant change in
our  corporate  direction.  At  that  time,  we  decided to focus our efforts on
acquiring  aviation  related businesses and developing these businesses to their
commercial  potential.  Due to acquisitions, we are now in two aviation sectors,
the  maintenance, repair and overhaul ("MRO") of aircraft providing products and
services  for the general aviation sector, and the charter air service business.

     Currently, we are striving to stabilize our two existing businesses in view
of the difficult economy over the past few years. Once these are stabilized, our
business plan will be to acquire, consolidate and grow businesses in the general
aviation  industry. We have adjusted our future goals and will place our primary
focus  on  the  acquisition  of a portfolio of fixed base operations ("FBOs") at
airports  that  support  light jet traffic along with turbine powered and piston
engine  aircraft.  We  believe that the time is here to invest in this sector. A
combination  of  the  economic  trends,  valuation  levels,  and  technological
innovations  has  impacted  this  sector,  making  our  prospects  of  growing a
portfolio  of  FBO  businesses compelling. These facilities will be supported by
our  existing  MRO  business.  We  believe  that  after September 11, 2001, both
private  air transportation and the number of aircraft owned by both individuals
and business dramatically increased, although such increase has been tempered in
recent  years  due  to the recent unfavorable economy. Each of these sectors, in
addition to routine maintenance, has mandated a number of inspections by the FAA
that  are  commonly  included  in  traditional  MRO  services.

     In  February  2009, we acquired San Diego Airmotive ("SDA"), which had been
operating  (through  its  predecessor  entity)  as  an  MRO  since  1987.  SDA
historically  provided  MRO  services  for  single  and  multi-engine  aircraft.

     On  March  31,  2010, the Hangar Sublease dated May 1, 2007 between SDA and
French  Valley Aviation, Inc. ("French Valley") terminated. The original term of
this  Hangar  Sublease  had  already  expired, and the parties had continued the
sublease  on  a month-to-month basis. French Valley decided that it did not want
to  continue  this  arrangement  beyond  March  31,  2010,  and accordingly this
arrangement terminated on such date. We decided not to seek alternative space to
continue  SDA's services at French Valley Airport in Southern California, but we
are  continuing  such  services  in  Florida,  per  the  transaction  described
immediately  below. We intend to maintain in force and effect SDA's licenses and
permits  so  that we can return to provide services in California in the future,
if  we  elect  to  do  so.

     On  April  8,  2010,  (a)  Twin Air Calypso Services, Inc., a newly-formed,
indirect wholly-owned Florida subsidiary (the "MRO Subsidiary") of ours, and (b)
Miami  Aviation  Maintenance Co. ("MAMCO") executed a bill of sale whereby MAMCO
assigned  to  the  MRO Subsidiary certain of its assets used to provide aviation
MRO  services.  These assets were assigned in consideration of 750,000 shares of
our common stock. In connection with the organization of the MRO Subsidiary, SDA
had previously assigned all of its assets to the MRO Subsidiary in consideration
of all of the shares of the common stock of the MRO Subsidiary to be outstanding
for  the  foreseeable  future. The MRO Subsidiary was formed to provide aviation
MRO  services,  as  well  as  airline  support  services. The services are being
offered out of North Perry airport in Pembroke Pines, Florida in Broward County,
Florida.  The  impetus  for  the  transaction was the then recent termination of
SDA's  Hangar  Sublease  at French Valley Airport in Southern California and the
perception  that  the  continuation  in  Florida  of  the  business historically
conducted  by SDA was advisable in view of the perceived greater strength of the
local  Florida  economy relative to the local California market in which SDA has
historically  provided  services.

     The  MRO  Subsidiary  has the following features and provides the following
services:

 *     Annual  Inspections
 *     Computerized  Aircraft  Weight  and  Balance
 *     Engine  Maintenance, Repair & Overhaul including custom installations and
       refurbishment.
 *     Aircraft  Modifications  and  STC  kit  installations
 *     Routine  Maintenance/Insurance  and  Accident  Repairs
 *     Composite  Airframe  Repairs
 *     Pre-purchase  Inspections/Log  Book  Analysis
 *     Oxygen  Service/Nitrogen  Service
 *     Service  Parts
 *     Janitrol/Southwind  Heater  Service/AD  compliance  inspections
 *     Dye/Fluorescent  Penetrant  Inspection  Service
 *     Aircraft  Exterior  &  Interior  Detailing  Services
 *     ACES  Dynamic  propeller  balancing  service
 *     Avionics  installations  and  repairs
 *     Minor  paint  repairs  and  detailing
 *     Instrument  Panel  upgrades  and  Component  installs
 *     Engine  Scanners  and  Monitor  installation
 *     EGT/CHT  calibration

     The  MRO  Subsidiary recently commenced a focused, direct marketing program
of  its  services  and  is  starting to see an increased interest from potential
customers.  Moreover, the MRO Subsidiary currently has the only avionics shop at
North  Perry  Field,  providing  services for the electronic systems on aircraft
that  provide  communications,  navigation and guidance, display systems, flight
management  systems, sensors and indicators, weather radars, electrical systems,
and  various  onboard  computers.

     On  August 19, 2010, we completed a transaction in which we acquired all of
the  outstanding  stock  in  Twin  Air  Calypso  Limited, Inc. (the "Air Carrier
Subsidiary"), a company related to MAMCO. We acquired the Air Carrier Subsidiary
in  exchange  for 18.0 million shares of our common stock and some cash payments
in  the approximate aggregate amount of $275,000. We have been unable to pay the
cash  portion of the purchase price, and we intend to negotiate with the sellers
the  possibility  of satisfying the cash portion of the purchase price with some
of  our  equity  securities.  Because  of  amounts  previously paid, we were not
required  to  pay  any  cash  down  payment  at  closing. In connection with the
completion  of  this  transaction,  Clayton  I. Gamber, a stockholder in and the
chief  executive officer of the Air Carrier Subsidiary, was elected to our Board
of  Directors  and  as  our  Chief  Executive  Officer  and  President.

     The  Air  Carrier  Subsidiary  operates a charter and limited scheduled air
service  from  South  Florida  to the Bahamas with eight leased aircraft. It has
regular  flights  of both passengers and cargo to two destinations on the island
of  Abaco  and  three  destinations  on the island of Eleuthera. The Air Carrier
Subsidiary  also  flies to other destinations in the Bahamas on a charter basis.
Currently  we  are  operating  four aircraft and continuing refurbishment on two
others.  With  the continuing decline in used aircraft prices we found it better
to  pursue  the  purchase  of  two  newer  Navajos rather than refurbish the two
currently  leased.  A  restructure  of  our  lease  agreement is currently being
negotiated to reflect this change. Further, this change in direction reduces the
amount  of  unsecured  capital  needed for refurbishment. We have identified two
prospective  aircraft and our goal is to have them operational when the Commuter
Authority  is  issued.

     As  capital  is available to us, we intend to grow our business through the
expansion  of our existing MRO business as well as by acquisitions of fixed base
operations  ("FBOs"), expansion of our existing maintenance, repair and overhaul
operations  ("MROs"),  and  charter  operations.  Several  companies  have  been
identified  as  acquisition  targets  as  capital  is  available  to  us.

RECENT  EVENTS

     In  February  2011, the Air Carrier Subsidiary relocated both its passenger
and  freight  operations  to  a newly constructed facility at the Sheltair North
complex  at  the  Ft. Lauderdale-Hollywood International Airport. With this move
the  passenger  and freight facilities are separated, giving the passengers more
of an "airline terminal" atmosphere, while maintaining the perks of free parking
and  easy  luggage  handling,  without  the  "big  terminal" inconveniences. The
customer  acceptance  has  been  overwhelmingly  good  and  our  ground  support
operations  are  operating  much  more  efficiently.

     By  moving  to  this  new  facility  we  also  lowered  our  fuel  costs by
approximately  15%.  This  reduction  was due in part to provisions in our lease
agreement  where  the  landlord  would  discount  our fuel purchases. This price
reduction (along with a fuel surcharge instituted in February) has mitigated the
fuel  price  increases  of  the market considerably. With fuel being our largest
single  cost  by  far,  the relocation has contributed greatly to our operations
becoming  profitable.

     While  refurbishment  of  the  aircraft  has  not  progressed as quickly as
scheduled,  we  were  able  to  return  one  aircraft  to service in late March.
Revenues from the addition of this aircraft began being recognized in the second
quarter  2011.  With  the  addition  of  this  aircraft, the second quarter 2011
revenues  from  airline  operations  were  up  in  excess  of  18%

     On  August  1, 2011 the Twin Air Calypso Limited, Inc. (TACL) submitted its
application  for  Commuter  Authority,  which was posted on the DOT Docket under
file number DOT-OST-2011-0143-0002. This new authority will allow us to increase
our  frequency to each destination and advertise our schedule in the traditional
airline  venues.  We  expect  this authority to become effective late in 2011 or
early  2012.  An  approval  in  late  2011  or early 2012 would allow us to take
advantage  of  the  2012  winter  travel  season in the Bahamas. TACL received a
request  from  the  DOT  for  additional  information in late September, and our
response  was filed in late October. We expect to receive our next communication
from  the  DOT  prior  to  the  end  of  November  2011.

     Additionally,  the  Air  Carrier Subsidiary's personnel have been designing
and  implementing  a  new  scheduling  and  reservation software. The scheduling
module  became  operational  in  March  2011.  While  we  have  been testing the
reservation  portion of the system we added a "Check-In" module and a program to
track  our  mail  service  customers.  The  system  is  presently  on-line  and
operational.  We  will  now  be developing the freight module of the system. The
full  implementation  of  these  modules will give better internal controls over
yield  management  and freight management and will allow booking of reservations
over  the  internet. The final module will be to fully integrate the operational
systems  into  the accounting system required for the DOT commuter requirements.

     During  the  quarter we introduced the "Twin Bucks" card, a debit type card
that allow our customers to prepay for services and allow us to better track the
usage of our "Twin Packs". The "Twin Bucks" card will also be used for a Loyalty
Program  we  will  introduce  early  next  year.

     On  August 10, 2011 Twin Air Calypso Limited, Inc. applied to the Office of
Foreign Asset Control for authority to become a Carrier Service Provider, Travel
Service  Provider  and  Remittance  Agent  for  service  to Cuba. We expect this
authority  to  be  issued by the end of 2011. These authorities will allow us to
provide  services  to persons currently approved to travel to the island country
of  Cuba  and be in a position to provide additional services should the current
government embargo of trade with Cuba be relaxed or lifted. As of this filing we
have  not  received  any  communication  from  OFAC  on  this  application. As a
contingency  plan  we have made an agreement with one of our partners to operate
under  his  their  authority  when until we have obtained landing permits rights
form  the  Cuban  authorities. Additionally, we have had preliminary discussions
with an operator of 19 and 30 place aircraft to use for Cuban charters on a risk
sharing  basis.

     With  the  increased  fuel  costs  of late 2010 and early 2011, the general
aviation  segment  continues  to  suffer.  We  are  continuing  to  search  for
opportunities to acquire aviation maintenance and service organizations. At this
time we feel that more favorable opportunities will be available during the fall
and  early winter of 2011. We are currently negotiating sources of capital to be
in  a  position  to  pursue  these  opportunities  as  they  are  identified.

     We  are aggressively pursuing the divesture of the oil and gas assets along
with  their  associated tax loss carry-forward. We have developed a strategy for
the  divesture  of  the  assets  based  upon  precedent  and using professionals
experienced  in  such  transactions. With this divesture we expect to lessen the
burden  of  legacy  and  current  debt.  We  are  in active discussions with two
different  parties  to provide the services needed to facilitate this divesture.
It  is  our  desire  to  complete  this  activity  as  soon  as  feasible.

     Since  our  inception,  we  have  recurring losses from operations and have
depended  on  existing  stockholders  and  new  investors  to  provide  the cash
resources  to sustain its operations. During the nine months ended September 30,
2011,  we  reported  a  net  loss  of  $80,502  compared to a loss of $1,003,859
reported for the nine months ended September 30, 2010. The consolidated loss was
generated  from expenses of the non-performing oil and gas leases, interest from
legacy  debt,  and  the  third quarter traditionally being the slowest period of
activity  in  the  airline  operation.

     Our  long-term viability as a going concern depends on certain key factors,
as  follows:

      *     Our  ability  to continue to obtain sources of outside financing to
            allow us  to  continue  our  business  operations.
      *     Our  ability to increase profitability and sustain a cash flow level
            that will  ensure  support  for  continuing  operations.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES

     Our  discussion  and  analysis  of  the  financial condition and results of
operations  are based upon our financial statements, which have been prepared in
accordance  with  generally accepted accounting principles in the United States.
The  preparation of these financial statements requires us to make estimates and
judgments  that  affect the reported amounts of assets, liabilities, revenue and
expenses,  and  related  disclosure  of contingent assets and liabilities. On an
ongoing  basis,  we  evaluate  estimates.  We  base  our estimates on historical
experience  and  on various other assumptions that are believed to be reasonable
under  the  circumstances.  These  estimates and assumptions provide a basis for
making  judgments  about  the carrying values of assets and liabilities that are
not  readily  apparent  from other sources. Actual results may differ from these
estimates  under  different assumptions or conditions, and these differences may
be  material.  Critical  accounting  policies  that  affect our more significant
judgments  and  estimates  used in the preparation of our consolidated financial
statements are discussed in the footnotes to the financial statements comprising
a  part  of  this  report.

RESULTS  OF  OPERATIONS

        Quarter Ended September 30, 2011 Compared to the Quarter Ended
                            September 30,2010

     REVENUES.  Revenues for the third quarter 2011 were $521,153 (consisting of
$520,156  in revenues from aviation operations and $997 in revenues from oil and
gas  operations)  compared  with  revenue of $516,893 for the third quarter 2010
(all  from  aviation  operations).

     EXPENSES.  Costs  and  expenses  for  the  third quarter 2011 were $591,194
compared  with  costs  and expenses of $773,550 for the third quarter 2010. This
increase  in  costs  and  expenses  reflects  the  following:

     *     $449,775  in  costs  of goods sold in the third quarter 2011 from
           aviation operations  compared  with  $448,692 in costs of goods sold
            in the third quarter 2010
     *     $260 in depreciation, depletion and amortization in the third quarter
           2011  compared  with  $2,226  in depreciation, depletion and
           amortization in the third  quarter  2010.
     *     $141,159  in  selling, general and administrative expenses including
           stock based  compensation  in  the  third  quarter  2011 compared to
           $322,632 in these expenses  in  the  third  quarter  2010.

     NET LOSS, As a result of stable revenues and a decline in expenses, the net
loss  of  $81,441  for the third quarter 2011 represents a decrease of  $175,216
from  the  net  loss  of  $256,657  for  the  third  quarter  2010.

   Nine Months Ended September 30, 2011 Compared to the Nine Months Ended
                             September 30, 2010

     REVENUES.  Revenues  for  the  first  nine  months  2011  were  $1,752,251,
consisting of $1,741,759 in revenues from aviation operations and $10,492 in oil
and  gas  revenues.  These  revenues represent an increase from revenues for the
first  nine months 2010 of $1,122,987, consisting of $1,121,756 in revenues from
aviation operations and $1,231 in oil and gas revenues. The increase in revenues
in  the  first  nine  months of 2011 resulted from A significant increase in the
volume  of sales from aviation operations.  The increase in oil and gas revenues
in  the  first  nine  months of 2011 from the first nine months of 2010 resulted
from an increase in the price of oil as well as a payment from an operator which
had  been  held  in  escrow  awaiting  proper  instructions  for  payment.

     EXPENSES.  Costs  and  expenses  increased  to $1,798,833 in the first nine
months  2011  from  $2,126,846  in  the first nine months 2010. This increase in
costs  and  expenses  reflects  the  following:

     *     $1,380,461  in  costs  of  goods  sold  in the first nine months 2011
           from aviation  operations  compared with $873,308 in costs of goods
           sold in the first nine  months  2010  from  aviation operations as
           the volume of services provided increased.
     *     $780  in depreciation, depletion and amortization in the first nine
           months 2011  compared  with  $8,226  in depreciation, depletion and
           amortization in the first  nine  months  2010.
     *     $417,592  in  selling, general and administrative expenses including
           stock based  compensation  in  the  first nine months 2011 compared
           with $1,245,312 in these expenses in  the  first  nine  months  2010.

     NET  LOSS.  As  a  result  of  the considerable increase in revenues and an
appreciable  decline  in  expenses,  the  net loss of $80,502 for the first nine
months  2011  represents  a decrease of $923,357 from the net loss of $1,003,859
for  first  nine  months  2010.

KNOWN  TRENDS

      From  our  fifty  plus  years  of  experience  in the Bahamian and general
aviation  markets we have observed many trends and customs. The general downturn
of the world economy in 2008 caused many real estate development ventures in the
Bahamas  to close operations. At the present time many of these developments are
planning  to  resume  operations  in  the  near future. We will be offering both
passenger  and  freight  services  to  these  companies.

     The  Bahamas  government  is  making  the  ownership of real estate and the
building  of  homes easier and more secure for non-Bahamians than at any time in
their  history.  This  is  of  great importance to AvStar because it expands the
non-seasonal  portion  of  our  market.

     The  number  and  nature  of competitors in our markets have changed in the
past  year.  The  difficult economic times of the past two years have eliminated
several  of  our  competitors and caused the larger air carriers to reduce their
operations  into  the  small  population  centers  we serve. This gives AvStar a
window  of  time  to  reinforce  our  position  in  the  market.

     The price of fuel, our largest operational cost component, will continue to
be  volatile  and  require  continual  monitoring  by  management.

     The  approval  of the Commuter Authority and the Cuba Authority expected in
late  2011  or  early 2012 will have a significant impact on future revenues and
profits.

     The general aviation market will continue to be affected by fuel prices and
other  increased  operating  costs.  We have positioned ourselves to offer fuel,
labor  and  parts  to  the  general  aviation owner at reduced prices due to our
overhead  being  shared  between  two  entities.

LIQUIDITY  AND  CAPITAL  RESOURCES

     For  some  time,  we have been financing our operations through convertible
promissory notes.  Because we have nearly exhausted our supply of authorized but
unissued  shares,  we almost certainly will not be able to continue to resort to
this  financing  option.  In recent months, we have taken on unsecured debt from
several  of  our  shareholders.  Our ability to rely on the continued support of
our  shareholders  is  uncertain.  If  we  do  not  soon  achieve  sustained
profitability  and  eventually run out of funds, we will need to seek additional
funds  immediately.  If  we  need  to  obtain  additional  financing, we will be
constrained  to  identify  various sources and financing alternatives, including
private  sales of equity securities or the incurrence of indebtedness.  However,
additional  financing  may  not  be  available on favorable terms or at all.  In
addition,  if  required financing is not available on acceptable terms, we could
be forced to cease business altogether, which could result in a complete loss of
the  value  of  our  outstanding  shares.  Our future liquidity will depend upon
numerous  factors, including the success of our business efforts and our capital
raising  activities.  Any debt financing undertaken to procure funds may involve
restrictions  limiting  our operating flexibility.  Moreover, if we obtain funds
through  the  issuance  of  equity securities, the following results will or may
occur:

     *     The  percentage  ownership  of  our  existing  members  will  be
           reduced
     *     The  new  equity  securities  may  have  rights, preferences or
           privileges senior  to  those  of  the  holders  of  our  Interests.

     As  of  September  30,  2011,  we  had  a  working  capital  deficiency  of
approximately  $688,453.  Currently, we have limited financial ability to pursue
our  new  business  plan. The amount of capital that we will need depends on the
scope of the business activities that we ultimately decide to pursue. This scope
is  uncertain  at  this  time.  However,  we know that we must obtain additional
financing to pursue our business plan at any level that we are likely to pursue.
We  are  currently  searching  for sources of financing, but we currently do not
have any binding commitments for, or readily available sources of, financing. We
cannot  assure  anyone that financing will be available to us when needed or, if
available, that such financing can be obtained on commercially reasonably terms.
If  we  do  not obtain financing we will be constrained to contract the scope of
our business plan. Under certain circumstances, we may be constrained to attempt
to  sell  some  of  our assets. However, we cannot assure anyone that we will be
able  to  find  interested  buyers or that the funds received from any such sale
would  be adequate to fund our activities. Under certain circumstances, we could
be  forced  to  cease our operations and liquidate our remaining assets, if any.

     Our independent certified public accountant has added an emphasis paragraph
to  its  report  on  our  consolidated  financial  statements for the year ended
December  31,  2010 regarding our ability to continue as a going concern. Key to
this  determination  is our historical losses of $1,016,664 in 2010 and $988,990
in  2009.  Management  plans  to  try  to fund our company partially through the
raising  of  capital  through  the sale of our equity instruments or issuance of
debt,  although  there  can be no assurance of success in this regard. Moreover,
management  plans  on additional revenues from operations from our business as a
source  to  finance  our  company, although there can be no assurance that these
revenues  will materialize at the expected rates. There can be no assurance that
we  will  be  successful  in  achieving these objectives, becoming profitable or
continuing  our  business without either a temporary interruption or a permanent
cessation.

                            Recent Convertible Debt
                            -----------------------

      Asher  Notes.  We  have  issued and outstanding one convertible promissory
note (the "Asher Note") to Asher Enterprises, Inc. ("Asher") in consideration of
an  amounts  loaned  by  Asher to us.  Five notes similar to the Asher Note have
been  fully converted.  The Asher Note has an outstanding balance of $7,584.  It
was  issued  on  March 28, 2011 and will mature on December 30, 2011.  The Asher
Note  bears  regular  interest at a rate of 8% per annum, with a default rate of
22%  per  annum.  The  Asher  Note is unsecured, and it is due and payable on or
before their respective maturity dates. At any time prior to the payment in full
of  the entire balance of the Asher Note, Asher has the option of converting all
or any portion of the unpaid balance of the Asher Note into shares of our common
stock  at  a  conversion  price  discussed hereafter. Nevertheless, Asher is not
entitled  to convert any portion of the Asher Note to the extent that the shares
to be issued in connection therewith would cause Asher's beneficial ownership of
our  common stock to exceed 4.99% of the outstanding shares of our common stock.
The  conversion price for the Asher Note features a "variable" conversion price.
The  variable  conversion  price is a percentage discount from an average of the
three  lowest  closing  bid  prices  of  our common stock for the 10 most recent
trading  days  preceding  the  date of exercise. The percentage discount for the
variable conversion prices provided for in the Asher Note is 50%. Because of the
operation  of the floating conversion price and the limitation on the ability of
Asher to convert as described above, we are unable to determine at any time that
number  of shares into which Asher could convert the Asher Note.  The Asher Note
(and  related  documentation)  contain customary representations and warranties,
customary  affirmative  and  negative  covenants,  customary  anti-dilution
provisions, and customary events of default that entitle Asher to accelerate the
due  date of the unpaid principal amount of, and all accrued and unpaid interest
on,  the  Asher  Note.  A default on Asher Note could lead to certain penalties,
including  an obligation to (a) pay all of the following, plus an additional 50%
of  (i)  default  interest,  (ii)  other  monetary  penalties,  and  (iii)  the
outstanding  balance  on  the  Asher Note, and (b) to issue shares of our common
stock  to  satisfy  the  amount  computed  in  accordance  with  (a) immediately
preceding.

     Redwood  Indebtedness.  In  early  August  2011,  Redwood  Management,  LLC
("Redwood")  received an assignment of outstanding convertible indebtedness then
owed  by  us  to Henry L. Schulle. We and Redwood entered into a new arrangement
(sometimes  referred  to  in legal circles as a novation) to modify the terms of
the  assigned  convertible  indebtedness.  The following is a description of the
terms  of  the  new Redwood arrangement, which is referred to hereinafter as the
"Redwood  Indebtedness".

     The outstanding principal amount of the Redwood Indebtedness is $20,000. It
bears interest at a rate of 12% per annum. The Redwood Indebtedness is unsecured
and  is  due and payable on or before February 5, 2012. At any time prior to the
payment  in  full of the entire balance of the Redwood Indebtedness, Redwood has
the option of converting all or any portion of the unpaid balance of the Redwood
Indebtedness  into shares of our common stock at a conversion price equal to 50%
of  the  lowest trading price, determined on the then current trading market for
our common stock, for the 25 trading days prior to conversion. The documentation
memorializing  the  Redwood  Indebtedness contains customary representations and
warranties,  registration  rights,  customary  anti-dilution  provisions,  and
customary  events  of default that entitle Redwood to accelerate the due date of
the  unpaid  principal  amount  of,  and all accrued and unpaid interest on, the
Redwood  Indebtedness.

     Fairhill  Capital.  In  early September 2011, Fairhills Capital received an
assignment  of  outstanding convertible indebtedness then owed by us to Henry L.
Schulle  in  the  amount  of  $150,000.  Fairhills Capital has already converted
slightly more that $150,000 leaving an outstanding balance of slightly more than
$64,000  in  indebtedness  still  owed  to Fairhills Capital. We do not now have
sufficient authorized but unissued shares to permit Fairhills Capital to convert
further  the  outstanding indebtedness in any meaningful way. The following is a
description of the terms of the remaining indebtedness owed to Fairhills Capital
(the  "Fairhills  Note").

     The  Fairhills  Note bears regular interest at a rate of 8 % per annum. The
Fairhills  Note  is unsecured, and it is due and payable one year after the date
of  its issuance. At any time prior to the payment in full of the entire balance
of  the  Fairhills  Note,  the  holder  has  the option of converting all or any
portion  of  the  unpaid balance of the Fairhills Note into shares of our common
stock  at  a  conversion price discussed hereafter. The conversion price for the
Fairhills  Note  features  a  "variable"  conversion  price  and  also a "fixed"
conversion  price  of  $.04,  which  will  apply  if it is less than the related
variable  conversion price. The variable conversion price is the closing trading
prices  of  our common stock for the most recent trading days preceding the date
of  exercise;  provided,  however,  that the variable conversion price must be a
minimum  of  at  least  $.005  per  share. The Fairhills Note contains customary
representations  and  warranties,  registration  rights, customary anti-dilution
provisions,  and  customary  events  of  default  that  entitle  the  holder  to
accelerate  the  due date of the unpaid principal amount of, and all accrued and
unpaid interest on, the Fairhills Note. We do not now have sufficient authorized
but  unissued  shares to permit the further conversion of the Fairhills Notes in
any  meaningful  way

 Schulle  Notes.
 --------------

     In  May  2011,  we issued two convertible promissory notes in the aggregate
original  principal amount of $77,588.45 to Henry L. Schulle, a consultant to us
("Schulle"),  for  funds  loaned  to  us.  Other  convertible  promissory  notes
previously  issued  to  Mr.  Schulle  have been assigned to Fairhills Capital as
discussed  above.  (The two preceding notes are referred to hereinafter singly a
"Schulle  Note"  and  collectively  the  "Schulle Notes") While the terms of the
Schulle  Notes  vary  somewhat,  these terms are generally the same from note to
note.  The  following  is  a  description  of  the  terms  of the Schulle Notes.

      Each  of  the Schulle Notes bears regular interest at a rate of 8 and 1/2%
per  annum. The Schulle Notes are unsecured, and each of them is due and payable
one  year after the date of their respective issuances. At any time prior to the
payment in full of the entire balance of a Schulle Note, Schulle has the option,
upon a 65-days notice, of converting all or any portion of the unpaid balance of
the Schulle Note into shares of our common stock at a conversion price discussed
hereafter.  Each  conversion  price  for the Schulle Notes features a "variable"
conversion  price  and also a "fixed" conversion price of $.04, which will apply
if  it  is  less  than  the  related  variable  conversion  price.  The variable
conversion  price is the closing trading prices of our common stock for the most
recent  trading days preceding the date of exercise; provided, however, that the
variable conversion price has a minimum floor of $.005 per share. In view of our
most  recent  closing  trading prices and the minimum variable conversion price,
Schulle  could  convert  the two Schulle Notes into an aggregate of 26.0 million
shares.  The  Schulle  Notes  contain  customary representations and warranties,
registration rights, customary anti-dilution provisions, and customary events of
default  that entitle Schulle to accelerate the due date of the unpaid principal
amount of, and all accrued and unpaid interest on, the Schulle Notes.  We do not
now  have  sufficient  authorized  but  unissued  shares  to  permit the further
conversion  of  the  Schulle  Notes  in  any  meaningful  way.

                             Recent Unsecured Debt
                             ---------------------

     Commencing  near  the  beginning  of August 2011 and continuing through the
present, we have borrowed certain amounts from several of our shareholders.  The
following  table  gives  information  regarding  these  borrowings:

   Date(s) of                                                 Aggregate
   Borrowings             Lending Shareholder                Amount of Debt
   ----------             -------------------                --------------
Aug.  8,  2011  &
 Oct. 3, 2011      H.L. Schulle                                 $60,500

Sept. 13, 2011     Sabinal Trust, Robert Gaidousek, Trustee     $19,000

Nov. 9, 2011       THC Trust, Robert Gaidousek, Trustee         $87,187

     The  indebtedness  indicated  in the table has not yet been memorialized in
written  documentation.  Accordingly, it must be view as demand indebtedness, of
which  the  lender  can require the repayment thereof at any time.  We intend in
the  future  to  negotiate  with the lending shareholders the exact terms of the
indebtedness  and memorialize those terms in written documentation.  Mr. Schulle
also acts as a consultant to us, and we also owe the Sabinal Trust approximately
$23,600  in  unreimbursed  expenses  incurred  by  it  on  our  behalf.

                                  Legacy Debt
                                  -----------

     We  have  outstanding  the  following  notes that became due and payable on
December  31,  2008.  These  notes  have  an aggregate principal amount totaling
$624,771  ,  plus  accrued interest of as of November 18, 2011. We are currently
exploring  ways  to  satisfy  these  amounts.

     (a)     Note  payable  to  Mary  Pollock  Merritt,  daughter of our former
chief executive  officer. This note bears interest at rates of 12% per year and
became due  on  December  31,  2008.  This  note  is  not  collateralized.  The
current outstanding  balance  on this note as of November 18, 2011 was $111,691,
plus accrued  interest.

     (b)     Note  payable  to  Charles  Pollock, our former chief executive
officer. This  note  bears  interest of 12% per year and became due on December
31, 2008. This note is not collateralized. The current outstanding balance on
this note as of  November  18,  2011  was  $400,911,  plus  accrued  interest.

     (c)     Note  payable to Mark Weller, our former president. This note bears
interest  of  12% per year and became due on December 31, 2008. This note is not
collateralized. The outstanding balance on this note as of November 18, 2011 was
$112,169,  plus  accrued  interest.

OFF-BALANCE SHEET ARRANGEMENTS

     We have no off balance sheet arrangements.

OIL AND GAS ASSETS

      We are aggressively pursuing the divesture of the oil and gas assets along
with  their  associated tax loss carry-forward. We have developed a strategy for
the  divesture  of  the  assets  based  upon  precedent  and using professionals
experienced  in  such  transactions. With this divesture we expect to lessen the
burden  of  legacy  and  current  debt.  We  are  in active discussions with two
different  parties  to provide the services needed to facilitate this divesture.
It  is  our  desire  to  complete  this  activity  as  soon  as  feasible.

ITEM 4T. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     As  of  the  end  of the period of this report, our principal executive and
principal  financial  officer  carried out an evaluation of the effectiveness of
the  design  and  operation  of  our  disclosure  controls  and procedures. This
evaluation  was  carried out under the supervision and with the participation of
our  management,  including  our  Chief  Executive  Officer  and Chief Financial
Officer. We have concluded, based on that evaluation, that, as of such date, the
disclosure controls and procedures were not effective to ensure that information
required  to  be  disclosed  in  reports filed or submitted under the Securities
Exchange Act of 1934 (the "Exchange Act") is accumulated and communicated to our
management,  including  our Chief Executive Officer and Chief Financial Officer,
as  appropriate  to  allow  timely  decisions  regarding  required  disclosure.
Management identified significant deficiencies with respect to the timely public
reporting  of  events  requiring such reporting. During 2010, these deficiencies
caused  us  to  file late five Current Reports on Form 8-K, and during 2011 thus
far  they  have  caused us to file late six Current Reports on Form 8-K. Some of
the  late  filings  resulted  from  the failure of relevant company personnel to
understand  the  need  for  prompt  disclosure.  We  are trying to institute the
following  corrective  action  to  ensure  that  such events are timely reported
publicly:

     *     The  adoption  of  a  disclosure  policy  requiring  our  personnel
           to communicate to a designated committee for evaluation any
           information potentially material  and  thereby  requiring  public
           disclosure;
     *     The development of a basic program to educate management as to the
           events requiring  expedited  disclosure;
     *     To  avoid  late  disclosure of events requiring expedited disclosure,
           the adoption  of  certain  procedures, such as required consultation
           with securities counsel  before  issuing any equity shares, entering
           into any agreement that may be material, taking any action at a Board
           of Directors meeting or the like; and
     *     To  avoid  late  filings  of  documents having regular due dates
           (such as Annual  Reports  on  Form  10-K  and  Quarterly  Reports  on
           Form  10-Q),  the establishment  of  timelines within which our
           professional personnel will strive to  work.

     Budget  limitations  have  impaired our ability to institute the corrective
action described above. Because the implementation of such corrective action was
not  completed  as  of  the  end  of  the period of this report, the significant
deficiencies  that  we  identified  still existed as of the end of the period of
this  report.

LIMITATIONS ON EFFECTIVENESS OF CONTROLS AND PROCEDURES

     Our  management,  including our Chief Executive Officer and Chief Financial
Officer,  does  not  expect  that  our disclosure controls and procedures or our
internal  controls  will  prevent  all error and all fraud. A control system, no
matter  how  well  conceived  and  operated,  can  provide  only reasonable, not
absolute,  assurance that the objectives of the control system are met. Further,
the  design  of  a  control system must reflect the fact that there are resource
constraints  and  the  benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of  fraud,  if  any,  within  our  company  have  been  detected. These inherent
limitations  include,  but  are  not limited to, the realities that judgments in
decision-making  can  be  faulty and that breakdowns can occur because of simple
error  or  mistake. Additionally, controls can be circumvented by the individual
acts  of  some  persons,  by  collusion  of two or more people, or by management
override  of  the control. The design of any system of controls also is based in
part  upon  certain  assumptions about the likelihood of future events and there
can  be  no assurance that any design will succeed in achieving its stated goals
under  all potential future conditions; over time, control may become inadequate
because  of changes in conditions, or the degree of compliance with the policies
or  procedures  may  deteriorate.

CHANGES  IN  INTERNAL  CONTROLS  OVER  FINANCIAL  REPORTING

     There  have  not  been  any  changes in our internal control over financial
reporting,  as  such  term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act, during the period of this report that have materially affected, or
are  reasonably  likely to materially affect our internal control over financial
reporting.

                           PART II  OTHER INFORMATION

ITEM 6.  EXHIBITS.

     (a)     The  following exhibits are filed with this Quarterly Report or are
incorporated  herein  by  reference:

Exhibit
Number   Description

31.01     Certification pursuant to Rule 13a-14(a) of the Securities Exchange
          Act of 1934.
31.02     Certification pursuant to Rule 13a-14(a) of the Securities Exchange
          Act of 1934.
32.01     Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.
32.02     Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*  XBRL Instance
101.SCH*  XBRL Taxonomy Extension Schema
101.CAL*  XBRL Taxonomy Extension Calculation
101.DEF*  XBRL Taxonomy Extension Definition
101.LAB*  XBRL Taxonomy Extension Labels
101.PRE*  XBRL Taxonomy Extension Presentation

*     To be filed by amendment.

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly  authorized.

                                      AVSTAR AVIATION GROUP, INC.
                                      (Registrant)


                                      By:     /s/ Clayton I. Gamber
                                              Clayton I. Gamber,
                                              ------------------
                                              Chief Executive Officer
                                              (Principal Executive Officer)


                                      By:     /s/ Robert Wilson
                                              Robert Wilson,
                                              --------------
                                              Vice President and Chief Financial
                                              Officer
                                              (Principal Financial Officer and
                                              Principal Accounting Officer)
November 21, 2011

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