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

                                    FORM 10-Q
[Mark One]

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999

                                       OR

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

                  For the transition period from ____________ to ______________

                           Commission File No. 1-11775

                             AVIATION SALES COMPANY
             (Exact name of registrant as specified in its charter)

           Delaware                                             65-0665658
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                              Identification No.)

       6905 NW 25th Street
         Miami, Florida                                         33122
(Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (305) 592-4055

         Indicate by checkmark 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 report(s), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

         Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 15,005,576 shares
of common stock, $.001 par value per share, were outstanding as of August 10,
1999.
<PAGE>
                    AVIATION SALES COMPANY AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

                                     DECEMBER 31,    JUNE 30,
                                        1998          1999
                                     ----------     --------
                                                   (Unaudited)

       ASSETS

CURRENT ASSETS:
    Cash and cash equivalents          $ 10,536     $ 10,896
    Accounts receivable, net            115,974      154,761
    Inventories                         277,131      354,683
    Deferred income taxes                 5,932        6,814
    Other current assets                 16,416       24,624
                                       --------     --------
              Total current assets      425,989      551,778
                                       --------     --------
EQUIPMENT ON LEASE, net                  28,354       11,055
                                       --------     --------
FIXED ASSETS, net                        69,744       78,329
                                       --------     --------
AMOUNTS DUE FROM RELATED PARTIES          2,204        2,153
                                       --------     --------
OTHER ASSETS:
    Goodwill, net                        56,936       55,294
    Deferred financing costs, net         8,104        8,827
    Other assets                          8,046       13,425
                                       --------     --------
              Total other assets         73,086       77,546
                                       --------     --------
              Total assets             $599,377     $720,861
                                       ========     ========

                                   (Continued)

                                       1
<PAGE>
                    AVIATION SALES COMPANY AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (CONTINUED)
                                                         DECEMBER 31,  JUNE 30,
                                                             1998       1999
                                                         ----------    --------
                                                                     (Unaudited)
     LIABILITIES & STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:
    Accounts payable                                       $ 50,931   $ 58,073
    Accrued expenses                                         26,317     39,491
    Current maturities of notes payable                       4,908      3,640
    Current maturities of capital lease obligations              84         84
    Revolving loan                                          174,007    187,739
                                                           --------   --------
              Total current liabilities                     256,247    289,027
                                                           --------   --------
LONG-TERM LIABILITIES:
    Senior subordinated notes                               164,163    164,208
    Notes payable, net of current portion                    18,881      1,069
    Capital lease obligations, net of current portion         4,133      4,216
    Deferred income                                           1,371      5,330
    Other long-term liabilities                                 284        299
                                                           --------   --------
              Total long-term liabilities                   188,832    175,122
                                                           --------   --------
COMMITMENTS AND CONTINGENCIES, (Note 5)

STOCKHOLDERS' EQUITY:
    Preferred stock, $.01 par value, 1,000,000 shares
        authorized, none outstanding                             --         --
    Common stock, $.001 par value, 30,000,000 shares
        authorized, 12,515,809 and 15,003,050 shares
        outstanding at December 31, 1998 and June 30,
        1999, respectively                                       12         15
    Additional paid-in capital                               64,344    149,334
    Retained earnings                                        89,942    107,363
                                                           --------   --------
              Total stockholders' equity                    154,298    256,712
                                                           --------   --------
              Total liabilities and stockholders' equity   $599,377   $720,861
                                                           ========   ========

The accompanying notes are an integral part of these condensed consolidated
balance sheets.

                                       2
<PAGE>
                    AVIATION SALES COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                 FOR THE THREE MONTHS ENDED     FOR THE SIX MONTHS ENDED
                                                           JUNE 30,                      JUNE 30,
                                                 -------------------------      ------------------------
                                                    1998           1999           1998           1999
                                                  ---------      ---------      ---------      ---------
<S>                                               <C>            <C>            <C>            <C>
OPERATING REVENUES:
  Sales of products, net                          $  88,511      $ 101,662      $ 168,792      $ 210,981
  Services and other                                 20,624         77,627         42,517        146,266
                                                  ---------      ---------      ---------      ---------
                                                    109,135        179,289        211,309        357,247

COST OF SALES AND SERVICES                           80,093        134,986        156,993        271,789
                                                  ---------      ---------      ---------      ---------
GROSS PROFIT                                         29,042         44,303         54,316         85,458

OPERATING EXPENSES                                   15,622         20,902         30,460         41,138
                                                  ---------      ---------      ---------      ---------
INCOME FROM OPERATIONS                               13,420         23,401         23,856         44,320

INTEREST EXPENSE AND OTHER                            4,786          8,423          8,733         17,112
                                                  ---------      ---------      ---------      ---------
INCOME BEFORE INCOME  TAXES, EQUITY INCOME OF
   AFFILIATE AND EXTRAORDINARY ITEM                   8,634         14,978         15,123         27,208

INCOME TAX EXPENSE                                    3,389          5,868          5,877         10,638
                                                  ---------      ---------      ---------      ---------
INCOME BEFORE EQUITY INCOME OF AFFILIATE AND
  EXTRAORDINARY ITEM                                  5,245          9,110          9,246         16,570
EQUITY INCOME OF AFFILIATE                             (356)          (393)          (701)          (851)
                                                  ---------      ---------      ---------      ---------
INCOME BEFORE EXTRAORDINARY ITEM                      5,601          9,503          9,947         17,421
EXTRAORDINARY ITEM, NET OF INCOME TAXES                  --             --            599             --
                                                  ---------      ---------      ---------      ---------
    NET INCOME                                    $   5,601      $   9,503      $   9,348      $  17,421
                                                  =========      =========      =========      =========
BASIC EARNINGS PER SHARE:
Income before extraordinary item                  $    0.45      $    0.73      $    0.80      $    1.35
Extraordinary item, net of income taxes                  --             --           0.04             --
                                                  ---------      ---------      ---------      ---------
Net income                                        $    0.45      $    0.73      $    0.76      $    1.35
                                                  =========      =========      =========      =========
DILUTED EARNINGS PER SHARE:
Income before extraordinary item                  $    0.44      $    0.71      $    0.79      $    1.32
Extraordinary item, net of income taxes                  --             --           0.05             --
                                                  ---------      ---------      ---------      ---------
Net income                                        $    0.44      $    0.71      $    0.74      $    1.32
                                                  =========      =========      =========      =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
                                       3
<PAGE>
                    AVIATION SALES COMPANY AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      FOR THE SIX MONTHS ENDED
                                                                               JUNE 30,
                                                                       ------------------------
                                                                          1998           1999
                                                                       ---------      ---------
<S>                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                         $   9,348      $  17,421
    Adjustments to reconcile net income to net cash
        used in operating activities:
             Depreciation and amortization                                 4,685          8,921
             Proceeds from sale of equipment on lease, net of gain            --          1,088
             Provision for doubtful accounts                                 428            941
             Equity in earnings of affiliate, net of taxes                  (701)          (851)
             Extraordinary item, net of income taxes                         599             --
             Deferred income taxes                                        (1,222)       (39,728)
             Increase in accounts receivable                                   5         (1,165)

             Increase in inventories                                     (33,040)       (78,224)
             Decrease (increase) in other current assets                   1,565         (8,208)
             Increase in other assets                                     (6,475)        (4,722)
             Increase (decrease) in accounts payable                      (5,021)         7,141
             Increase in accrued expenses                                    837         14,334
             Increase in deferred income                                     801          3,959
             Increase in other liabilities                                    --            299
                                                                       ---------      ---------
                  Net cash used in operating activities                  (28,191)       (78,794)
                                                                       ---------      ---------
CASH FLOW FROM INVESTING ACTIVITIES:
    Cash used in acquisitions, net of cash acquired                      (12,564)            --
    Purchases of fixed assets                                             (8,338)       (14,065)
    Purchases of equipment on lease                                      (14,799)            --
    Payments from related parties                                            498             51
                                                                       ---------      ---------
                  Net cash used in investing activities                  (35,203)       (14,014)
                                                                       ---------      ---------
CASH FLOW FROM FINANCING ACTIVITIES:
    Borrowings under senior debt facilities                              186,536        272,850
    Payments under senior debt facilities                               (290,155)      (259,119)
    Payment on equipment loans                                              (411)          (610)
    Payment on notes payable                                                  --         (3,729)
    Proceeds from issuance of senior subordinated notes                  164,002             --
    Proceeds from secondary public offering                                   --         80,318
    Proceeds from equipment loan                                           6,084             --
    Stock options exercised                                                  347          4,678
    Payments on capital leases                                               (31)           (60)
    Payments of deferred financing costs                                  (5,080)        (1,160)
                                                                       ---------      ---------
                  Net cash provided by financing activities               61,292         93,168
                                                                       ---------      ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                      (2,102)           360
                                                                       ---------      ---------
CASH AND CASH EQUIVALENTS, beginning of period                             6,237         10,536
                                                                       ---------      ---------
CASH AND CASH EQUIVALENTS, end of period                               $   4,135      $  10,896
                                                                       =========      =========
SUPPLEMENTAL  DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                                      $   3,955      $  14,365
                                                                       =========      =========
    Income taxes paid                                                  $   8,571      $  14,375
                                                                       =========      =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
                                       4
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION:

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         The accompanying unaudited interim condensed consolidated financial
statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q. Pursuant to such
rules and regulations, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The accompanying unaudited
interim condensed consolidated financial statements should be read in
conjunction with Aviation Sales Company's (the "Company") December 31, 1998
financial statements and the notes thereto included in the Company's Form 10-K,
as amended, (File No. 001-11775).

         In the opinion of management, the accompanying unaudited interim
condensed consolidated financial statements of the Company contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position of the Company as of June 30, 1999 and the
results of its operations for the three and six month periods ended June 30,
1998 and 1999 and its cash flows for the six month periods ended June 30, 1998
and 1999. The results of operations and cash flows for the six month period
ended June 30, 1999 are not necessarily indicative of the results of operations
or cash flows which may be reported for the year ending December 31, 1999.

         The accompanying unaudited interim condensed consolidated financial
statements give retroactive effect to the acquisition of Whitehall Corporation
("Whitehall") which the Company acquired in July 1998. The acquisition of
Whitehall has been accounted for under the pooling of interests method of
accounting. See Note 3 for a further discussion of this transaction.

ACCOUNTING ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

COMPREHENSIVE INCOME

         For all periods presented comprehensive income is equal to net income.

RECENTLY ISSUED ACCOUNTING STANDARDS

         In March 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants ("ACSEC") issued Statement of
Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use". SOP 98-1 establishes criteria for determining
which costs of developing or obtaining internal use computer software should be
charged to expense and which should be capitalized. The Company adopted SOP 98-1
prospectively on January 1, 1999. The adoption of SOP 98-1 did not have a
material effect on the Company's financial position or results of operations.

         In April 1998, the ACSEC issued SOP 98-5, "Reporting on the Costs of
Start-Up Activities". SOP 98-5 establishes standards for the reporting and
disclosure of start-up costs, including organization costs. The Company adopted
SOP 98-5 effective on January 1, 1999. The adoption of SOP 98-5 did not have a
material effect on the Company's financial position or results of operations.

                                       5
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

2.       INVESTMENT IN AFFILIATE:

         During 1994, Whitehall obtained a 40% ownership in a joint venture
involved in the development of aircraft-related technology for an initial
investment of $1. The Company accounts for its investment in the joint venture
under the equity method. In 1994, Whitehall loaned $2,000 to the joint venture,
which is evidenced by a promissory note which accrues interest at a maximum rate
of 5% per annum. Principal and accrued interest became due on January 5, 1999.
Management is evaluating the possibility of extending the note or converting the
note and accrued interest into a capital contribution. The note is secured by
certain assets of the joint venture.

3.       BUSINESS COMBINATIONS:

ACQUISITIONS ACCOUNTED FOR UNDER THE PURCHASE METHOD OF ACCOUNTING:

         In March 1998, the Company completed the acquisition of Caribe
Aviation, Inc. ("Caribe") and Caribe's wholly owned subsidiary Aircraft Interior
Design, Inc. ("AIDI") for $23,300, consisting of $5,000 in cash; $5,000 in
promissory notes payable over two years; the issuance of 182,143 shares of the
Company's common stock; and the repayment of approximately $7,600 of
indebtedness owed by Caribe and AIDI to a financial institution.

         In September 1998, the Company completed the acquisition of Triad
International Maintenance Corporation ("TIMCO") for $63,300 in cash.
Additionally, as a part of the transaction, the Company agreed to guarantee
certain industrial revenue bond financing incurred in connection with the
development of TIMCO's Greensboro operating facilities, in the approximate
amount of $11,700 and the Company has posted an irrevocable letter of credit to
secure its obligations thereunder.

         The Company's acquisitions of Caribe, AIDI and TIMCO have been
accounted for under the purchase method of accounting and accordingly, the
purchase price has been allocated to the assets purchased and liabilities
assumed based upon the fair values at the date of acquisition, and their results
of operations have been included in the accompanying condensed consolidated
financial statements from their respective dates of acquisition.

         The Company's unaudited pro forma condensed consolidated results of
operations for the six months ended June 30, 1998 assuming the Caribe, AIDI and
TIMCO acquisitions had occurred on January 1, 1998 are as follows:

         Revenue                                                  $287,725
         Income before extraordinary item                         $ 10,697
         Net income                                               $ 10,098
         Diluted earnings per share before extraordinary item     $   0.79

         The preliminary purchase price allocations during the six months ended
June 30, 1998 for business combinations accounted for under the purchase method
of accounting were as follows:

         Accounts receivable ...........................     $  4,140
         Inventories ...................................        9,124
         Deposits and other assets .....................          116
         Fixed assets ..................................        3,667
         Goodwill ......................................        9,588
         Accounts payable ..............................       (3,351)
         Notes payable .................................       (5,000)
         Common stock issued ...........................       (5,720)
                                                             --------
         Cash used in acquisitions, net of cash acquired     $ 12,564
                                                             ========
                                        6
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

3.       BUSINESS COMBINATIONS:--(CONTINUED)

ACQUISITIONS ACCOUNTED FOR UNDER THE POOLING OF INTERESTS METHOD OF ACCOUNTING:

         In July 1998, the Company acquired Whitehall for consideration of
2,844,079 shares of the Company's common stock. The acquisition was accounted
for using the pooling of interests method of accounting and thus, the
accompanying condensed consolidated financial statements have been restated to
give retroactive effect for the acquisition for all periods presented.

         The following reflects the results of operations for the six months
ended June 30, 1998 of the Company and of Whitehall, which was acquired in 1998,
for the period before the pooling of interests combination was consummated:

         REVENUE:
            The Company ..................     $173,457
            Whitehall ....................       37,852
                                               --------
                                               $211,309
                                               ========

         Income before extraordinary item:
            The Company ..................     $  9,188
            Whitehall ....................          759
                                               --------
                                               $  9,947
                                               ========
                                        7
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

4.       NOTES PAYABLE AND REVOLVING LOAN:

         In February 1998, the Company sold $165,000 of senior subordinated
notes due in 2008 with a coupon rate of 8.125% at a price of 99.395%. The
proceeds of the sale were used to repay all amounts then outstanding under the
Company's Credit Facility and to fund the cash requirements related to the
acquisition of Caribe and AIDI. The Company wrote off deferred financing costs
of $981 in connection with the repayment of the term loan portion of the Credit
Facility, resulting in an extraordinary item, net of taxes, of $599.

         In September and November of 1998 and May of 1999, the Credit Facility
was amended to increase the revolving loan and letter of credit facility to
$200,000, $250,000 and $300,000, respectively.

         Borrowings under the Credit Facility are secured by a lien on
substantially all of the Company's assets and the borrowing base consists of
substantially all of the Company's receivables and inventory. Interest under the
Credit Facility is, at the option of the Company, (a) prime plus a margin, or
(b) LIBOR plus a margin, where the respective margin determination is made upon
the Company's financial performance over a 12 month period (ranging from 0.0% to
1.0% in the event prime is utilized, or 1.125% to 2.5% in the event LIBOR is
utilized). At June 30, 1999, the margin was 0.75% for prime rate loans and 2.25%
for LIBOR rate loans.

         The Credit Facility contains certain financial covenants regarding the
Company's financial performance and certain other covenants, including
limitations on the amount of annual capital expenditures and the incurrence of
additional debt, and provides for the suspension of borrowing and repayment of
all debt in the event of a material adverse change in the business of the
Company or a change in control. In addition, the Credit Facility requires
mandatory repayments from the proceeds of a sale of assets or an issuance of
equity or debt securities (see Note 6) or as a result of insufficient collateral
to meet the borrowing base requirements thereunder. At June 30, 1999 the Company
was in compliance with its financial covenants. At June 30, 1999, $38,583 was
available for borrowing under the Credit Facility and outstanding letters of
credit aggregated $22,585.

         The senior subordinated notes mature on February 15, 2008. Interest is
payable on February 15 and August 15 of each year, commencing August 15, 1998.
The senior subordinated notes are general unsecured obligations of the Company,
subordinated in right of payment to all existing and future senior debt,
including indebtedness outstanding under the Credit Facility and under
facilities which may replace the credit facility in the future. In addition, the
senior subordinated notes are effectively subordinated to all secured
obligations to the extent of the assets securing such obligations, including the
Credit Facility.
                                       8
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

4.       NOTES PAYABLE AND REVOLVING LOAN--(CONTINUED):

SENIOR SUBORDINATED NOTES

         The indenture pursuant to which the senior subordinated notes have been
issued permits the Company and its subsidiaries to incur substantial additional
indebtedness, including additional senior debt. Under the indenture, the Company
may borrow unlimited additional amounts so long as after incurring such debt it
meets a fixed charge coverage ratio for the most recent four fiscal quarters of
2.0 to 1 until February 15, 2000 and 2.25 to 1 thereafter. At June 30, 1999, the
Company's fixed charge coverage ratio for the last four fiscal quarters was 3.7
to 1. Additionally, the indenture allows the Company to borrow and have
outstanding additional amounts of indebtedness (even if it does not meet the
required fixed charge coverage ratios), up to enumerated limits. The senior
subordinated notes are also effectively subordinated in right of payment to all
existing and future liabilities of any of its subsidiaries which do not
guarantee the senior subordinated notes.

         The senior subordinated notes are fully and unconditionally guaranteed,
on a senior subordinated basis, by substantially all of the Company's existing
subsidiaries and each subsidiary that will be organized in the future by the
Company unless such subsidiary is designated as an unrestricted subsidiary.
Subsidiary guarantees are joint and several, full and unconditional, general
unsecured obligations of the subsidiary guarantors. Subsidiary guarantees are
subordinated in right of payment to all existing and future senior debt of
subsidiary guarantors, including the Credit Facility, and are also effectively
subordinated to all secured obligations of subsidiary guarantors to the extent
of the assets securing their obligations, including the Credit Facility.
Furthermore, the indenture permits subsidiary guarantors to incur additional
indebtedness, including senior debt, subject to certain limitations. The Company
has not presented separate financial statements and other disclosures concerning
each of the subsidiary guarantors because management has determined that such
information is not material to investors.

         The senior subordinated notes are redeemable, at the Company's option,
in whole or in part, at any time after February 15, 2003, at the following
redemption prices, plus accrued and unpaid interest and liquidated damages, if
any, to the redemption date: (i) 2003--104.063%; (ii) 2004--102.708%; (iii)
2005--101.354%; and (iv) 2006 and thereafter--100%. In addition, on or prior to
February 15, 2001, the Company may redeem up to 35% of the aggregate principal
amount of the senior subordinated notes at a redemption price of 108.125% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages, if any, thereon to the redemption date with the net proceeds of a
public offering of common stock of the Company; provided, that at least 65% of
the aggregate principal amount of the senior subordinated notes originally
issued remains outstanding immediately after the occurrence of this redemption.

         Upon the occurrence of a change of control, the Company will be
required to make an offer to repurchase all or any part of each holder's senior
subordinated notes at a repurchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and liquidated damages, if any,
thereon to the repurchase date. There can be no assurance that the Company will
have the financial resources necessary to purchase the senior subordinated notes
upon a change of control or that such repurchase will then be permitted under
the Credit Facility.

         The indenture contains certain covenants that, among other things,
limits the Company's ability and that of its subsidiaries to incur additional
indebtedness and issue preferred stock, pay dividends or make other
distributions, make investments, dispose of assets, issue capital stock of
subsidiaries, create certain liens securing indebtedness, enter into certain
transactions with affiliates, sell assets or enter into certain mergers and
consolidations or sell all or substantially all of the Company's assets.

                                       9
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

4.       NOTES PAYABLE AND REVOLVING LOAN--(CONTINUED):

OTHER LOANS

         The Company has a term loan agreement outstanding in the amount of
$1,259 to finance certain equipment and rotable parts on a long-term lease which
secures the loan. The loan bears interest at a rate of 8.21% and is payable
monthly through August 2002. The loan contains financial and other covenants and
mandatory prepayment events, as defined. At June 30, 1999, the Company was in
compliance with all covenants of the loan.

         In connection with the Company's acquisition of Kratz-Wilde Machine
Company in October 1997, a subsidiary of the Company delivered a
non-interest-bearing promissory note (guaranteed by the Company) to the sellers
in the original principal amount of $2,200. A payment of $1,250 was made during
January 1999 and another payment of $1,250 is due January 1, 2000. Interest on
this note has been imputed at 8%.

         In connection with the acquisition of Caribe and AIDI, a subsidiary of
the Company delivered to the sellers a promissory note in the original principal
amount of $5,000, which was guaranteed by the Company. The note is payable over
a two year period with an interest rate of 8% per annum. The first payment of
$2,500 was made during March 1999.

5.       COMMITMENTS AND CONTINGENCIES:

LITIGATION AND CLAIMS

         On January 8, 1999, Paine Webber Incorporated filed in the Supreme
Court of the State of New York a complaint against the Company and its
subsidiary, Whitehall, alleging breach of contract claims and related claims
against the Company and Whitehall and a tortious interference with a contract
claim against the Company. Paine Webber alleges that it is due a fee in
connection with the Company's acquisition of TIMCO, based upon a 1997 agreement
between Whitehall and Paine Webber relating to a then proposed acquisition of
TIMCO by Whitehall which did not occur. Paine Webber is seeking approximately
$1,000, plus costs and an unstated amount of punitive damages. Paine Webber is
also seeking approximately $250 allegedly due relating to the failure of
Whitehall to honor an alleged right of first refusal provision in the 1997
agreement.

         The Company believes that its acquisition of TIMCO was not within the
scope of the 1997 Paine Webber/Whitehall agreement and that claims brought under
this agreement against the Company and Whitehall are without merit. The Company
is vigorously defending these claims. Although the Company can give no
assurance, based upon the available facts, the Company believes that the
ultimate outcome of this matter will not have a material adverse effect upon its
financial condition.

                                       10
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

5.       COMMITMENTS AND CONTINGENCIES:--(CONTINUED)

         On June 24, 1998, Zantop International Airlines, Inc. filed an action
against Aero Corp.-Macon, Inc., one of the Company's subsidiaries (which is now
part of TIMCO), in the Superior Court of Bibb County, Georgia. The suit seeks an
unspecified amount of damages and certain equitable relief arising out of the
July 1997 sale to Aero Corp.-Macon, Inc. (then a subsidiary of Whitehall) of
certain assets used in connection with the operation of Aero Corp.-Macon, Inc.
The nature of the action involves a contractual dispute relative to certain
purchase price adjustments and inventory purchases. The Company is vigorously
defending this action. Although the Company can give no assurance, based upon
the available facts, the Company believes that the ultimate outcome of this
matter will not have a material adverse effect upon its financial condition.

         The Company is also involved in various lawsuits and other
contingencies arising out of operations in the normal course of business. In the
opinion of management, the ultimate resolution of these claims and lawsuits will
not have a material adverse effect upon the financial position of the Company.

ENVIRONMENTAL MATTERS

         The Company is taking remedial action pursuant to Environmental
Protection Agency and Florida Department of Environmental Protection ("FDEP")
regulations at TIMCO-Lake City. Ongoing testing is being performed and new
information is being gathered to continually assess the impact and magnitude of
the required remediation efforts on the Company. Based upon the most recent cost
estimates provided by environmental consultants, the Company believes that the
total remaining testing, remediation and compliance costs for this facility will
be approximately $2,400. Testing and evaluation for all known sites on
TIMCO-Lake City's property is substantially complete and the Company has
commenced a remediation program. The Company is currently monitoring the
remediation, which will extend into the future. Subsequently, the Company's
accruals were increased because of this monitoring, which indicated a need for
new equipment and additional monitoring. Based on current testing, technology,
environmental law and clean-up experience to date, the Company believes that it
has established an accrual for a reasonable estimate of the costs associated
with its current remediation strategies. To comply with the financial assurances
required by the FDEP, the Company has issued a $1,700 standby letter of credit
in favor of the FDEP.

         Additionally, there are other areas adjacent to TIMCO-Lake City's
facility that could also require remediation. The Company does not believe that
it is responsible for these areas; however, it may be asserted that TIMCO and
other parties are jointly and severally liable and are responsible for the
remediation of those properties. No estimate of any such costs to the Company is
available at this time.

         In connection with the sale of Whitehall's electronics business,
Whitehall was required to perform, at its own expense, an environmental site
assessment at the electronics business' facility. Whitehall was also required to
remedy all recognized environmental conditions identified in the assessment to
bring such facility into compliance with all applicable Federal, State, and
local environmental laws. The buyer of this business, subject to the terms and
conditions set forth in the agreement, recently exercised its option of
requiring Whitehall to repurchase this property for $300.

         Accrued expenses in the accompanying June 30, 1999 condensed
consolidated balance sheet includes $2,720 related to obligations to remediate
the environmental matters described above.

         Future information and developments will require the Company to
continually reassess the expected impact of the environmental matters discussed
above. Actual costs to be incurred in future periods may vary from the
estimates, given the inherent uncertainties in evaluating environmental
exposures. These uncertainties include the extent of required remediation based
on testing and evaluation not yet completed and the varying costs and
effectiveness of remediation methods.

                                       11
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

5.       COMMITMENTS AND CONTINGENCIES:--(CONTINUED)

LEASE FOR NEW FACILITY

         On December 17, 1998, the Company entered into an operating lease for a
new corporate headquarters and warehouse facility with First Security Bank,
National Association, as trustee of a newly created trust, as lessor. The lease
has an initial term of five years and is a triple net lease with annual rent as
provided in the lease. The lease contains financial covenants regarding the
Company's financial performance and other affirmative and negative covenants.
Substantially all of the Company's subsidiaries have guaranteed the Company's
obligations under the lease. Additionally, the Company has an option to acquire
the new facility at the end of the lease for an option price determined in the
lease. Alternatively, if it does not purchase the new facility at the end of the
lease, it will be obligated to pay certain amounts as provided in the lease.

         The development of the new facility has been financed by the trust
through a $35,500 loan facility provided by a syndicate of financial
institutions. Pursuant to the agreements entered into in connection with this
financing, the Company is obligated to develop the new facility on behalf of the
trust and is responsible for the timely completion thereof within an established
construction budget. The Company and substantially all of its subsidiaries have
guaranteed the repayment of $31,200 of the trust's obligations under the loan
agreement. The trust's obligations under these agreements are secured by a lien
on the real property and improvements comprising the new facility and on the
fixtures therein. Further, the Company has posted an irrevocable letter of
credit in favor of the trust in the amount of approximately $8,000 to secure
both its obligations under the lease and the trust's obligations under the loan
agreement.

6.       EQUITY OFFERING:

         On June 16, 1999 the Company closed its public offering of 2,000,000
shares of common stock and on June 24, 1999 the Company's underwriters exercised
their option to purchase an additional 300,000 shares of common stock. The net
proceeds of the offering, $80,318, were used to repay amounts outstanding under
the Credit Facility. See Note 4. The Company also filed a separate registration
statement with respect to the public offering of $85.0 million of the Company's
senior subordinated notes due 2008, but has not to date sold any of these new
notes. The Company intends to continually assess market conditions and may
complete the offering of the notes when the Company determines market conditions
are appropriate. No assurances can be given as to when or if the Company will
complete the offering of its notes.
                                       12
<PAGE>
                     AVIATION SALES COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                                  JUNE 30, 1999
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

7.       EARNINGS PER SHARE:

         The computation of weighted average common and common equivalent shares
used in the calculation of basic and diluted earnings per share is as follows:
<TABLE>
<CAPTION>
                                                              FOR THE THREE MONTHS             FOR THE SIX MONTHS
                                                                  ENDED JUNE 30,                 ENDED JUNE 30,
                                                            -------------------------     -------------------------
                                                              1998           1999           1998           1999
                                                            ----------     ----------     ----------     ----------
<S>                                                         <C>            <C>            <C>            <C>
 Weighted average common shares outstanding
 used in calculating basic earnings per share .........     12,436,201     12,986,877     12,364,989     12,885,375
 Effect of dilutive options ...........................        298,029        352,711        301,265        396,566
                                                            ----------     ----------     ----------     ----------
 Weighted average common and common
 equivalent shares outstanding used in
 calculating diluted earnings per share ...............     12,734,230     13,339,588     12,666,254     13,281,941
                                                            ==========     ==========     ==========     ==========
 Options and warrants outstanding which
 are not included in the calculation of diluted
 earnings per share because their impact
 is antidilutive ......................................         19,500         13,350         19,500         10,000
                                                            ==========     ==========     ==========     ==========
</TABLE>
----------------------------------
For business combinations accounted for as a pooling of interests, earnings per
share computations are based on the aggregate of the weighted-average
outstanding shares of the surviving business for all periods presented.

8.       SUBSEQUENT EVENTS:

         In July 1999, the Company executed a definitive agreement with Kitty
Hawk, Inc. to acquire the assets of Kitty Hawk's airframe and JT8D engine
maintenance operations located in Oscoda, Michigan. Under the terms of the
acquisition agreement, the Company will pay approximately $21.5 million in cash
and other consideration. Consummation of the acquisition is subject to certain
conditions, including the receipt of governmental approvals. The acquisition is
expected to close in the near future.
                                       13
<PAGE>
ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS OR MAY CONTAIN FORWARD-LOOKING
STATEMENTS, SUCH AS STATEMENTS REGARDING THE COMPANY'S GROWTH STRATEGY AND
ANTICIPATED TRENDS IN THE INDUSTRIES AND ECONOMIES IN WHICH THE COMPANY
OPERATES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE COMPANY'S CURRENT
EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS
RELATING TO THE COMPANY'S OPERATIONS AND RESULTS OF OPERATIONS, COMPETITIVE
FACTORS, SHIFTS IN MARKET DEMAND, AND OTHER RISKS AND UNCERTAINTIES, INCLUDING
IN ADDITION TO THOSE DESCRIBED BELOW THOSE DISCLOSED IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, AS AMENDED, FOR THE YEAR ENDED DECEMBER 31, 1998,
UNCERTAINTIES WITH RESPECT TO CHANGES OR DEVELOPMENTS IN SOCIAL, BUSINESS,
ECONOMIC, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES AND CONDITIONS
AND ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING THE
COMPANY'S CONTRACTORS, CUSTOMERS, SUPPLIERS, COMPETITORS, STOCKHOLDERS,
LEGISLATIVE, REGULATORY AND JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES. SHOULD
ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE
UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY
FROM RESULTS EXPRESSED OR IMPLIED IN ANY FORWARD-LOOKING STATEMENTS MADE BY THE
COMPANY IN THIS QUARTERLY REPORT ON FORM 10-Q. THE COMPANY DOES NOT UNDERTAKE
ANY OBLIGATION TO REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE
EVENTS OR CIRCUMSTANCES.

         The following discussion and analysis should be read in conjunction
with the information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's Annual Report on
Form 10-K (the "Form 10-K"), as amended, for the year ended December 31, 1998.

RECENT DEVELOPMENTS

         On June 16, 1999 the Company closed its public offering of 2,000,000
shares of common stock and on June 24, 1999 the Company's underwriters exercised
their option to purchase an additional 300,000 shares of common stock. The net
proceeds of the offering, $80,318, were used to repay amounts outstanding under
the Credit Facility. The Company also filed a separate registration statement
with respect to the public offering of $85.0 million of the Company's senior
subordinated notes due 2008, but has not to date sold any of these new notes.
The Company intends to continually assess market conditions and may complete the
offering of the notes when the Company determines market conditions are
appropriate. No assurances can be given as to when or if the Company will
complete the offering of its notes.

         In July 1999, the Company executed a definitive agreement with Kitty
Hawk, Inc. to acquire the assets of Kitty Hawk's airframe and JT8D engine
maintenance operations located in Oscoda, Michigan. Under the terms of the
acquisition agreement, the Company will pay approximately $21.5 million in cash
and other consideration. Consummation of the acquisition is subject to certain
conditions, including the receipt of governmental approvals. The acquisition is
expected to close in the near future.

RESULTS OF OPERATIONS

         Operating revenues consist primarily of sales of products and service
revenues, net of allowances for returns. Cost of sales and services consists
primarily of product costs, labor, freight charges, commission to outside sales
representatives and an inventory provision for damaged and obsolete products.
Product costs consist of the acquisition cost of the products and any costs
associated with repairs, overhaul or certification.

         The Company's operating results are affected by many factors, including
the timing of orders from large customers, the timing of expenditures to
purchase inventory in anticipation of future sales, the timing of bulk inventory
purchases, the number of airline customers seeking maintenance, repair and
overhaul ("MR&O") services at any time, the Company's ability to fully utilize
its available hangar space dedicated to MR&O operations from period to period,
the timeliness of customer aircraft in arriving for scheduled maintenance and
the mix of available aircraft spare parts contained, at any time, in the
Company's inventory. A large portion of the Company's operating expenses are
relatively fixed. Since the Company typically does not obtain long-term purchase
orders or commitments from its customers, it must anticipate the future volume
of orders based upon the historic purchasing patterns of its customers and upon
its discussions with its customers as to their future requirements.
Cancellations, reductions or delays in orders by a customer or group of
customers could have a material adverse effect on the Company's business,
financial condition and results of operations.

                                       14
<PAGE>
         Operating revenues for the six months ended June 30, 1999 increased
$145.9 million or 69.1% to $357.2 million, from $211.3 million for the same
period in 1998. Operating revenues for the three months ended June 30, 1999
increased $70.2 million or 64.3% to $179.3 million from $109.1 million for the
same period in 1998. Incremental revenues attributable to operations acquired in
1998 and accounted for under the purchase method of accounting was $104.0
million for the six months ended June 30, 1999. Product and service revenues
from period to period also increased due to increased customer penetration,
increased sales from investments in additional inventories and improved capacity
utilization of the Company's MR&O facilities.

         Gross profit increased $31.2 million or 57.3% to $85.5 million for the
six months ended June 30, 1999, compared with $54.3 million for the six months
ended June 30, 1998. Gross profit margin for the six months ended June 30, 1999
decreased to 23.9%, from 25.7% for the same period in 1998. Gross profit
increased $15.3 million or 52.5% to $44.3 million for the 1999 second quarter,
compared with $29.0 million for the 1998 second quarter. Gross profit margin for
the three months ended June 30, 1999 decreased to 24.7%, from 26.6% for the same
period in 1998. Gross profit margins in 1999 were lower than the comparable
periods in 1998 primarily due to a higher percentage of sales derived from the
Company's MR&O operations, which generally operate at lower gross profit margins
than the Company's redistribution operations.

         The Company's operating expenses increased $10.6 million to $41.1
million for the six months ended June 30, 1999 compared with $30.5 million for
the same period in 1998 and increased $5.4 million, to $21.0 million for the
three months ended June 30, 1999 compared with $15.6 million for the same period
in 1998. Operating expenses as a percentage of operating revenues were 11.5% for
the six months ended June 30, 1999, compared to 14.4% for 1998. The improvement
in operating leverage is primarily due to a higher percentage of the Company's
sales being derived from the Company's MR&O operations, which generally operate
at lower operating expense levels than the Company's other operations, and to
economies of scale.

         Interest expense and other, for the six months ended June 30, 1999
increased by $8.4 million from period to period, due to increased borrowings
during 1998 and the first half of 1999 to finance the acquisitions of Caribe,
AIDI and TIMCO, inventory acquisitions and equipment held for lease.

         As a result of the above factors, income before equity income of
affiliate and extraordinary item for the six months ended June 30, 1999 was
$16.6 million, an increase of 79.2% over 1998 income before equity income of
affiliate and extraordinary item of $9.2 million.

         Equity income of affiliate, net of income taxes, increased $150,000 for
the six months ended June 30, 1999 to $851,000, from $701,000 for the same
period in 1998. The increase was due to increased sales of aircraft noise
reduction kits.

         In connection with the repayment of the term and acquisition portions
of the Credit Facility utilizing the proceeds of the Company's Senior
Subordinated Notes due 2008, the Company wrote off, during the first quarter of
1998, $1.0 million of deferred financing costs resulting in an extraordinary
item, net of income taxes, of $0.6 million ($.05 per diluted share).

         After accounting for all of the above factors, net income for the six
months ended June 30, 1999 was $17.4 million ($1.32 per diluted share) compared
to net income of $9.3 million ($0.74 per diluted share) for the six months ended
June 30, 1998. After accounting for all of the above factors, net income for the
three months ended June 30, 1999 was $9.5 million ($0.71 per diluted share)
compared to net income of $5.6 million ($0.44 per diluted share) for the three
months ended June 30, 1998. Weighted average common and common equivalent shares
outstanding (diluted) were 13.3 million during the three months and six months
ended June 30, 1999, compared to 12.7 million for the three months and six
months ended June 30, 1998.

LIQUIDITY AND CAPITAL RESOURCES

         CASH

         Net cash used in operating activities during the six months ended June
30, 1998 and 1999 was $28.2 million and $78.8 million, respectively. Cash used
in investing activities during the six months ended June 30, 1998 and 1999 was
$35.2 million and $14.0 million, respectively. The Company has continued to
invest in spare parts inventories in order to support increased parts sales, and
believes that its present inventory levels should support increased parts sales
without substantial inventory growth over the next six to twelve months. During
the six months ended June 30, 1998 and 1999, the Company financed its operating
and investing activities primarily with its cash flow from financing activities,
amounting to $61.3 million and $93.2 million, respectively.

                                       15
<PAGE>
         CREDIT FACILITY

         On September 18, 1998, the Company entered into a Four Year Senior
Secured Revolving Credit Facility (the "Credit Facility") which provided the
Company with a $200.0 million revolving line of credit, including a $30.0
million letter of credit sublimit, with the imposition of certain borrowing
criteria based on the satisfaction of certain debt ratios. The eligible
borrowing base includes certain receivables and inventories of the Company. The
interest rate on the Credit Facility is, at the option of the Company,
(a) prime plus a margin, or (b) LIBOR plus a margin, where the respective margin
determination is made upon the Company's financial performance over a 12 month
period (ranging from 0.0% to 1.0% in the event prime is utilized, or 1.125% to
2.5% in the event LIBOR is utilized).

         In November 1998 and May 1999, the Credit Facility was further amended
to increase the revolving loan and letter of credit facility to $250.0 and
$300.0 million, respectively. At August 10, 1999, the margin was 0.75% for prime
rate loans and 2.25% for LIBOR rate loans and $208.7 million was outstanding
under the Credit Facility.

         The Credit Facility contains certain financial covenants regarding the
financial performance of the Company and certain other covenants, including
limitations on the amount of annual capital expenditures and the incurrence of
additional debt, and provides for the suspension of the Credit Facility and
repayment of all debt in the event of a material adverse change in the business
or a change in control. In addition, the Credit Facility requires mandatory
repayments from the proceeds of a sale of assets or an issuance of equity or
debt securities or as a result of insufficient collateral to meet the borrowing
base requirements thereunder. Substantially all of the Company's assets are
pledged as collateral for amounts borrowed. The Credit Facility will terminate
on July 31, 2002. At June 30, 1999, the Company was in compliance with all
covenants of the Credit Facility.

         SENIOR SUBORDINATED NOTES

         In February 1998 the Company completed the offering and sale of $165.0
million in senior subordinated notes (the "Notes") due in 2008 with a coupon
rate of 8.125% at a price of 99.395%. The Notes mature on February 15, 2008.
Interest is payable on February 15 and August 15 of each year, commencing August
15, 1998. The Notes are general unsecured obligations of the Company,
subordinated in right of payment to all existing and future senior debt of the
Company, including indebtedness outstanding under the Credit Facility and under
facilities which may replace the Credit Facility in the future. In addition, the
Notes are effectively subordinated to all secured obligations to the extent of
the assets securing such obligations, including the Credit Facility.

         The indenture pursuant to which the Notes have been issued (the
"Indenture") permits the Company and its subsidiaries to incur substantial
additional indebtedness, including senior debt. Under the Indenture, the Company
may borrow unlimited additional amounts so long as after incurring such debt the
Company meets a fixed charge coverage ratio for the most recent four fiscal
quarters of 2.0 to 1 until February 15, 2000 and 2.25 to 1 thereafter. At June
30, 1999, the Company's fixed charge coverage ratio for the last four fiscal
quarters was 3.7 to 1. Additionally, the Indenture allows the Company to borrow
and have outstanding additional amounts of indebtedness (even if the Company
does not meet the required fixed charge coverage ratios), up to enumerated
limits. The Notes are also effectively subordinated in right of payment to all
existing and future liabilities of any subsidiaries of the Company which do not
guarantee the Notes.

         The Notes are unconditionally guaranteed, on a senior subordinated
basis, by substantially all of the Company's existing subsidiaries and each
subsidiary that will be organized in the future by the Company, unless such
subsidiary is designated as an unrestricted subsidiary (the "Subsidiary
Guarantors"). Subsidiary Guarantees are joint and several, full and
unconditional, general unsecured obligations of the Subsidiary Guarantors.
Subsidiary Guarantees are subordinated in right of payment to all existing and
future senior debt of Subsidiary Guarantors, including the Credit Facility, and
are also effectively subordinated to all secured obligations of Subsidiary
Guarantors to the extent of the assets securing such obligations, including the
Credit Facility. Furthermore, the Indenture permits Subsidiary Guarantors to
incur additional indebtedness, including senior debt, subject to certain
limitations.

         The Notes are redeemable, at the option of the Company, in whole or in
part, at any time after February 15, 2003, at the following redemption prices,
plus accrued and unpaid interest and liquidated damages, if any, to the
redemption date: (i) 2003--104.063%; (ii) 2004--102.708%; (iii) 2005--101.354%;
and (iv) 2006 and thereafter--100%. In addition, on or prior to February 15,
2001, the Company may redeem up to 35% of the aggregate principal amount of the
Notes at a redemption price of 108.125% of the principal amount thereof, plus
accrued and unpaid interest and liquidated damages, if any, thereon to the
redemption date with the net proceeds of a public offering of common stock of
the Company; provided, that at least 65% of the aggregate principal amount of
the Notes originally issued remains outstanding immediately after the occurrence
of such redemption.
                                       16
<PAGE>
         Upon the occurrence of a change of control, the Company will be
required to make an offer to repurchase all or any part of holder's Notes at a
repurchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest and liquidated damages, if any, thereon to the repurchase date.
There can be no assurance that the Company will have the financial resources
necessary to purchase the Notes upon a change of control or that such repurchase
will be permitted under the Credit Facility.

         The Indenture contains certain covenants that, among other things, will
limit the ability of the Company and its subsidiaries to incur additional
indebtedness and issue preferred stock, pay dividends or make other
distributions, make investments, dispose of assets, issue capital stock of
subsidiaries, create certain liens securing indebtedness, enter into certain
transactions with affiliates, sell assets or enter into certain mergers and
consolidations or sell all or substantially all of their assets.

         OTHER NOTES

         The Company has a term loan agreement in the amount of $1,259,000 to
finance certain equipment and rotable parts on a long-term lease which secures
the loan. The loan bears interest at a rate of 8.21% and is payable monthly
through August 2002. The loan contains financial and other covenants and
mandatory prepayment events, as defined. At June 30, 1999, the Company was in
compliance with all covenants of the loan.

         In connection with the acquisition of Kratz-Wilde, a subsidiary of the
Company delivered a non-interest-bearing promissory note (guaranteed by the
Company) to the sellers in the original principal amount of $2.2 million. A
payment of $1,250,000 was made during January 1999 and another payment of
$1,250,000 is due January 1, 2000. Interest on this note has been imputed at 8%.

         In connection with the acquisition of Caribe and AIDI, a subsidiary of
the Company delivered to the sellers a promissory note in the original principal
amount of $5.0 million, which was guaranteed by the Company. The note is payable
over a two year period with an interest rate of 8% per annum. The first payment
of $2.5 million was made during March 1999.

         CAPITAL EXPENDITURES

         During the six month periods ended June 30, 1998 and 1999, the Company
incurred capital expenditures of approximately $8.3 million and $14.1 million,
respectively, primarily to renovate MR&O facilities and to make enhancements to
the Company's management information systems. The Company expects to incur
capital expenditures of approximately $27.4 million for 1999 for new equipment
for manufacturing operations, fixtures for its new corporate headquarters, new
MIS systems and enhancements to existing MIS systems, as well as ordinary course
replacement of existing equipment.

         LEASE FOR NEW FACILITY

         In 1998, the Company decided to move to a new corporate headquarters
and warehouse facility. On December 17, 1998, the Company entered into an
operating lease for a new corporate headquarters and warehouse facility with
First Security Bank, National Association, as trustee of a newly created trust,
as lessor. The lease has an initial term of five years and is a triple net
lease. The lease contains financial covenants regarding the Company's financial
performance and other affirmative and negative covenants. Substantially all of
the Company's subsidiaries have guaranteed the Company's obligations under the
lease. Additionally, the Company has an option to acquire the new facility at
the end of the lease and if it does not purchase the new facility at the end of
the lease, it will be obligated to pay a fee.

         The lessor has financed the development of the new facility through a
$35.5 million loan from a syndicate of financial institutions. The Company is
obligated to develop the new facility on behalf of the lessor and is responsible
for the timely completion of the facility within an established construction
budget. The Company and substantially all of its subsidiaries have guaranteed
the repayment of $31.2 million of the lessor's obligations under its loan
agreement. The lessor's obligations under the agreement are secured by a lien on
the real property and on the new facility. Further, the Company has posted an
irrevocable letter of credit in favor of the lessor in the amount of
approximately $8.0 million to secure both the Company's obligations under the
lease and the lessor's obligations under the loan agreement.

         LIQUIDITY

         As part of its growth strategy, the Company intends to continue to
pursue growth through internal expansion as well as acquisitions of other
businesses. Financing for such activities will be provided from operations and
from borrowings under the Credit Facility. The Company believes that its
available capital resources should be sufficient to satisfy the Company's
anticipated working capital requirements over the next twelve months.

                                       17

<PAGE>
         ENVIRONMENTAL

         Except as described below, the Company believes that its properties are
in compliance in all material respects with applicable environmental laws.
Unidentified environmental liabilities could arise, however, and could
materially affect the Company's business, financial condition, or results of
operations. Federal, state and local laws and regulations relating to the
protection of the environment may require a current or previous owner or
operator of real estate to investigate and clean up hazardous or toxic
substances or petroleum product releases on a property. The owner or operator
may have to pay a governmental entity or third parties for property damage and
for investigation and clean-up costs incurred by these parties in connection
with the contamination. These laws typically impose clean-up responsibility and
liability without regard to whether the owner or operator knew of or caused the
presence of the contaminants. Even if more than one person may have been
responsible for the contamination, each person covered by applicable
environmental laws may be held responsible for all of the clean-up costs
incurred. In addition, third parties may sue the owner or operator of a site for
damages and costs resulting from environmental contamination emanating from that
site.

         Due to the presence of soil and groundwater contamination at the
Company's facility in Lake City, Florida, the Company is taking remedial action
pursuant to regulations of Environmental Protection Agency ("EPA") and Florida
Department of Environmental Protection ("FDEP") and a post-closure permit issued
by FDEP. The Company is in the process of renewing the FDEP post-closure permit,
and recently filed a renewal application. The Company expects the renewal
application to be approved and does not expect FDEP, in connection with its
review, to impose additional remediation obligations.

         The Company has substantially completed testing and evaluation for all
known sites on the property in Lake City, and has commenced a remediation
program. The Company is conducting ongoing testing and gathering new information
to continually assess the impact and magnitude of the required remediation
efforts. Based upon the most recent cost estimates provided by environmental
consultants, the Company believes that the total remaining testing, remediation
and compliance costs for this facility will be approximately $2.4 million. This
amount is based on current testing, technology, environmental law and clean-up
experience to date. The Company will continue to monitor the remediation which
will extend into the future. To comply with the financial assurances required by
the FDEP, the Company issued a $1.7 million standby letter of credit in favor of
the FDEP in 1999. The Company also provided evidence of self-insurance in the
amount of $8.0 million to the FDEP for potential third-party liability.

         Additionally, there are other areas adjacent to the facility in Lake
City which the Company does not own that could also require remediation. While
the Company does not believe that it is responsible for these areas, it may be
asserted that TIMCO and other parties are jointly and severally liable and are
responsible for the remediation of those properties. As explained above, under
applicable environmental laws it is possible that the Company could be held
responsible for all or part of the damages or clean-up costs associated with the
areas adjacent to the Lake City facility. The Company has no estimate of any
such potential costs at this time.

         In connection with the sale of Whitehall's electronics business,
Whitehall was required to perform, at its own expense, an environmental site
assessment at the electronics business' facility. Whitehall was also required to
remedy all recognized environmental conditions identified in the assessment to
bring the facility into compliance with all applicable federal, state and local
environmental laws. The buyer of this business, subject to the terms and
conditions set forth in the agreement, recently exercised its option to require
Whitehall to repurchase this property for $300,000.

         The Company accrued $3.4 million in 1997 towards potential obligations
to remediate the environmental matters described above of which $2.7 million of
that reserve presently remains.

         Future information and developments will require the Company to
continually reassess the expected impact of the environmental matters discussed
above. Other than as described above, the Company is not aware of any
environmental condition which the Company believes would have a material adverse
effect on its condition or results of operations. Nevertheless, it is possible
that there are environmental liabilities of which the Company is unaware.
Moreover, no assurances can be given that (i) future laws, ordinances or
regulations will not impose any material environmental liability or (ii) the
current environmental condition of the Company's properties have not been or
will not be affected by tenants and occupants of the properties, by the
condition of properties in the vicinity of the properties or by unrelated third
parties. As a result, actual costs incurred in future periods may vary from the
estimate, given the inherent uncertainties in evaluating environmental
exposures. The uncertainties include the extent to required remediation based on
testing and evaluation not yet completed and the varying costs and effectiveness
of remediation methods.

IMPACT OF THE YEAR 2000

         Since the fourth quarter of 1997, the Company has been implementing new
management information systems ("MIS") in order to both allow the computer
systems to meet the Company's needs into the foreseeable future and to mitigate
the Year 2000 issues inherent in the existing systems.

         The Year 2000 issue is the potential for system and processing failures
of date-related data and the result of computer-controlled systems using two
digits rather than four to define the applicable year. The Company may be
affected by Year 2000 issues in its non-compliant information technology ("IT")
systems or non-IT systems, as well as by Year 2000 issues related to
non-compliant IT and non-IT systems operated by third parties.

                                       18
<PAGE>
         STATE OF READINESS

         The Company has substantially completed an assessment of internal and
external (third-party) IT systems and non-IT systems. At this point in the
assessment, which the Company believes is approximately 95% complete (in the
aggregate), other than as described in this report, the Company is not currently
aware of any Year 2000 problems relating to systems or the systems operated by
third parties which would materially adversely affect the Company's business,
results of operations or financial condition, without taking into account
efforts to avoid such problems, although there can be no assurances of this
fact. In addition, the Company believes the year 2000 remediation and validation
are approximately 81% and 50% complete (in the aggregate), respectively.

         The Company's IT systems consist of software licensed from third
parties and hardware purchased or leased from third parties. The Company is
currently implementing new systems, which are primarily designed to service the
redistribution operations and manufacturing operations, including new software
and hardware, which the Company believes, once fully implemented, will be Year
2000 compliant and will meet the requirements of these operations into the
foreseeable future.

         The Company has determined that the MIS system which is currently used
in the redistribution operations is not Year 2000 compliant. In order to give
the Company the time to implement new systems for these operations in an orderly
fashion, the Company engaged a vendor to remediate the existing system to make
it Year 2000 compliant. The Company believes that the remediation to the
existing system will be completed by the end of August 1999 at an estimated cost
of $1.0 million, and that the remediated system can be validated, as modified,
for Year 2000 compliance by the beginning of the fourth quarter of 1999. While
the Company has been informed by the vendor that the existing system can be
brought into Year 2000 compliance on a timely basis, there can be no assurance
of this fact.

         The Company has substantially remediated the MIS systems used by the
manufacturing operations for Year 2000 compliance and has also substantially
remediated the MIS systems used by the maintenance and repair operations for
Year 2000 compliance.

         The Company has substantially completed an assessment of the Year 2000
issues of the non-IT systems which have been identified as containing embedded
chip systems. The Company is not currently aware of any Year 2000 problems
relating to these systems which would materially adversely affect the Company's
business, results of operations, or financial condition, without taking into
account efforts to avoid these problems.

         The Company is reviewing the efforts of vendors and customers to become
Year 2000 compliant. Letters and questionnaires have been or are in the process
of being sent to all critical entities with which the Company does business to
assess their Year 2000 readiness. To date, the Company has received responses
from approximately 61% of these third parties, and approximately 72% of the
companies that have responded have assured the Company that they have already
addressed, or that they will address on a timely basis, all of their known
significant Year 2000 issues. Although this review is continuing, the Company is
not currently aware of any vendor or customer circumstances that may materially
adversely impact the Company. The Company will seek alternate suppliers if
circumstances warrant. The Company cannot make assurances that Year 2000
compliance plans of vendors and customers will be completed on a timely manner.

         A substantial majority of the aircraft spare parts in inventory do not
have date-sensitive technologies and, as a result, do not pose Year 2000
compliance issues. For the small portion of aircraft spare parts inventory that
may pose Year 2000 compliance issues, the Company has contacted vendors to
assess the Year 2000 compliance of those parts. The Company believes that issues
relating to the Year 2000 compliance of aircraft spare parts in inventory, if
any, will ultimately be the responsibility of the manufacturers of such parts,
although no assurances can be made of this fact. Further, it is unclear whether
the Company's product liability insurance would ultimately cover a claim based
upon a Year 2000 problem in a part sold.

         COSTS

         The Company believes that the cost of the new MIS system (1) for the
redistribution operations will be approximately $13.5 million, of which
approximately $8.6 million has been spent to date and approximately $4.9 million
of which the Company believes will be expended during 1999 and (2) for the
manufacturing operations will be approximately $2.1 million, all of which has
been spent to date. The costs incurred to date in connection with the
remediation of maintenance and repair operations for Year 2000 compliance have
not been material. The Company is funding the costs of new systems from the
existing credit facility. The $10.7 million spent to date has related
substantially to the cost of the new systems and not to bringing the existing
MIS systems into Year 2000 compliance. The Company intended to replace these
systems to meet future needs and to incur the costs regardless of the Year 2000
compliance efforts. Such cost estimates include both hardware and software
costs, as well as the anticipated costs of the use of consultant services, but
do not include internal costs associated with such efforts, which are not
separately tracked for Year 2000 compliance efforts. Such internal costs
principally consists of the payroll costs for employees working on such
compliance efforts.
                                       19
<PAGE>
         The Company has decided to update the MIS system currently used in the
redistribution operations to make it Year 2000 compliant, so that such system
remains available for use in operations until the new system for these
operations becomes fully operational. The Company expects the cost of such
update to be approximately $1.0 million. The Company can not recover this cost
in connection with the development and implementation of the new system.

         RISKS RELATING TO FAILURE TO BECOME YEAR 2000 COMPLIANT

         The Company's failure to bring existing systems into Year 2000
compliance by the end of 1999 would likely materially adversely affect the
Company, in that it would make it very difficult to conduct business in the
ordinary course and would likely cause loss of revenues, increased operating
costs and business interruptions of a material nature (which would likely not be
covered by existing business interruption insurance) until the systems were
fixed. In addition, no assurances can be made that the Year 2000 issues of other
entities will not materially adversely impact the systems or results of
operations.

         CONTINGENCY PLANS

         The Company is currently considering what the contingency plans will be
in the event that the Company is not able to bring the IT and non-IT systems
into Year 2000 compliance by the end of 1999. The Company has substantially
completed its contingency plans and anticipates it will complete them by the end
of September 1999.
                                       20
<PAGE>
                           PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

         See Note 5 to the Company's Unaudited Condensed Consolidated Financial
         Statements included in this filing.

Item 2.  CHANGES IN SECURITIES

         Not applicable

Item 3.  DEFAULTS UPON SENIOR SECURITIES

         None

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

         No matters were submitted to the Company's shareholders during the
         second quarter of 1999.

Item 5.  OTHER INFORMATION

         On June 25, 1999, George F. Baker and Jeffrey N. Greenblatt resigned
         from the Company's Board of Directors.

Item 6.  EXHIBITS AND REPORTS ON FORMS 8-K

(a)      EXHIBITS

         EXHIBIT NO. DESCRIPTION

         10.01    Special Incentive Compensation Plan

         10.02    Amendment No. 7, Waiver and Consent dated as of June 30, 1999,
                  to the Third Amended and Restated Credit Agreement

         27       Financial Data Schedule

(b)      REPORTS ON FORM 8-K

         Current Report on Form 8-K filed on May 20, 1999.

                                       21
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                             AVIATION SALES COMPANY
Dated: August 13, 1999
                             BY: /s/ GARLAN BRAITHWAITE
                                 ----------------------
                                     Garlan Braithwaite, Vice President-Finance
                                    (Principal Accounting Officer)

                                       22
<PAGE>
                                 EXHIBIT INDEX

EXHIBIT         DESCRIPTION
-------         -----------
10.01           Special Incentive Compensation Plan

10.02           Amendment No. 7, Waiver and Consent dated as of June 30, 1999,
                to the Third Amended and Restated Credit Agreement

27              Financial Data Schedule