<PAGE>

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

                                    FORM 10-K

(Mark One)

|X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended        December 31, 1999
                         -------------------------------------------------------

                                       OR

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                         to
                              ------------------------    ----------------------

Commission file number           0-19137
                      ----------------------------------------------------------

                  AIRFUND II International Limited Partnership
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Massachusetts                              04-3057290
----------------------------------------   -------------------------------------
(State or other jurisdiction of            (IRS Employer
incorporation or organization)             Identification No.)

88 Broad St. Sixth Floor, Boston, MA       02110
----------------------------------------   -------------------------------------
(Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code   (617) 854-5800
                                                  ------------------------------
Securities registered pursuant to Section 12(b) of the Act   NONE
                                                          ----------------------

      Title of each class              Name of each exchange on which registered
---------------------------------      -----------------------------------------
---------------------------------      -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

            2,714,647 Units Representing Limited Partnership Interest
--------------------------------------------------------------------------------
                                (Title of class)

--------------------------------------------------------------------------------
                                (Title of class)

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

     State the aggregate market value of the voting stock held by nonaffiliates
of the registrant. Not applicable. Securities are nonvoting for this purpose.
Refer to Item 12 for further information.

                       DOCUMENTS INCORPORATED BY REFERENCE
       Portions of the Registrant's Annual Report to security holders for
                the year ended December 31, 1999 (Part I and II)
<PAGE>

                  AIRFUND II International Limited Partnership

                                    FORM 10-K

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
                                          PART I
<S>         <C>                                                                           <C>
Item 1.     Business                                                                          3
Item 2.     Properties                                                                        5
Item 3.     Legal Proceedings                                                                 5
Item 4.     Submission of Matters to a Vote of Security Holders                               5

                                         PART II
Item 5.     Market for the Partnership's Securities and Related Security Holder Matters       6
Item 6.     Selected Financial Data                                                           8
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of
            Operations                                                                        8
Item 8.     Financial Statements and Supplementary Data                                       8
Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial
            Disclosure                                                                        8

                                         PART III
Item 10.    Directors and Executive Officers of the Partnership                               9
Item 11.    Executive Compensation                                                           11
Item 12.    Security Ownership of Certain Beneficial Owners and Management                   11
Item 13.    Certain Relationships and Related Transactions                                   12


                                         PART IV
Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K               14-17
</TABLE>


                                       2
<PAGE>

PART I

Item 1. Business.

    (a) General Development of Business

    AIRFUND II International Limited Partnership (the "Partnership") was
organized as a limited partnership under the Massachusetts Uniform Limited
Partnership Act (the "Uniform Act") on July 20, 1989 for the purpose of
acquiring and leasing to third parties a specified portfolio of used commercial
aircraft. Partners' capital initially consisted of contributions of $1,000 from
the General Partner (AFG Aircraft Management Corporation, a Massachusetts
corporation) and $100 from the Initial Limited Partner (AFG Assignor
Corporation, a Massachusetts corporation). The Partnership issued 2,714,647
units, representing assignments of limited partnership interests (the "Units"),
to 4,192 investors. Unitholders and Limited Partners (other than the Initial
Limited Partner) are collectively referred to as Recognized Owners. The General
Partner is an affiliate of Equis Financial Group Limited Partnership (formerly
known as American Finance Group), a Massachusetts limited partnership ("EFG").
The common stock of the General Partner is owned by AF/AIP Programs Limited
Partnership. EFG and a wholly owned affiliate are the 99% limited partners and
AFG Programs, Inc., a Massachusetts corporation that is wholly-owned by Geoffrey
A. MacDonald, is the 1% general partner. The General Partner is not required to
make any other capital contributions to the Partnership except as may be
required under the Uniform Act and Section 6.1(b) of the Amended and Restated
Agreement and Certificate of Limited Partnership (the "Restated Agreement, as
amended").

    (b) Financial Information About Industry Segments

    The Partnership is engaged in only one industry segment the business of
acquiring used commercial aircraft and leasing the aircraft to creditworthy
lessees on a full-payout or operating lease basis. (Full-payout leases are those
in which aggregate undiscounted noncancellable rents equal or exceed the
acquisition cost of the aircraft. Operating leases are those in which the
aggregate undiscounted noncancellable rental payments are less than the
acquisition cost of the aircraft). Industry segment data is not applicable.

    (c) Narrative Description of Business

    The Partnership was organized to acquire a specified portfolio of used
commercial jet aircraft subject to various full-payout and operating leases and
to lease the aircraft to third parties as income-producing investments. More
specifically, the Partnership's primary investment objectives were to acquire
and lease aircraft that would:

    1. Generate quarterly cash distributions;

    2. Preserve and protect invested capital; and

    3. Maintain substantial residual value for ultimate sale of the aircraft.

    The Partnership has the additional objective of providing certain federal
income tax benefits.

    The initial Interim Closing date of the Offering of Units of the Partnership
was May 17,1990. The initial purchase of aircraft and the associated lease
commitments occurred on May 18, 1990. Additional purchases of aircraft (or
proportionate interests in aircraft) occurred at each of five subsequent Interim
Closings, the last of which occurred on June 28, 1991, the Final Closing. The
acquisitions of the Partnership's aircraft and the associated leases are
described in Note 3 to the financial statements included in Item 14, herein. The
Restated Agreement, as amended, provides that the Partnership will terminate no
later than December 31, 2005. However, the Partnership is a Nominal Defendant in
a Class Action Lawsuit, the outcome of which could significantly alter the
nature of the Partnership's organization and its future business operations. See
Note 7 to the financial statements in the 1999 Annual Report.

                                       3
<PAGE>

    The Partnership has no employees; however, it is managed pursuant to a
Management Agreement with EFG or one of its affiliates (the "Manager"). The
Manager's role, among other things, is to (i) evaluate, select, negotiate, and
consummate the acquisition of aircraft, (ii) manage the leasing, re-leasing,
financing, and refinancing of aircraft, and (iii) arrange the resale of
aircraft. The Manager is compensated for such services as provided for in the
Restated Agreement, as amended, described in Item 13, herein and Note 4 to the
financial statements included in Item 14, herein.

    The Partnership's investment in commercial aircraft is, and will continue to
be, subject to various risks, including physical deterioration, technological
obsolescence and defaults by lessees. A principal business risk of owning and
leasing aircraft is the possibility that aggregate lease revenues and aircraft
sale proceeds will be insufficient to provide an acceptable rate of return on
invested capital after payment of all operating expenses. In addition, the
leasing industry is very competitive. The Partnership is subject to considerable
competition when the aircraft are re-leased or sold at the expiration of current
lease terms. The Partnership must compete with lease programs offered directly
by manufacturers and other equipment leasing companies, including lease programs
organized and managed similarly to the Partnership, and including other
EFG-sponsored partnerships and trusts, which may seek to re-lease or sell
aircraft within their own portfolios to the same customers as the Partnership.
Many competitors have greater financial resources and more experience than the
Partnership, the General Partner and the Manager. In addition, default by a
lessee under a lease may cause aircraft to be returned to the Partnership at a
time when the General Partner or the Manager is unable to arrange for the
re-lease or sale of such aircraft. This could result in the loss of anticipated
revenues.

    In recent years, market values for certain models of used commercial jet
aircraft have deteriorated. Consistent price competition and other pressures
within the airline industry have inhibited sustained profitability for many
carriers. Most major airlines have had to re-evaluate their aircraft fleets and
operating strategies. Aircraft condition, age passenger capacity, distance
capability, fuel efficiency, and other factors also influence market demand and
market values for passenger jet aircraft.

    Notwithstanding the foregoing, the ultimate realization of residual value
for any aircraft is dependent upon many factors, including EFG's ability to sell
and re-lease the aircraft. Changes in market conditions, industry trends,
technological advances, and other events could converge to enhance or detract
from asset values at any given time. Accordingly, EFG will attempt to monitor
changes in the airline industry in order to identify opportunities which may be
advantageous to the Partnership and which will maximize total cash returns for
each aircraft.

    The General Partner will determine when each aircraft should be sold and the
terms of such sale based upon numerous factors with a view toward achieving the
investment objectives of the Partnership. The General Partner is authorized to
sell the aircraft prior to the expiration of the initial lease terms and intends
to monitor and evaluate the market for resale of the aircraft to determine
whether an aircraft should remain in the Partnership's portfolio or be sold. As
an alternative to sale, the Partnership may enter re-lease agreements when
considered advantageous by the General Partner and the Manager.

    Revenue from major individual lessees which accounted for 10% or more of
lease revenue during the years ended December 31, 1999, 1998 and 1997 is
incorporated herein by reference to Note 2 to the financial statements in the
1999 Annual Report. Refer to Item 14(a)(3) for lease agreements filed with the
Securities and Exchange Commission.

    EFG is a Massachusetts limited partnership formerly known as American
Finance Group (AFG"). AFG was established in 1988 as a Massachusetts general
partnership and succeeded American Finance Group, Inc., a Massachusetts
corporation organized in 1980. EFG and its subsidiaries (collectively, the
"Company") are engaged in various aspects of the equipment leasing business,
including EFG's role as Manager or Advisor to the Partnership and several other
direct-participation equipment leasing programs sponsored or co-sponsored by EFG
(the "Other Investment Programs"). The Company arranges to broker or originate
equipment leases, acts as remarketing agent and asset manager, and provides
leasing support services, such as billing, collecting, and asset tracking.

                                       4
<PAGE>

    The general partner of EFG, with a 1% controlling interest, is Equis
Corporation, a Massachusetts corporation owned and controlled entirely by Gary
D. Engle, its President, Chief Executive Officer and sole Director. Equis
Corporation also owns a controlling 1% general partner interest in EFG's 99%
limited partner, GDE Acquisition Limited Partnership ("GDE LP"). Mr. Engle
established Equis Corporation and GDE LP in December 1994 for the sole purpose
of acquiring the business of AFG.

    In January 1996, the Company sold certain assets of AFG relating primarily
to the business of originating new leases, and the name "American Finance
Group," and its acronym, to a third party. AFG changed its name to Equis
Financial Group Limited Partnership after the sale was concluded. Pursuant to
terms of the sale agreements, EFG specifically reserved the rights to continue
using the name American Finance Group and its acronym in connection with the
Partnership and the Other Investment Programs and to continue managing all
assets owned by the Partnership and the Other Investment Programs.

    (d) Financial Information About Foreign and Domestic Operations and Export
        Sales

    Not applicable.

Item 2. Properties.

    Incorporated herein by reference to Note 3 to the financial statements in
the 1999 Annual Report.

Item 3. Local Proceedings.

    Incorporated herein by reference to Note 7 to the financial statements in
the 1999 Annual Report.

Item 4. Submission of Matters to a Vote of Security Holders.

    None.

                                       5
<PAGE>

PART II

Item 5. Market for the Partnership's Securities and Related Security Holder
        Matters.

    (a) Market Information

    There is no public market for the resale of the Units and it is not
anticipated that a public market for resale of the Units will develop.

    (b) Approximate Number of Security Holders

    At December 31, 1999, there were 3,910 record holders of Units in the
Partnership.

    (c) Dividend History and Restrictions

    Historically, the amount of cash distributions to be paid to the Partners
has been determined on a quarterly basis (see detail below). The Partnership did
not declare distributions in any of the years ended December 31, 1999, 1998 and
1997.

    The Partnership is a Nominal Defendant in a Class Action Lawsuit described
in Note 7 to the financial statements in the 1999 Annual Report. The proposed
settlement to that lawsuit, if effected, will materially change the future
organizational structure and business interests of the Partnership, as well as
its cash distribution policies. The General Partner believes that it will be in
the Partnership's best interests to continue to suspend the payment of quarterly
cash distributions pending final resolution of the Class Action Lawsuit.
Accordingly, future cash distributions are not expected to be paid until the
Class Action Lawsuit is adjudicated.

    There are no formal restrictions under the Restated Agreement, as amended,
that materially limit the Partnership's ability to pay cash distributions,
except that the General Partner may suspend or limit cash distributions to
ensure that the Partnership maintains sufficient working capital reserves to
cover, among other things, operating costs and potential expenditures, such as
refurbishment costs to remarket aircraft upon lease expiration. Liquidity is
especially important as the Partnership matures and sells aircraft, because the
remaining aircraft portfolio consists of fewer revenue-producing assets that are
available to cover prospective cash disbursements. Insufficient liquidity could
inhibit the Partnership's ability to sustain its operations or maximize the
realization of proceeds from remarketing its remaining aircraft.

    The management and remarketing of aircraft can involve, among other things,
significant costs and lengthy remarketing initiatives. Although the
Partnership's lessees are required to maintain the aircraft during the period of
lease contract, repair, maintenance, and/or refurbishment costs at lease
expiration can be substantial. For example, an aircraft that is returned to the
Partnership meeting minimum airworthiness standards, such as flight hours or
engine cycles, nonetheless may require heavy maintenance in order to bring its
engines, airframe and other hardware up to standards that will permit its
prospective use in commercial air transportation. At December 31, 1999, the
Partnership had ownership interests in six commercial jet aircraft (and two
aircraft engines). Three of the aircraft are Boeing 737 aircraft formerly leased
to Southwest Airlines, Inc (Southwest"). The lease agreements for each of these
aircraft expired on December 31, 1999 and Southwest elected to return the
aircraft. A fourth aircraft, a Boeing 727-251 ADV aircraft formerly leased by
Transmeridian Airlines, Inc., is being stored at a repair facility in Louisiana.
Each of these aircraft are Stage 2 aircraft, meaning that they are prohibited
from operating in the United States after December 31, 1999 unless they are
retro-fitted with hush-kits to meet Stage 3 noise regulations promulgated by the
Federal Aviation Administration. The cost to hush-kit an aircraft, such as the
Partnership's Boeing 727 and Boeing 737s, can approach $2 million. At this time,
the General Partner is attempting to remarket these assets without further
capital investment by either re-leasing the aircraft to a user outside of the
United States or selling the aircraft as they are without retro-fitting the
aircraft to conform to Stage 3 standards. The remaining two aircraft in the
Partnership's portfolio already are Stage 3 compliant. One of these aircraft had
a lease term that expired in January 2000 and is being held in storage pending
the outcome of ongoing remarketing efforts. The other aircraft has a lease term
expiring in April 2001.

                                       6
<PAGE>

    Cash distributions consist of Distributable Cash From Operations and
Distributable Cash From Sales or Refinancings.

    "Distributable Cash From Operations" means the net cash provided by the
Partnership's normal operations after general expenses and current liabilities
of the Partnership are paid, reduced by any reserves for working capital and
contingent liabilities to be funded from such cash, to the extent deemed
reasonable by the General Partner, and increased by any portion of such reserves
deemed by the General Partner not to be required for Partnership operations and
reduced by all accrued and unpaid Equipment Management Fees and, after Payout,
further reduced by all accrued and unpaid Subordinated Remarketing Fees.
Distributable Cash From Operations does not include any Distributable Cash From
Sales or Refinancings.

    "Distributable Cash From Sales or Refinancings" means Cash From Sales or
Refinancings as reduced by (i) (a) for a period of two years from Final Closing,
Cash From Sales or Refinancings, which the General Partner at its sole
discretion reinvests in additional aircraft, provided, however, that Cash From
Sales or Refinancings will be reinvested in additional aircraft only if
Partnership revenues are sufficient to make distributions to the Recognized
Owners in the amount of the income tax, if any, due from a Recognized Owner in
the 33% combined federal and state income tax bracket as a result of such sale
or refinancing of aircraft, and (b) amounts realized from any loss or
destruction of any aircraft which the General Partner reinvests in replacement
aircraft to be leased under the original lease of the lost or destroyed
aircraft, and (ii) any accrued and unpaid Equipment Management Fees and, after
Payout, any accrued and unpaid Subordinated Remarketing Fees.

    "Cash From Sales or Refinancings" means cash received by the Partnership
from Sale or Refinancing transactions, as (i) reduced by (a) all debts and
liabilities of the Partnership required to be paid as a result of Sale or
Refinancing transactions, whether or not then due and payable (including any
liabilities on aircraft sold which are not assumed by the buyer and any
remarketing fees required to be paid to persons not affiliated with the General
Partner, but not including any Subordinated Remarketing Fees required to be
paid) and (b) any reserves for working capital and contingent liabilities funded
from such cash to the extent deemed reasonable by the General Partner and (ii)
increased by any portion of such reserves deemed by the General Partner not to
be required for Partnership operations. In the event the Partnership accepts a
note in connection with any Sale or Refinancing transaction, all payments
subsequently received in cash by the Partnership with respect to such note shall
be included in Cash From Sales or Refinancings, regardless of the treatment of
such payments by the Partnership for tax or accounting purposes. If the
Partnership receives purchase money obligations in payment for aircraft sold,
which are secured by liens on such aircraft, the amount of such obligations
shall not be included in Cash From Sales or Refinancings until the obligations
are fully satisfied.

    Each distribution of Distributable Cash From Operations and Distributable
Cash From Sales or Refinancings of the Partnership shall be made as follows:
Prior to Payout, (i) Distributable Cash From Operations will be distributed 95%
to the Recognized Owners and 5% to the General Partner and (ii) Distributable
Cash From Sales or Refinancings shall be distributed 99% to the Recognized
Owners and 1% to the General Partner. After Payout, (i) all Distributions will
be distributed 99% to the General Partner and 1% to the Recognized Owners until
the General Partner has received an amount equal to 5% of all Distributions made
by the Partnership and (ii) thereafter, all Distributions will be made 90% to
the Recognized Owners and 10% to the General Partner.

    "Payout" is defined as the first time when the aggregate amount of all
distributions to the Recognized Owners of Distributable Cash From Operations and
Distributable Cash From Sales or Refinancings equals the aggregate amount of the
Recognized Owners' original capital contributions plus a cumulative annual
return of 10% (compounded quarterly and calculated beginning with the last day
of the month of the Partnership's Closing Date) on their aggregate unreturned
capital contributions. For purposes of this definition, capital contributions
shall be deemed to have been returned only to the extent that distributions of
cash to the Recognized Owners exceed the amount required to satisfy the
cumulative annual return of 10% (compounded quarterly) on the Recognized Owners'
aggregate unreturned capital contributions, such calculation to be based on the
aggregate unreturned capital contributions outstanding on the first day of each
fiscal quarter.

                                       7
<PAGE>

Item 6. Selected Financial Data.

    Incorporated herein by reference to the section entitled "Selected Financial
Data" in the 1999 Annual Report.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

    Incorporated herein by reference to the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
1999 Annual Report.

Item 8. Financial Statements and Supplementary Data.

    Incorporated herein by reference to the financial statements and
supplementary data included in the 1999 Annual Report.


Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

None.

                                       8
<PAGE>

PART III

Item 10. Directors and Executive Officers of the Partnership.

    (a-b) Identification of Directors and Executive Officers

    The Partnership has no Directors or Officers. As indicated in Item 1 of this
report, AFG Aircraft Management Corporation is the sole General Partner of the
Partnership. Under the Restated Agreement, as amended, the General Partner is
solely responsible for the operation of the Partnership's properties. The
Recognized Owners have no right to participate in the control of the
Partnership's general operations, but they do have certain voting rights, as
described in Item 12 herein. The names, titles and ages of the Directors and
Executive Officers of the General Partner as of March 15, 2000 are as follows:

DIRECTORS AND EXECUTIVE OFFICERS OF
THE GENERAL PARTNER (See Item 13)

<TABLE>
<CAPTION>
        Name                       Title                         Age        Term
        ----                       -----                         ---        ----
<S>                       <C>                                    <C>      <C>
Geoffrey A. MacDonald     Chairman and a member of the                     Until a
                          Executive Committee of EFG                      successor
                          and President and a Director                     is duly
                          of the General Partner                 51        elected
                                                                             and
Gary D. Engle             President and Chief Executive                   qualified
                          Officer and member of the
                          Executive Committee of EFG and a
                          Director of the General Partner        51

Gary M. Romano            Executive Vice President and Chief
                          Operating Officer of EFG and
                          Clerk of the General Partner           40

James A. Coyne            Executive Vice President of EFG        39

Michael J. Butterfield    Senior Vice President, Finance and
                          Treasurer of EFG and Treasurer of
                          the General Partner                    40

Sandra L. Simonsen        Senior Vice President, Information
                          Systems of EFG                         49

Gail D. Ofgant            Senior Vice President, Lease
                          Operations of EFG                      34
</TABLE>

(c)   Identification of Certain Significant Persons

None.

(d)   Family Relationship

No family relationship exists among any of the foregoing Partners, Directors or
Executive Officers.

                                       9
<PAGE>

(e)   Business Experience

    Mr. MacDonald, age 51, is a co-founder, Chairman and a member of the
Executive Committee of EFG and President and a Director of the General Partner.
Mr. MacDonald was also a co-founder, Director, and Senior Vice President of
EFG's predecessor corporation from 1980 to 1988. Mr. MacDonald is President of
American Finance Group Securities Corp. and a limited partner in Atlantic
Acquisition Limited Partnership ("AALP") and Old North Capital Limited
Partnership ("ONC"). Prior to co-founding EFG's predecessors, Mr. MacDonald held
various executive and management positions in the leasing and pharmaceutical
industries. Mr. MacDonald holds a M.B.A. from Boston College and a B.A. degree
from the University of Massachusetts (Amherst).

    Mr. Engle, age 51, is President and Chief Executive Officer of EFG and sole
shareholder and Director of its general partner, Equis Corporation and a member
of the Executive Committee of EFG and President of AFG Realty Corporation. Mr.
Engle joined EFG in 1990 as Executive Vice President and acquired control of EFG
and its subsidiaries in December 1994. Mr. Engle is Vice President and a
Director of certain of EFG's subsidiaries and affiliates, a limited partner in
AALP and ONC and controls the general partners of AALP and ONC. Mr. Engle is
also Chairman, Chief Executive Officer, and a member of the Board of Directors
of Semele Group, Inc. ("Semele"). From 1987 to 1990, Mr. Engle was a principal
and co-founder of Cobb Partners Development, Inc., a real estate and mortgage
banking company. From 1980 to 1987, Mr. Engle was Senior Vice President and
Chief Financial Officer of Arvida Disney Company, a large-scale community
development company owned by Walt Disney Company. Prior to 1980, Mr. Engle
served in various management consulting and institutional brokerage capacities.
Mr. Engle has a MBA from Harvard University and a BS degree from the University
of Massachusetts (Amherst).

    Mr. Romano, age 40, became Executive Vice President and Chief Operating
Officer of EFG, and Secretary of Equis Corporation in 1996 and is Secretary or
Clerk of several of EFG's subsidiaries and affiliates. Mr. Romano joined EFG in
November 1989, became Vice President and Controller in April 1993 and Chief
Financial Officer in April 1995. Mr. Romano assumed his current position in
April 1996. Mr. Romano is also Vice President and Chief Financial Officer of
Semele. Prior to joining EFG, Mr. Romano was Assistant Controller for a
privately held real estate development and mortgage origination company that he
joined in 1987. Previously, Mr. Romano was an Audit Manager at Ernst & Whinney
(now Ernst & Young LLP), where he was employed from 1982 to 1986. Mr. Romano is
a Certified Public Accountant and holds a B.S. degree from Boston College.

    Mr. Coyne, age 39, is Executive Vice President, Capital Markets of EFG and
President, Chief Operating Officer and a member of the Board of Directors of
Semele. Mr. Coyne joined EFG in 1989, remained until May 1993, and rejoined EFG
in November 1994. In September 1997, Mr. Coyne was appointed Executive Vice
President of EFG. Mr. Coyne is a limited partner in AALP and ONC. From May 1993
through November 1994, he was employed by the Raymond Company, a private
investment firm, where he was responsible for financing corporate and real
estate acquisitions. From 1985 through 1989, Mr. Coyne was affiliated with a
real estate investment company and an equipment leasing company. Prior to 1985,
he was with the accounting firm of Ernst & Whinney (now Ernst & Young LLP). He
has a BS in Business Administration from John Carroll University, a Masters
Degree in Accounting from Case Western Reserve University and is a Certified
Public Accountant.

    Mr. Butterfield, age 40, is Senior Vice President, Finance and Treasurer of
EFG and certain of its affiliates and is Treasurer of the General Partner and
Semele. Mr. Butterfield joined EFG in June 1992, became Vice President, Finance
and Treasurer of EFG and certain of its affiliates in April 1996 and was
promoted to Senior Vice President, Finance and Treasurer of EFG and certain of
its affiliates in July 1998. Prior to joining EFG, Mr. Butterfield was an Audit
Manager with Ernst & Young LLP, which he joined in 1987. Mr. Butterfield was
employed in public accounting and industry positions in New Zealand and London
(UK) prior to coming to the United States in 1987. Mr. Butterfield attained his
Associate Chartered Accountant (A.C.A.) professional qualification in New
Zealand and has completed his CPA requirements in the United States. He holds a
Bachelor of Commerce degree from the University of Otago, Dunedin, New Zealand.

    Ms. Simonsen, age 49, joined EFG in February 1990 and was promoted to Senior
Vice President, Information Systems of EFG in April 1996. Prior to joining EFG,
Ms. Simonsen was Vice President, Information Systems with Investors Mortgage
Insurance Company, which she joined in 1973. Ms. Simonsen provided systems
consulting

                                       10
<PAGE>

for a subsidiary of American International Group and authored a software program
published by IBM. Ms. Simonsen holds a BA degree from Wilson College.

    Ms. Ofgant, age 34, is Senior Vice President, Lease Operations of EFG and
certain of its affiliates. Ms. Ofgant joined EFG in July 1989, was promoted to
Manager Lease Operations in April 1994, and became Vice President of Lease
Operations in April 1996. In July 1998, Ms. Ofgant was promoted to Senior Vice
President of Lease Operations. Prior to joining EFG, Ms. Ofgant was employed by
Security Pacific National Trust Company. Ms. Ofgant holds a BS degree in Finance
from Providence College.

    (f) Involvement in Certain Legal Proceedings

    None.

    (g) Promoters and Control Persons

    See Item 10 (a-b) above.


Item 11. Executive Compensation.

    (a)     Cash Compensation

    Currently, the Partnership has no employees. However, under the terms of the
Restated Agreement, as amended, the Partnership is obligated to pay all costs of
personnel employed full or part-time by the Partnership, including officers or
employees of the General Partner or its Affiliates. There is no plan at the
present time to make any partners or employees of the General Partner or its
Affiliates employees of the Partnership. The Partnership has not paid and does
not propose to pay any options, warrants or rights to the officers or employees
of the General Partner or its Affiliates.

    (b) Compensation Pursuant to Plans

    None.

    (c) Other compensation

    Although the Partnership has no employees, as discussed in Item 11(a),
pursuant to Section 10.4(c) of the Restated Agreement, as amended, the
Partnership incurs a monthly charge for personnel costs of the Manager for
persons engaged in providing administrative services to the Partnership. A
description of the remuneration paid by the Partnership to the Manager for such
services is included in Item 13, herein, and in Note 4 to the financial
statements included in Item 14, herein.

    (d) Compensation of Directors

    None.

    (e) Termination of Employment and Change of Control Arrangement

    There exists no remuneration plan or arrangement with the General Partner or
its Affiliates which results or may result from their resignation, retirement or
any other termination.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

    By virtue of its organization as a limited partnership, the Partnership has
outstanding no securities possessing traditional voting rights. However, as
provided for in Section 11.2(a) of the Restated Agreement, as amended

                                       11
<PAGE>

(subject to Sections 11.2(b) and 11.3), a majority interest of the Recognized
Owners has voting rights with respect to:

    1. Amendment of the Restated Agreement;

    2. Termination of the Partnership;

    3. Removal of the General Partner; and

    4.  Approval or disapproval of the sale of all, or substantially all, of the
        assets of the Partnership (except in the orderly liquidation of the
        Partnership upon its termination and dissolution).

    No person or group is known by the General Partner to own beneficially more
than 5% of the Partnership's 2,714,647 outstanding Units as of March 1, 2000.

    The ownership and organization of EFG is described in Item 1 of this report.

Item 13. Certain Relationships and Related Transactions.

    The General Partner of the Partnership is AFG Aircraft Management
Corporation, an affiliate of EFG.

    (a) Transactions with Management and Others

    All operating expenses incurred by the Partnership are paid by EFG on behalf
of the Partnership and EFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during the years ended December 31,
1999, 1998 and 1997, which were paid or accrued by the Partnership to EFG or its
Affiliates, are as follows:

<TABLE>
<CAPTION>
                                           1999             1998            1997
                                           ----             ----            ----
<S>                                     <C>              <C>             <C>
Equipment management fees               $   92,059     $   156,535       $   161,231
Administrative charges                      71,699          53,676            50,304
Reimbursable operating expenses
   due to third parties                  1,987,647       1,762,271         1,240,204
                                       -----------     -----------      ------------
                      Total            $ 2,151,405     $ 1,972,482      $  1,451,739
                                       ===========     ===========      ============
</TABLE>

    As provided under the terms of the Management Agreement, EFG is compensated
for its services to the Partnership. Such services include acquisition and
management of equipment. For acquisition services, EFG was compensated by an
amount equal to 3.07% of Equipment Base Price paid by the Partnership. For
management services, EFG is compensated by an amount equal to 5% of gross
operating lease rental revenues and 2% of gross full payout lease rental
revenues received by the Partnership. Both acquisition and management fees are
subject to certain limitations defined in the Management Agreement.

    Administrative charges represent amounts owed to EFG, pursuant to Section
10.4(c) of the Restated Agreement, as amended, for persons employed by EFG who
are engaged in providing administrative services to the Partnership.
Reimbursable operating expenses due to third parties represent costs paid by EFG
on behalf of the Partnership which are reimbursed to EFG at actual cost.

    All aircraft were purchased from EFG or one of its Affiliates. The
Partnership's acquisition cost was determined by the method described in Note 2
to the financial statements included in Item 14, herein.

    All rents and proceeds from the sale of aircraft are paid directly to EFG or
to a lender. EFG temporarily deposits collected funds in a separate
interest-bearing escrow account prior to remittance to the Partnership. At

                                       12
<PAGE>

December 31, 1999, the Partnership was owed $1,476 by EFG for such funds and the
interest thereon. These funds were remitted to the Partnership in January 2000.

    In 1990, EFG assigned its equipment Management Agreement with the
Partnership to AF/AIP Programs Limited Partnership, and AF/AIP Programs Limited
Partnership entered into an identical management agreement with EFG. AF/AIP
Programs Limited Partnership also entered into a nonexclusive confirmatory
agreement with EFG's former majority owned subsidiary, AIRFUND Corporation
("AFC"), for the provision of aircraft remarketing services.

    Certain affiliates of the General Partner own Units in the Partnership as
follows:

                                   Number of       Percent of Total
           Affiliate              Units Owned      Outstanding Units
           ---------              -----------      -----------------
    Old North Capital Limited
      Partnership                    40,000           1.47%

     Old North Capital Limited Partnership ("ONC") is a Massachusetts limited
partnership formed in 1995 and an affiliate of EFG. The general partner of ONC
is controlled by Gary D. Engle. In addition, the limited partnership interests
of ONC are owned by Semele Group, Inc. ("Semele"). Gary D. Engle is Chairman and
CEO of Semele.

    (b) Certain Business Relationships

    None.

    (c) Indebtedness of Management to the Partnership

    None.

    (d) Transactions with Promoters

    See Item 13(a) above.

                                       13
<PAGE>

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

    (a) Documents filed as part of this report:

        (1) Financial Statements:

            Report of Independent Auditors ....................................*

            Statement of Financial Position
            at December 31, 1999 and 1998 .....................................*

            Statement of Operations
            for the years ended December 31, 1999, 1998 and 1997 ..............*

            Statement of Changes in Partners' Capital
            for the years ended December 31, 1999, 1998 and 1997 ..............*

            Statement of Cash Flows
            for the years ended December 31, 1999, 1998 and 1997 ..............*

            Notes to the Financial Statements .................................*

        (2) Financial Statement Schedules

            None required.

        (3) Exhibits:

            Except as set forth below, all Exhibits to Form 10-K, as set forth
            in Item 601 of Regulation S-K, are not applicable.

            A list of exhibits filed or incorporated by reference is as follows:

      Exhibit
      Number
      ------
        2.1     Plaintiffs' and Defendants' Joint Motion to Modify Order
                Preliminarily Approving Settlement, Conditionally Certifying
                Settlement Class and Providing for Notice of, and Hearing on,
                the Proposed Settlement was filed in the Registrant's Annual
                Report on Form 10-K/A for the year ended December 31, 1998 as
                Exhibit 2.1 and is incorporated herein by reference.

        2.2     Plaintiffs' and Defendants' Joint Memorandum in Support of Joint
                Motion to Modify Order Preliminarily Approving Settlement,
                Conditionally Certifying Settlement Class and Providing for
                Notice of, and Hearing on, the Proposed Settlement was filed in
                the Registrant's Annual Report on Form 10-K/A for the year ended
                December 31, 1998 as Exhibit 2.2 and is incorporated herein by
                reference.

*   Incorporated herein by reference to the appropriate portion of the 1999
    Annual Report to security holders for the year ended December 31, 1999 (see
    Part II).

                                       14
<PAGE>

      Exhibit
      Number
      ------
        2.3     Order Preliminarily Approving Settlement, Conditionally
                Certifying Settlement Class and Providing for Notice of, and
                Hearing on, the Proposed Settlement (August 20, 1998) was filed
                in the Registrant's Annual Report on Form 10-K/A for the year
                ended December 31, 1998 as Exhibit 2.3 and is incorporated
                herein by reference.

        2.4     Modified Order Preliminarily Approving Settlement, Conditionally
                Certifying Settlement Class and Providing for Notice of, and
                Hearing on, the Proposed Settlement (March 22, 1999) was filed
                in the Registrant's Annual Report on Form 10-K/A for the year
                ended December 31, 1998 as Exhibit 2.4 and is incorporated
                herein by reference.

        2.5     Plaintiffs' and Defendants' Joint Memorandum in Support of Joint
                Motion to Further Modify Order Preliminarily Approving
                Settlement, Conditionally Certifying Settlement Class and
                Providing for Notice of, and Hearing on, the Proposed Settlement
                is filed in the Registrant's Annual Report on Form 10-K for the
                year ended December 31,1999 as Exhibit 2.5 and is included
                herein.

        2.6     Second Modified Order Preliminarily Approving Settlement,
                Conditionally Certifying Settlement Class and Providing for
                Notice of, and Hearing on, the Proposed Settlement (March 5,
                2000) is filed in the Registrant's Annual Report on Form 10-K
                for the year ended December 31, 1999 as Exhibit 2.6 and is
                included herein.

        4       Amended and Restated Agreement and Certificate of Limited
                Partnership included as Exhibit A to the Prospectus, which is
                included in Registration Statement on Form S-1 (No. 33-25334).

       10.1     Promissory Note in the principal amount of $3,640,000 dated
                March 8, 2000 between the Registrant, as lender, and Echelon
                Residential Holdings LLC, as borrower, is filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1999 as Exhibit 10.1 and is included herein.

       10.2     Pledge Agreement dated March 8, 2000 between Echelon Residential
                Holdings LLC (Pledgor) and American Income Partners V-A Limited
                Partnership, as Agent for itself and the Registrant, is filed in
                the Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1999 as Exhibit 10.2 and is included herein.

       13       The 1999 Annual Report to security holders, a copy of which is
                furnished for the information of the Securities and Exchange
                Commission. Such Report, except for those portions thereof which
                are incorporated herein by reference, is not deemed "filed" with
                the Commission.

       23       Consent of Independent Auditors.

       99(a)    Lease agreement with American Trans Air, Inc. was filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1996 as Exhibit 99 (f) and is incorporated herein
                by reference.

                                       15
<PAGE>

      Exhibit
      Number
      ------

        99(b)   Lease agreement with Southwest Airlines, Inc. was filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1997 as Exhibit 99 (f) and is incorporated herein
                by reference.

        99(c)   Lease agreement with Southwest Airlines, Inc. was filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1997 as Exhibit 99 (g) and is incorporated herein
                by reference.

        99(d)   Lease agreement with Southwest Airlines, Inc. was filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1997 as Exhibit 99 (h) and is incorporated herein
                by reference.

        99(e)   Lease agreement with Finnair OY was filed in the Registrant's
                Annual Report on Form 10-K for the year ended December 31, 1997
                as Exhibit 99 (i) and is incorporated herein by reference.

        99(f)   Lease agreement with Finnair OY was filed in the Registrant's
                Annual Report on Form 10-K for the year ended December 31, 1997
                as Exhibit 99 (j) and is incorporated herein by reference.

        99(g)   Lease agreement with Transmeridian Airlines, Inc. was filed in
                the Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1997 as Exhibit 99 (k) and is incorporated herein
                by reference.

        99(h)   Lease agreement with Classic Airways Limited was filed in the
                Registrant's Annual Report on Form 10-K for the year ended
                December 31, 1998 as Exhibit 99 (k) and is incorporated herein
                by reference.


     (b) Reports on Form 8-K

     None.

                                       16
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.

                  AIRFUND II International Limited Partnership

                   By: AFG Aircraft Management Corporation, a
                       Massachusetts corporation and the General Partner of
                       the Registrant.


By: /s/ Geoffrey A. MacDonald              By: /s/ Gary D. Engle
   ----------------------------               ----------------------------
   Geoffrey A. MacDonald                      Gary D. Engle
   Chairman and a member of the               President and Chief Executive
   Executive Committee of EFG and             Officer and a member of the
   President and a Director of the            Executive Committee of EFG and a
   General Partner                            Director of the General Partner
                                              (Principal Executive Officer)

Date: March 30, 2000                       Date: March 30, 2000
      -------------------------                  -------------------------


By: /s/ Gary M. Romano                     By: /s/ Michael J. Butterfield
   ----------------------------               ----------------------------
   Gary M. Romano                             Michael J. Butterfield
   Executive Vice President and Chief         Senior Vice President, Finance and
   Operating Officer of EFG and Clerk         Treasurer of EFG and Treasurer
   of the General Partner                     of the General Partner
   (Principal Financial Officer)              (Principal Accounting Officer)

Date: March 30, 2000                       Date: March 30, 2000
      -------------------------                  -------------------------

                                       17
<PAGE>

                                  EXHIBIT INDEX
                                 1999 Form 10-K

  Exhibit
  -------

     2.5  Plaintiffs' and Defendants' Joint Memorandum in Support of
          Joint - Motion to Further Modify Order Preliminarily Approving
          Settlement, Conditionally Certifying Settlement Class and
          Providing for Notice of, and Hearing on, the Proposed
          Settlement.

     2.6  Second Modified Order Preliminarily Approving Settlement,
          Conditionally Certifying Settlement Class and Providing for
          Notice of, and Hearing on, the Proposed Settlement (March 5,
          2000).

    10.1  Promissory Note in the principal amount of $3,640,000 dated
          March 8, 2000 between the Registrant, as lender, and Echelon
          Residential Holdings LLC, as borrower.

    10.2  Pledge Agreement dated March 8, 2000 between Echelon
          Residential Holdings LLC (Pledgor) and American Income
          Partners V-A Limited Partnership, as Agent for itself and the
          Registrant.

                                   18