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 JUNE 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 [ ]  No [X]

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 [ ]

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)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes [ ] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable  date: 315,460,075 common shares as of
August  2,  2011



<PAGE>
                         PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.


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


                                                 June 30,       December 31,
                                                   2011              2010
                ASSETS

Current assets
     Cash                                          37,390           5,648
     Accounts receivable                          160,202         146,826
     Prepaid expenses                              11,757           4,858
     Inventory                                          -          11,008
                                                  -----------------------
     Total Current Assets                         209,349         168,340

Property and equipment:                            74,032           9,819

Investment in subsidiary                          904,909         781,840
                                                 ------------------------
     Total Property and Equipment                 978,941         791,659
                                                 ------------------------
     Total Assets                               1,188,290         959,999
                                                =========================

                            BALANCE SHEET
                      Period End: June 30, 2011


                                                  June 30,     December 31,
                                                    2011           2010

     LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
     Accounts payable                             174,702           83,189
     Other current liabilities                    226,381                -
     Accrued interest payable to related parties  121,417           99,197
     Notes payable to related parties             455,247          477,336
     Accrued liablities                            94,705          383,574
                                                 -------------------------
     Total current liabilities                  1,072,451        1,043,296

Long term debt to related parties               1,045,046        1,057,477
                                                 -------------------------
     Total liabilities                          2,117,497        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;
       279,788,524 and 104,799,542 shares
       issued and outstanding at June 30,
       2011 and  December 31, 2010,
       respectively                              279,788           176,900
     Additional paid-in capital               21,527,072        21,441,852
     Accumulated deficit                     (22,736,067)      (22,759,526)
                                             -----------------------------
     Total stockholders' deficit                (929,207)       (1,140,774)
                                             -----------------------------
 Total liabilities and stockholders' deficit   1,188,290           959,999
                                             =============================

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

                                     Three Months Ended     Six Months Ended
                                           June 30             June 30
                                       2011    2010          2011        2010

Oil and gas revenue                  $8,202        $141      9,495       $1,231
Income from aviation operations     637,161      55,703  1,221,603      156,131
                                    -------------------------------------------
Total revenue                       645,363      55,844  1,231,098      157,362

Costs and expenses:
Cost of goods sold                  513,466      67,764    930,686      128,384
Lease operating expenses
Production taxes
Dry hole costs                                    -
Depreciation and depletion              260       3,000        520        6,540
Forbearance                                                             137,249
Selling, general and administrative,
expenses                            140,471     206,611    276,433      708,161
                                    -------------------------------------------

Total costs and expenses            654,197     277,375  1,207,639      980,334
                                    -------------------------------------------
Income (Loss) from operations        (8,834)   (221,531)   23,459      (822,972)

Other (expenses):
Interest expense                     11,410                22,520
                                   --------------------------------------------
Net income (loss)                  $(20,244)  $(221,531)     $939    $(822,972)
                                   ===========================================

Basic and diluted net loss per
common share                         $(0.00)              $(0.00)

Weighted average common shares  390,499,544 337,638,006 390,499,544 327,100,643
<PAGE>
                             AVSTAR AVIATION GROUP, INC.
                  UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                       for the six months ended June 30, 2011 and 2010
                                         (Unaudited)

                                                  Six Months Ended
                                                       June 30
                                                 2011             2010

Cash flows from operating activities:
Net income (loss)                     $          939          $(822,972)
Adjustments to reconcile net loss to
net cash used in operating activities        (64,109)           230,255
                                     -----------------------------------
Net cash used in operating activities        (63,170)          (592,717)

Cash flows from investing activities:
Capital and exploratory expenditures         (64,396)             (1,159)
                                    ------------------------------------
Net cash used in investing activities        (64,396)             (1,159)

Cash flows from financing activities:
Decrease in notes payable                     (6,280)           (146,691)
Paid in capital                              134,102
Common stock                                  31,486
Repayment of debt                                                733,953
Borrowings                                                        39,071
                                     -----------------------------------
Net cash used in financing activities        159,308             626,333
                                     -----------------------------------
Net increase (decrease) in cash and
cash equivalents                              31,742              32,457

Cash and cash equivalents at beginning
   of period                                   5,648              18,087
                                    ------------------------------------
Cash and cash equivalents at end of
   period                                   $ 37,390            $ 50,544
                                   ====================================

Supplemental Disclosures:
Cash paid for interest                            $-                  $-
Cash paid for income taxes                         -                   -
Noncash investing and financing
   activities:
      Oil and gas property acquired
      with common stock issuance                                $32,000
<PAGE>
                           AVSTAR AVIATION GROUP, INC.
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                      For the Six Months ended June 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           102,888,982 102,888    62,700                 165,588

Imputed interest                                 22,520                  22,520

Net income                                                    23,459     23,459
                 --------------------------------------------------------------
Balance at June
   30, 2011             279,788,524  279,788 21,527,072  (22,736,067)  (929,207)
              ==================================================================
<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
June  30, 2011 and 2010, the Company reported net losses of $19,944 and $601,441
respectively.  For the six months ending June 30, 2011 the operating entities of
Twin Air Calypso Limited and Twin Air Calypso Services generated a net profit of
approximately  $29, 000.00. The consolidated loss was generated from expenses of
the  non  performing  oil  and  gas  leases and interest from legacy debt. 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 May 2011 the Company issued an aggregate of 20,000,000 shares of its
common  stock in two issues to Asher Enterprises for the partial conversion of a
convertible  promissory  note.

     During  May 2011 the Company issued 7,517,690 shares of its common stock to
a  person  holding  a convertible promissory note in exchange for a reduction of
$37,588.45  of  the  indebtedness  represented  by  this  note.

     During  June  2011 the Company issued 26,000,000 shares of its common stock
in  three  issues to Asher Enterprises for a partial conversion of a convertible
promissory  note.

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

     During August 2011 the Company issued 15,714,286 shares of its common stock
in  two  issues  to  Asher Enterprises for a partial conversion of a convertible
promissory  note.

<PAGE>
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 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 to be paid in a small number of
future  installments  over the fairly near future. 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.

     In  connection  with  the  acquisition of the Air Carrier Subsidiary and in
order to effectuate a verbal agreement and understanding that they had made some
time  ago,  we  and the prior stockholders of the Air Carrier Subsidiary entered
into  certain option agreements (the "Option Agreements"). The Option Agreements
permit  us  to  repurchase  a portion of the 18.0 million shares of common stock
issued  in  connection  with  the acquisition for an aggregate purchase price of
$1.75  million.  The number of shares depends on the per-share "Market Value" of
our  common  stock,  which  is basically the 20-day trading average prior to the
time  of  exercise.  The  portion  of  such  18.0  million  shares  that  may be
repurchased  generally equals the quotient obtained by dividing $1.25 million by
the  Market  Value;  provided, however, that the stockholders of the Air Carrier
Subsidiary may retain a maximum of 7.353 million shares and a minimum of 625,000
shares.  Moreover, the Option Agreements require us to repurchase the portion of
shares  determined  in  accordance  with  the  preceding  whenever we complete a
private  placement of our securities for an aggregate purchase price of at least
$3.0  million.

     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 chartered basis.
Currently,  only  three  of  the  Air  Carrier  Subsidiary's leased aircraft are
flying, as five of these aircraft are currently down for routine maintenance and
refurbishing.  However,  we  will  need to raise about $350,000 to complete this
maintenance and refurbishing. Our goal is to raise this amount, and complete the
maintenance  and  refurbishing,  so  that  all  eight planes will be phased into
operation.  Although  we  are  now  seeking  to  raise  this  amount, we have no
assurance  that  we  will  be  able  to  do so. We are striving to get all eight
aircraft  operational  in  order  to  fill the voids in the market caused by the
challenging  economy  in  the market. This challenging market has caused some of
our  competitors  to  suspend or cease flying, creating a void in certain routes
that  we  believe we can fill in a manner positive to our financial performance.
The  additional  aircraft will allow the West Palm Beach market to be opened and
new  destination  in  the  Bahamas  started.

     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  received  from  the  addition  of  this  aircraft  will  be recognized
beginning in the second quarter. We expect to return another aircraft to service
in  June.  Efforts  are  continuing,  to  secure financing that will allow us to
accelerate  the  return  to  service  of  additional  aircraft.

     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 effectivelate 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. 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 of 2011, the reservation module is in beta tesing at this time and will be
fully  implemented  by October 1, 2011. 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.

     On  August 10, 2011 Twin Air Calyspo 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 of Cuba
and  be  in  a  position  to  provide  additional  services  should  the current
government  embargo  of  trade  with  Cuba  be  relaxed  or  lifted.

     On  August  12,  2011 Twin Air Calypso Limited, Inc. began providing ground
handling  services  for  Regional  Air,  a  commercial  operator  from Freeport,
Bahamas.  Regional  is  using  our  facility  and personnel in Ft. Lauderdale to
service  their current four weekly flights from Freeport, Bahamas using 19-place
aircraft.  Regional  plans  to  begin twice daily service from Ft. Lauderdale to
Bimini,  Bahamas  in  September  2011.  The  Freeport and Bimini markets are not
served  by  us  and when Regional fully implements its schedule their use of our
facility will provide approximately $100,000.00 per year in passive revenue. The
management  of both AvStar and Regional are exploring additional areas of common
interest  that  can  be  developed  in  the  near  future.

     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.

     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 six months ended June 30, 2011,
we reported a net income of $939 compared to a loss of $822,972 reported for the
six  months  ended  June  30,  2010. For the six months ending June 30, 2011 the
operating  entities  of  Twin  Air Calypso Limited and Twin Air Calypso Services
generated  a  net profit of approximately $29, 000.00. The consolidated loss was
generated  from  expenses  of the non performing oil and gas leases and interest
from  legacy  debt.

     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

     Financial  results  for  the quarter and six months ended June 30, 2011 are
not  directly  comparable  to  financial  results for the quarter and six months
ended  June  30, 2010.  During August 2010, we completed the acquisition of Twin
Air Calypso Limited, Inc. ("TAC Limited").  TAC Limited operates air carrier and
air  charter  services.  This  acquisition  appreciably  affected  the financial
results  for  the  quarter  and  six  months ended June 30, 2011 compared to the
financial  results  for  the  quarter  and  six  months  ended  June  30,  2010.

    QUARTER ENDED JUNE 30, 2011 COMPARED TO THE QUARTER ENDED JUNE 30, 2010
    -----------------------------------------------------------------------

     REVENUES.  Revenues for the second quarter 2011 were $645,363(consisting of
637,161  of revenues from avaition opertions and $8,202 in revenues from oil and
gas  operations)  compared  to  revenue  of  $55,844 for the second quarter 2010
(consisting of $55,703 in revenues from aviation operations and $141 in revenues
from  oil and gas operations). The increase in aviation operations in the second
quarter of 2011 from the second quarter of 2010 resulted from the acquisition of
TAC  Limited  in August 2010. The increase in oil and gas revenues in the second
quarter of 2011 from the second quarter 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  for  the  second  quarter  2011  were
$654,197 compared to costs and expenses of $277,375 for the second quarter 2010.
This  increase  in  costs  and  expenses  reflects  the  following:

     *      $513,466  in  costs of goods  sold  in  the second quarter 2011 from
            aviation  operations  compared  to $67,764 in costs of goods sold in
            the second quarter 2010 as  the  volume  of  services  provided
            increased.

     *      $140,471  in  selling, general and administrative expenses including
            stock based  compensation  in  the  second  quarter 2011 compared to
            $206,611 in these expenses  in  the  second  quarter  2010.

     NET  LOSS.  As  a  result  of the considerable decrease in revenues and the
large  increase in selling, general and administrative expenses, the net loss of
$20,244  for the second quarter 2010 represents an improvement of $201,287  from
the  net  loss  of  $221,531  for  the  second  quarter  2010.

 SIX MONTHS ENDED JUNE 30, 2011 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2010
 -----------------------------------------------------------------------------

     REVENUES.  Revenues  for the first half 2011 were $1,231,098, consisting of
$1,221,603  in  revenues  from  aviation  operations  and  $9,495 in oil and gas
revenues.  These revenues represent a great increase from revenues for the first
half  2010  of  $157,362,  consisting  of  $156,131  in  revenues  from aviation
operations  and  $1,231  in  oil  and  gas  revenues.  The  increase in aviation
operations  in  the first half of 2011 from the first half of 2010 resulted from
the  Acquisition  of  TAC  Limited  in  August 2010. The increase in oil and gas
revenues  in the first half of 2011 from the first half 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 $1,207,639 in the first half 2011
from  $980,334  in  the  first  half  2010.  This increase in costs and expenses
reflects  the  following:

     *     $930,686  in  costs  of  goods  sold  in the first half 2011 from
           aviation operations  compared  to  $128,384 in costs of goods sold in
           the first  half 2010 from  aviation  operations  as  the  volume  of
           services  provided  increased

     *     $276,433  in  selling, general and administrative expenses including
           stock based compensation in the first half 2011 compared to $708,161
           in these expenses in  the  first  half  2010

     NET  INCOME.  As a result of the considerable increase in revenues, the net
income  of  $939  for  the first half 2011 represents an improvement of $823,911
from  the  net  loss  of  $822,972  for  first  half  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  use of our facility by Regional Air from Freeport, Bahamas will offset
a portion of our fixed costs in Ft. Lauderdale and offer other opportunities for
cooperative  ventures  in  the  future.

     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

     As  of  June 30, 2011, we had a working capital deficiency of approximately
$863,102.  Currently,  we  have  limited  financial  ability  to  pursue our new
business  plan.  In  addition  to  stabilizing  our two existing businesses, our
immediate  financial  goal  is  to  raise approximately $350,000 to complete the
scheduled maintenance and refurbishing of our remaining eight aircraft. Although
we  are  now  seeking to raise this amount, we have no assurance that we will be
able  to  do so. We believe that, once these aircraft are flying again, our goal
of  stabilizing  our  existing  business  can  be accomplished, and we can start
considering  the  resumption  of  our  original business plan of acquiring other
businesses.  Once the stabilization is accomplished (if at all), we begin trying
to  determine  the  scope  of the business activities that we will pursue in the
foreseeable future. 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 two convertible promissory
notes  (singly  an "Asher  Note"  and  collectively  the "Asher Notes") to Asher
Enterprises,  Inc. ("Asher") in consideration of certain amounts loaned by Asher
to  us.  Four similar Asher Notes have been fully converted, leaving outstanding
a  Fifth Asher Note (which has been partially converted) and a Sixth Asher Note.
The  following  table  gives certain information about the Fifth and Sixth Asher
Notes:

          Designation     Issuance     Original Principal     Maturity
          of Note      Date of Note     Amount of Note     Date of Note
          -------      ------------     --------------     ------------
           Fifth       12/20/2010        $45,000            9/22/2011
           Sixth       3/28/2011         $50,000            12/30/2011
                                         -------
                             TOTAL       $95,000

     While  the  terms  of  the  two  Asher Notes vary somewhat, these terms are
generally  the  same  from  note to note.  The following is a description of the
terms  of  the  two  Asher  Notes.

     Each  of  the Asher Notes bears regular interest at a rate of 8% per annum,
with  a  default rate of 22% per annum.  The Asher Notes are unsecured, and each
of  them  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 an 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 an
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.  Each conversion price for the Asher
Notes  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 discounts for the variable conversion prices provided
for  in  the  Asher Notes range from 50% for the Sixth Asher Note to 55% for the
Fifth Asher Note.  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  one  or more of the Asher Notes.  As of the date of this Report $27,000
remained outstanding on the Fifth Asher Note, while $50,000 remained outstanding
on  the  Sixth  Asher  Note

     The  Asher  Notes  (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 Notes.  A default on any of the Asher
Notes 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 related 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 $60,000.
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.

     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, and in  July,
2011,  we  issued  an  additional  convertible  promissory  note in the original
amount  of  $60,000  to  Schulle  in  lieu  of cash for consulting fees provided
to  us.  (The  three  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.  In  view  of  our  most  recent  closing trading prices and the
minimum  variable  conversion  price,  Schulle  could convert the two additional
convertible  promissory  notes  into  an  aggregate  of approximately 27 million
shares.

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

     We  have  outstanding  the  following  notes that became due and payable on
December  1,  2008.  These  notes  have  an  aggregate principal amount totaling
$624,771,  plus  accrued  interest  of  as  of August 13, 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 April 13, 2011 was $103,683, plus accrued
interest.

(b)     Note  payable to Charles Pollock, our former chief executive officer and
a  significant stockholder of ours. 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 April 13, 2011 was $400,911, plus accrued
interest.

(c)     Note  payable  to  Mark  Weller,  our former president and a significant
stockholder  of ours. 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  April  13,  2011  was  $112,169,  plus  accrued  interest.

OFF-BALANCE SHEET ARRANGEMENTS

     We have no off balance sheet arrangements.

OIL AND GAS ASSETS

     Management  is  currently  exploring  options for our remaining oil and gas
assets, which may include a sale of it or a spin-off of them to shareholders, so
that  management  can  devote  its  entire  attention  to  our  current aviation
business.

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 four 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.

                                   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)
August 22, 2011