================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                       FOR THE PERIOD ENDED MARCH 31, 1999

                             Commission File 0-20889

                                  AVTEAM, INC.
             (Exact name of Registrant as specified in its charter)

                    FLORIDA                                    65-0313187
           (State or other jurisdiction of                  (I.R.S. Employer
           incorporation or organization)                  Identification No.)

            3230 Executive Way                                    33025
              Miramar, Florida                                 (Zip Code)
      (Address of principal executive offices)

       Registrant's telephone number, including area code: (954) 431-2359

       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 ____

       Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

       As of May 17, 1999, 11,015,739 shares of Class A Common Stock, par value
$.01 per share, of the Registrant were outstanding and 439,544 shares of Class B
Common Stock, par value $.01 per share, of the Registrant were outstanding.

================================================================================

<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                           PAGE
PART I - FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements.....................1-6

          Condensed Consolidated Balance Sheets 
          as of March 31, 1999 and December 31, 1998....................... 1

          Condensed Consolidated Statements of Income 
          for the Three Months Ended
          March 31, 1999 and 1998.......................................... 2

          Condensed Consolidated Statements of Cash Flows 
          for the Three Months Ended
          March 31, 1999 and 1998.......................................... 3

          Notes to Condensed Consolidated Financial Statements.............4-8

Item 2.   Management's Discussion and Analysis Of Financial Condition 
          and Results of Operations........................................8-11

PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K.................................11

SIGNATURES        .........................................................12

EXHIBIT INDEX..............................................................13

<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.
<TABLE>
<CAPTION>

                                                                   MARCH 31,    DECEMBER 31,
                                                                     1999          1998
                                                                  ---------      ---------
ASSETS                                                           (UNAUDITED)
<S>                                                               <C>            <C>      
Current assets:
       Cash and cash equivalents..................................$     729      $   1,745
       Trade accounts receivable, net ............................   18,448         12,823
       Inventory .................................................   84,181         84,057
       Prepaid expenses ..........................................    1,304          1,382
       Deposits ..................................................      806            935
       Deferred tax asset ........................................      195            427
                                                                  ---------      ---------

Total current assets .............................................  105,663        101,369

Revenue producing equipment, at cost .............................   11,007          9,284
       Accumulated depreciation ..................................     (931)          (705)
                                                                  ---------      ---------
                                                                     10,076          8,579
Property and equipment, at cost ..................................    6,121          5,602
       Accumulated depreciation ..................................   (1,461)        (1,169)
                                                                  ---------      ---------
                                                                      4,660          4,433

Goodwill, net ....................................................   26,631         26,739

Other assets .....................................................      670            694
                                                                  ---------      ---------
         Total assets ............................................$ 147,700      $ 141,814
                                                                  =========      =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
       Notes payable to bank .....................................$  64,450      $  60,800
       Accounts payable ..........................................   14,168         12,280
       Accrued expenses ..........................................    2,332          3,016
       Customer deposits .........................................    1,604          2,513
       Current portion of notes payable-lease financing ..........      309            318
       Current portion of capital lease obligations ..............       98            106
                                                                  ---------      ---------

Total current liabilities ........................................   82,961         79,033

Capital lease obligations, net of current portion ................       73             81
Notes payable - lease financing ..................................    3,290          3,348

Commitments and contingencies

Shareholders' equity:
       Preferred stock, $.01 par value, 
             20,000,000 shares authorized, no shares
             issued or outstanding ...............................       --             --
       Class A Common Stock, $.01 par value, 
             77,000,000 shares authorized,
             11,015,739 shares issued and 
             outstanding .........................................      110            110
       Class B Common Stock, $.01 par value, 
             3,000,000 shares authorized, 439,644
             shares issued and outstanding .......................        4              4
       Additional paid-in capital ................................   49,177         49,177
       Retained earnings .........................................   12,085         10,061
                                                                  ---------      ---------

            Total shareholders' equity ...........................   61,376         59,352
                                                                  ---------      ---------

            Total liabilities and shareholders' equity ...........$ 147,700      $ 141,814
                                                                  =========      =========
</TABLE>

            SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 1


<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                             MARCH 31,
                                                                 -----------------------------
                                                                     1999                1998
                                                                 ------------     ------------
                                                                          (UNAUDITED)
<S>                                                              <C>              <C>         
Net sales ..................................................     $     29,292     $     13,117
Cost of sales ..............................................           20,640            9,232
                                                                 ------------     ------------
Gross profit ...............................................            8,652            3,885
Operating expenses .........................................            4,078            1,689
                                                                 ------------     ------------
Income from operations .....................................            4,574            2,196
Interest expense, net ......................................            1,381               50
                                                                 ------------     ------------
Income before provision (credit) for income taxes ..........            3,193            2,146
Provision (credit) for income taxes:
         Current ...........................................              937              816
         Deferred ..........................................              232              (22)
                                                                 ------------     ------------
                                                                        1,169              794
                                                                 ------------     ------------
Net income .................................................     $      2,024     $      1,352
                                                                 ============     ============

Net income per common share - basic ........................     $       0.18     $       0.12
                                                                 ============     ============

Weighted average number of common shares outstanding - basic       11,455,383       11,105,383
                                                                 ============     ============

Net income per common equivalent share - diluted ...........     $       0.18     $       0.12
                                                                 ============     ============

Weighted average number of
  common equivalent shares outstanding - diluted ...........       11,462,191       11,135,631
                                                                 ============     ============
</TABLE>

            SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 2


<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                   THREE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                  ----------------------
                                                                                    1999          1998
                                                                                  --------      --------
                                                                                        (UNAUDITED)
<S>                                                                               <C>           <C>     
OPERATING ACTIVITIES
Net income ..................................................................     $  2,024      $  1,352
Adjustments to reconcile net income to net cash used in
     operating activities:
          Depreciation and amortization .....................................          742           352
          Bad debt expense ..................................................           23            47
          Deferred tax expense (credit) .....................................          232           (22)
          Changes in operating assets and liabilities:
                 Trade accounts receivable ..................................       (5,648)       (2,407)
                 Inventory ..................................................         (124)      (14,853)
                 Prepaid expenses and deposits ..............................          207        (6,444)
                 Other assets ...............................................           24           239
                 Accounts payable ...........................................        1,888         6,264
                 Accrued expenses/customer deposits .........................       (1,593)        2,866
                                                                                  --------      --------
                          Net cash used in operating activities .............       (2,225)      (12,606)
                                                                                  --------      --------
INVESTING ACTIVITIES
Purchases of revenue producing equipment ....................................       (1,723)       (4,985)
Purchases of property and equipment .........................................         (519)         (240)
Additional investment in M&M Aircraft Services, Inc. ........................         (116)           --
                                                                                  --------      --------
                          Net cash used in investing activities .............       (2,358)       (5,225)
                                                                                  --------      --------
FINANCING ACTIVITIES
Payments on capital leases ..................................................          (16)          (31)
Net payments on notes payable ...............................................          (67)          (12)
Net proceeds from short-term line of credit .................................        3,650            --
                                                                                  --------      --------
                         Net cash (used in) provided by financing activities         3,567           (43)
                                                                                  --------      --------
                         Net decrease in cash and cash equivalents ..........       (1,016)      (17,874)
                         Cash and cash equivalents at beginning of period ...        1,745        18,676
                                                                                  --------      --------
                         Cash and cash equivalents at end of year ...........     $    729      $    802
                                                                                  ========      ========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid ...............................................................     $  1,246      $     50
                                                                                  ========      ========
Income taxes paid ...........................................................     $    100      $     31
                                                                                  ========      ========
</TABLE>

            SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 3
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 March 31, 1999

1.  GENERAL

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three-month periods
ended March 31, 1999, are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999. For further information, refer to
the financial statements and footnotes thereto included in the Company's 1998
Annual Report on Form 10-K for the year ended December 31, 1998.

         The Company has in the past and may in the future experience
substantial fluctuations in its results of operations as a result of seasonal
effects. The Company believes that demand for aircraft engines, engine parts and
airframe components ("Engines and Components") is seasonal, with increased
demand during the summer months. This seasonality exists because aircraft engine
performance is directly related to ambient temperature (as temperatures rise it
is more difficult for aircraft engines to perform properly). As a result,
certain aircraft are removed from service during the summer months due to the
failure of those particular aircraft engines to comply with certain exhaust gas
temperature limitations. Aircraft engines of the same type and model can have
different performance capabilities. The summer months also include peak travel
periods during which aircraft utilization levels are high. In addition, the
timing of whole aircraft engine sales, at greater unit purchase prices than the
installed parts and components, may cause significant fluctuations in the
Company's quarterly results of operations.

2.  BUSINESS

         AVTEAM, Inc. was incorporated in Florida in 1991 and is a global
supplier of aftermarket aircraft engines, engine parts and airframe components.
AVTEAM, Inc. supplies its products to other aftermarket suppliers, independent
repair facilities, aircraft operators and original equipment manufacturers.
Beginning in April 1997, AVTEAM, Inc., throug its wholly owned subsidiary,
AVTEAM Aviation Field Services, Inc. ("AAFS"), began providing certain on-wing
maintenance and repair and borescope services. On December 15, 1998, AVTEAM,
Inc., through its wholly owned subsidiary, AVTEAM Engine Repair Corp., a Florida
corporation, completed its acquisition (the "Acquisition") of substantially all
of the assets and the assumption of certain liabilities of M&M Aircraft
Services, Inc., a Florida corporation, an FAA licensed aircraft engine
maintenance, repair and overhaul facility. The accompanying consolidated
financial statements as of March 31, 1999 and for the year then ended include
the accounts of AVTEAM, Inc., AVTEAM Engine Repair Corp. ("M&M") and AAFS,
collectively (the "Company") after elimination of intercompany accounts and
transactions.



3.  SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

         The Company classifies as cash equivalents all highly liquid
investments with a maturity of three months or less at the time of purchase.

INVENTORY

         Inventory of aircraft engines is stated at the lower of specific cost
(including overhaul costs) or market. Initially, cost of sales of engine parts
from disassembled engines are recognized based on margins realized from recently
sold, similar groups of engine parts. Once the remaining parts have been fully
inspected and their condition has been determined, the cost of subsequent sales
of engine parts from that engine are determined using the relationship of the
remaining costs of that engine to estimated sales. Cost of sales for individual
parts purchased for resale are reflected based on the specific identification
method. Cost of sales of airframe components are recognized using margins based
on the relationship of cost to revenue estimates as determined by the Company
through the analysis of the market price of such airframe components.

         M&M's inventories are valued at the lower of cost or market, based on
the specific identification method and by the first-in, first-out method. Parts
received as a result of a customer exchange are valued at the lower of cost or
market based on the relationship of the historical cost of similar parts and
estimated sales price.

                                     Page 4


<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- (CONTINUED)

         Inventory consists of the following:
<TABLE>
<CAPTION>
                 IN THOUSANDS                                     AS OF           
                                                     ----------------------------------
                                                     MARCH 31, 1999   DECEMBER 31, 1998
                                                     --------------   -----------------
                 <S>                                       <C>             <C>      
                 Parts and Whole Engines & Aircraft        $80,830       $  79,897
                 Work in Process                             3,173           3,924
                 Other                                         178             236
                                                         ---------       --------- 
                                                         $  84,181       $  84,057
                                                         =========       ========= 
</TABLE>

REVENUE RECOGNITION

         Revenues from the sale of engine parts and airframe components are
recognized when shipped.

         Revenues from the sale of aircraft engines are recognized when title
and risk of ownership are transferred to the customer, which generally is upon
shipment or customer pick-up. In certain instances prior to shipment or customer
pick-up, certain customers request the Company to hold aircraft engines until
the customer determines the most economical means of taking possession. The
Company records revenues under such circumstances only if: (1) payment is
received or is receivable within 30 days; (2) title and risk of ownership is
transferred to the customer; (3) the customer's request that the transaction be
on a bill-and-hold basis is in writing; (4) there is a fixed schedule for
delivery of the engines that is within 30 days of the sale; (5) the Company does
not have any specific performance obligations; (6) the engines are segregated
from other engines and are not subject to being used to meet other customer's
needs and (7) the engines are ready for shipment.

         Revenues from engine overhaul and repair services are recognized at the
time of performance test acceptance of engines and completion of services.

WARRANTIES AND PRODUCT RETURNS

         The Company, other than for services performed by M&M, does not provide
service warranties in addition to those provided by overhaul facilities and as a
result does not record accruals for warranties. The Company has established
programs which, under specific conditions, enable its customers to return
inventory. The effect of these returns is estimated based on a percentage of
sales and historical experience and sales are recorded net of a provision for
estimated returns. M&M's warranty costs are accrued based on management's
estimates of such costs and historical sales percentages.

ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE

         The Company buys inventory from certain of its customers and
periodically offsets amounts owed to customers for inventory purchases against
the accounts receivable for sales to such customers. For the three months ended
March 31, 1999, accounts payable totaling approximately $430,000, were offset
against accounts receivable.

PROPERTY AND EQUIPMENT

         Property and equipment (including assets under capital leases) is
carried at cost and is depreciated using accelerated and straight-line methods
over the lesser of the lease terms or the estimated useful lives of the assets.
The lives used are as follows:

         Office furniture and equipment............          3-7   years
         Warehouse and transport equipment.........          5-7   years
         Leasehold improvements....................          3-10  years


                                     Page 5


<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE PRODUCING EQUIPMENT

         Revenue producing equipment is comprised of engines and aircraft leased
to users on a short-term basis. Such engines and aircraft are carried at cost
and are depreciated using the straight-line method over periods between five and
ten years. Four of such engines are the subject of a sale/leaseback arrangement.
The proceeds under the arrangement are recorded as a financing obligation and
will be reduced by payments under the lease over its five-year term. The lease
agreement provides the Company with an option to terminate the lease and to
repurchase the engines at any time after one year at varying rates based on the
original sales price.

LONG-LIVED ASSETS

         The Company accounts for long-lived assets pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 121, "ACCOUNTING FOR THE IMPAIRMENT
OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF", which
requires impairment losses to be recorded on long-lived assets used in
operations when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Management reviews long-lived assets
and the related intangible assets for impairment whenever events or changes in
circumstances indicate the assets may be impaired.

GOODWILL

         Goodwill represents the excess of the purchase price over the fair
value of assets acquired and is amortized on the straight-line basis over 30
years. The carrying value of goodwill is reviewed if facts and circumstances
suggest that it may be impaired. If this review indicates that goodwill will not
be recoverable, the carrying value will be adjusted accordingly. At March 31,
1999, accumulated amortization of goodwill was approximately $261,000.
 
CONCENTRATION OF CREDIT RISK

         Accounts receivable are primarily from domestic and foreign passenger
airlines, freight and package carriers, charter airlines, aircraft leasing
companies and service providers to such companies. The Company performs ongoing
evaluations of its trade accounts receivable customers, monitors its exposure
for credit losses and sales returns and does not require collateral.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

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

NET INCOME PER COMMON SHARE

         The following table sets forth the computation of basic and diluted net
income and net income per share:
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED MARCH 31,
                                                                           1999            1998
                                                                        -----------     -----------
<S>                                                                     <C>             <C>        
Numerator:
       Net income ...........................................           $ 2,024,000     $ 1,352,000
                                                                        ===========     ===========
Denominator:
        Denominator for basic net income per share - weighted
            average shares                                               11,455,383      11,105,383
Effect of dilutive securities
        Employee stock options ..............................                 6,808          30,248
                                                                        -----------     -----------
Dilutive potential common shares ............................                 6,808          30,248
                                                                        -----------     -----------
        Denominator for diluted earnings per share - adjusted
            weighted - average shares and assumed conversions            11,462,191      11,135,631
                                                                        ===========     ===========
Net income per common share - basic .........................           $      0.18     $      0.12
                                                                        ===========     ===========
Net income per common share - diluted .......................           $      0.18     $      0.12
                                                                        ===========     ===========
</TABLE>
DEPOSITS AND CUSTOMER DEPOSITS

         The Company has entered into various contracts for the purchase and
sale of whole engines. Occasionally, these contracts require a substantial
down-payment to fix the consideration of such engines and to allow the time to
perform due diligence work. These deposits are refundable.

                                     Page 6
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SEGMENT FINANCIAL DATA

       The Company operates in various segments of the aviation services
industry. The Company's operations have been aggregated primarily on the basis
of products or services into three reportable segments:

       AVTEAM sells whole engines, whole aircraft, engine parts and airframe
components.

       AVTEAM Aviation Field Services (AAFS) provides on-wing maintenance and
repairs including hush-kit installation and engine borescoping.

         AVTEAM Engine Repair Corp. (d/b/a M&M Aircraft Services) performs
maintenance, repair and overhaul services for certain aircraft engines.

       The Company evaluates performance based on several factors, of which
income before provision for income taxes is the primary financial measure.
The following tables present the Company's operating segment information:

<TABLE>
<CAPTION>
                                                                  TOTAL REVENUES  
                                                            THREE MONTHS ENDED MARCH 31
                                                            ---------------------------
      IN THOUSANDS                                               1999         1998
                                                               --------      -------

      <S>                                                      <C>           <C>    
      AVTEAM ..............................................    $ 17,038      $12,469
      AAFS ................................................       1,140          805
      M & M ...............................................      13,643           --
      Eliminations ........................................      (2,529)        (157)
                                                               --------      -------
      Consolidated ........................................    $ 29,292      $13,117
                                                               ========      =======
</TABLE>
<TABLE>
<CAPTION>
                                                             INCOME BEFORE PROVISION
                                                                  FOR INCOME TAXES
                                                            THREE MONTHS ENDED MARCH 31
                                                            ---------------------------
      IN THOUSANDS                                               1999         1998
                                                               --------      -------

      <S>                                                      <C>           <C>    
      AVTEAM(a) ...........................................    $    829      $ 2,028
      AAFS ................................................         116          118
      M & M ...............................................       2,525           --
      Eliminations ........................................        (277)          --
                                                               --------      -------
      Consolidated ........................................    $  3,193      $ 2,146
                                                               ========      =======
</TABLE>
      -------------
      (a)  Corporate overhead and interest expense are included in AVTEAM and
           are not allocated.

<TABLE>
<CAPTION>
                                                                    TOTAL ASSETS    
                                                            ---------------------------
      IN THOUSANDS                                          MARCH 31, 1999   DECEMBER 31, 1998
                                                            --------------   -----------------

      <S>                                                      <C>           <C>    
      AVTEAM ..............................................    $136,863     $132,540
      AAFS ................................................       1,446        1,396
      M & M ...............................................      23,517       19.295
      Eliminations ........................................     (14,126)     (11,417)
                                                               --------     --------
      Consolidated ........................................    $147,700     $141,814
                                                               ========     ========
</TABLE>

                                     Page 7
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4.       NOTES PAYABLE TO BANK

         On April 30, 1998, the Company, as borrower, and AAFS, as guarantor,
entered into a new Credit Agreement (the "Credit Agreement") with a syndicate of
lenders led by Bank of America, N.A., as administrative agent (the "Lenders"),
pursuant to which the Lenders agreed to make available to the Company a
revolving credit facility (the "Revolving Credit Facility") in the maximum
aggregate principal amount of up to $70.0 million. The Revolving Credit Facility
consists of (i) a working capital revolving loan facility (the "Working Capital
Revolving Loan Facility") in the aggregate principal amount of up to $45.0
million and (ii) an acquisition revolving loan facility (the "Acquisition
Revolving Loan Facility") in the aggregate principal amount of up to $25.0
million. The Working Capital Revolving Loan Facility is being used by the
Company to finance working capital, capital expenditures and general corporate
purposes. The Acquisition Revolving Loan Facility was used by the Company to
finance the acquisition of M&M. Borrowings under the Credit Agreement are
secured by a senior security interest in all of the assets of the Company. The
Company may borrow, repay and re-borrow funds under the Credit Agreement until
April 30, 2001. The Credit Agreement requires the Company to make certain
mandatory prepayments of principal and interest. The Credit Agreement contains
certain restrictions, including restrictions on (i) incurring debt, (ii)
declaring or paying any dividend or other distribution on account of any class
of stock of the Company, (iii) creating liens on the Company's properties or
assets, (iv) entering into a merger or other business combination or (v) a
change in control (as defined in the Credit Agreement). As of March 31, 1999,
the Company has drawn an aggregate of $39.45 million under the Working Capital
Revolving Loan Facility and $25.0 million was drawn under the Acquisition
Revolving Loan Facility. At March 31, 1999, the Company had additional
availability of approximately $5.55 million under the Working Capital Revolving
Loan Facility. Interest rates under the Company's Credit Agreement ranged from
7.69% to 9.25% as of March 31, 1999.

                                     PART I

FINANCIAL INFORMATION

Item 2   Management's Discussion and Analysis of Financial Condition and 
         Results of Operations

OVERVIEW

         AVTEAM is a global supplier of aftermarket commercial aircraft engines,
engine parts and aircraft components ("Engines and Components") serving over 700
customers, including other aftermarket suppliers, independent repair facilities,
aircraft operators and original equipment manufacturers ("OEMs"). The Company
has historically focused on the Pratt & Whitney JT8D series of engines, which
are the most widely used jet aircraft engines in the world and power
approximately 33% of the world's commercial aircraft. In 1997, AVTEAM expanded
its product line to include the CFM56 series of engines manufactured by CFM
International and DC9 airframe parts. The CFM56 series of engines had the
highest production volume of any engine series in 1998 and power nearly 40% of
all single-aisle, narrow-body aircraft ordered since 1987. In 1998, the Company
acquired its first widebody, DC10 aircraft which was disassembled and is being
sold as airframe parts and whole CF6 engines. The Company works with its
worldwide network of industry contacts to identify and evaluate Engines and
Components and surplus aircraft for potential acquisition. Engines and
Components are either made available for immediate resale or repaired by
FAA-licensed repair facilities and then resold. Surplus aircraft are purchased
for eventual disassembly and sold as parts by the Company. The Company resells
Engines and Components to other aftermarket suppliers, independent repair
facilities, aircraft operators and OEMs.

         On December 15, 1998, the Company, through its wholly-owned subsidiary,
AVTEAM Engine Repair Corp. completed the acquisition of substantially all of the
assets and the assumption of certain liabilities of M&M Aircraft Services, Inc.
("M&M"). The Company believes that M&M was one of the largest privately held
independent aircraft engine maintenance, repair and overhaul ("MRO") operations
in the world. As a result of this acquisition, the Company believes that it will
be able to realize synergies between its Engines and Components business and its
engine MRO business, including bringing to market on a more timely basis engines
and engine parts held for resale.

                                     Page 8
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

         The following table sets forth for the periods indicated certain items
contained in the Company's statements of operations expressed as a percentage of
net sales:
<TABLE>
<CAPTION>
                                                                                      THREE MONTHS
                                                                                     ENDED MARCH 31,

                                                                             --------------------------------
                                                                                 1999               1998
                                                                                 ----               ----
        <S>                                                                      <C>                 <C>
        Net sales......................................................          100%                100%
        Cost of sales..................................................           70                  70
                                                                             --------------     -------------
        Gross profit...................................................           30                  30
        Operating expenses.............................................           14                  13
                                                                             --------------     -------------
        Income from operations.........................................           16                  17
        Interest expense, net..........................................            5                   1
                                                                             --------------     -------------
        Income before income taxes.....................................           11                  16
        Provision (credit) for income taxes............................            4                   6
                                                                             ==============     =============
        Net income.....................................................            7%                 10%
                                                                             ==============     =============
</TABLE>

         FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998

         NET SALES. Net sales increased 123.3% to $29.3 million in 1999 from
$13.1 million in 1998. This increase is primarily due to the MRO revenue of
approximately $13.0 million contributed by AVTEAM Engine Repair Corp. which was
acquired in December 1998. In addition, revenue from whole engine sales
increased by 43.0% to $6.2 million from $4.3 million.

         GROSS PROFIT. Gross profit increased 122.7% to $8.7 million for the
first quarter of 1999, compared with $3.9 million for the same period last year,
and the gross profit margin for the 1999 first quarter was 29.5 percent,
compared to 29.6 percent for the 1998 first quarter. Gross profit margins
generated by the MRO operation was relatively consistent with the margin
generated by the distribution business.

         OPERATING EXPENSES. Operating expenses increased 141.4% to $4.1 million
in 1999 from $1.7 million in 1998. As a percentage of net sales, such expense
increased to 13.9% in 1999 from 12.9% in 1998. The expense increase is primarily
attributable to the operating expenses of AVTEAM Engine Repair Corp of $1.3
million, the amortization of goodwill of $224,000 and increased personnel
expense of $350,000 resulting from additional staffing in the Florida
headquarters office.

         NET INTEREST EXPENSE. Net interest expense increased significantly to
$1.4 million in 1999 from $50,000 in 1998. The increased interest expense is a
result of higher borrowing levels to finance the acquisition of M&M and to build
inventory to its present level.

LIQUIDITY AND CAPITAL RESOURCES

         Historically, the Company's primary sources of liquidity has been from
financing activities and cash flow generated by operations and, to a lesser
extent, from consignment sales. During the first three months of 1999, the
Company used approximately $2.2 million in operating activities. Net cash
provided by financing activities, derived primarily from borrowing on the credit
agreement mentioned below, was $3.6 million in the first quarter of 1999.

                                     Page 9
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

         On April 30, 1998, the Company, as borrower, and AAFS and AVTEAM Engine
Repair Corp., as guarantors, entered into a Credit Agreement (the "Credit
Agreement") with a syndicate of lenders led by Bank of America, N.A., as
administrative agent (the "Lenders"), pursuant to which the Lenders agreed to
make available to the Company a revolving credit facility in the maximum
aggregate principal amount of up to $70.0 million. The Credit Facility consists
of (i) a working capital revolving loan facility (the "Working Capital Revolving
Loan Facility") in the aggregate principal amount of up to $45.0 million and
(ii) an acquisition revolving loan facility (the "Acquisition Revolving Loan
Facility") in the aggregate principal amount of up to $25.0 million. The Working
Capital Revolving Loan Facility is being used by the Company to finance working
capital, capital expenditures and general corporate purposes. The Acquisition
Revolving Loan Facility was used by the Company to finance the M&M acquisition.
Borrowings under the Credit Agreement are secured by a senior security interest
in all of the assets of the Company. The Company may borrow, repay and re-borrow
funds under the Credit Agreement until April 30, 2001. The Credit Agreement
requires the Company to make certain mandatory prepayments of principal and
interest. The Credit Agreement contains certain restrictions, including
restrictions on (i) incurring debt, (ii) declaring or paying any dividend or
other distribution on account of any class of stock of the Company, (iii)
creating liens on the Company's properties or assets, (iv) entering into a
merger or other business combination or (v) a change in control (as defined in
the Credit Agreement). As of March 31, 1999, the Company has drawn an aggregate
of $39.45 million under the Working Capital Revolving Loan Facility and $25.0
million was drawn under the Acquisition Revolving Loan Facility. At March 31,
1999, the Company had additional availability of approximately $5.55 million
under the Working Capital Revolving Loan Facility and no availability under the
Acquisition Revolving Loan Facility.

         On December 15, 1998, the Company, through its wholly-owned subsidiary,
AVTEAM Engine Repair Corp., completed its acquisition of substantially all of
the assets and the assumption of certain liabilities of M&M for an aggregate
purchase price of $30 million and the issuance of 350,000 shares of Class A
Common Stock. Concurrent with the Acquisition, the Company made a debt repayment
of $3.4 million to M&M's lender. The Acquisition was financed from available
cash and AVTEAM's existing credit facility with Bank of America, N.A. AVTEAM
utilized substantially all of its available borrowings under the acquisition
portion of the Credit Facility for the Acquisition, and had additional
availability of approximately $9.2 million under the Credit Facility at December
31, 1998. AVTEAM is considering a number of options to provide additional
capital for its business activities after the Acquisition, including refinancing
the Credit Facility, pursuing strategic partnerships with other aviation related
companies and raising additional capital through the offering of debt or equity
securities. Until additional capital is provided, AVTEAM may forego the purchase
of certain aircraft engines, engine parts and airframe material for resale. As a
result, its business, financial condition and results of operations could be
materially adversely affected during such period.

SEASONALITY

         The Company believes that demand for Engines and Components is
seasonal, with increased demand during the summer months. This seasonality
exists because aircraft engine performance is directly related to ambient
temperature (as temperatures rise it is more difficult for aircraft engines to
perform properly). As a result, certain aircraft engines are removed from
service during the summer months due to the failure of those particular aircraft
engines to comply with exhaust gas temperature limitations. Aircraft engines of
the same type and model can have different performance capabilities. The summer
months also include peak travel periods during which aircraft utilization levels
are high. In addition, the timing of whole aircraft engines sold, which have a
substantially greater purchase price than the installed parts and components,
may cause significant fluctuations in the Company's quarterly operating results.
The Company has in the past and may in the future experience substantial
quarterly fluctuations in sales as a result of these seasonal effects.

                                     Page 10
<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

IMPACT OF YEAR 2000

         The Company believes that it has prepared its computer systems and
related software to accommodate data sensitive information relating to the Year
2000. The Company expects that any additional costs related to ensuring such
systems and software to be Year 2000-ready will not be material to the
financial condition or results of operations of the Company. In addition, the
Company is discussing with its vendors and customers the possibility of any
difficulties which may affect the Company as a result of its vendors and
customers ensuring that their computer systems and software are Year
2000-ready. To date, no significant concerns have been identified. However,
there can be no assurance that no Year 2000-related computer operating problems
or expenses will arise with the Company's computer systems and software or in
the computer systems and software of the Company's vendors and customers.

RISKS RELATING TO FORWARD -LOOKING STATEMENTS

         Except for the historical information contained in this report on Form
10-Q, the matters discussed in this report on Form 10-Q are "forward-looking
statements" within the meaning of the federal securities law and are not
guarantees of future performance. For a variety of reasons, the Company's actual
results could differ materially from any forward-looking statements made in this
report on Form 10-Q. Among the factors that could cause actual results to differ
from predicted or expected results are the following: the Company's ability to
effectively integrate acquired companies and the effects of increased
indebtedness as a result of the Company's acquisitions; a decline in the demand
for aftermarket aircraft engines, engine parts and airframe components, which
could materially adversely affect the Company's revenues; the availability of
aircraft engines, engines parts and airframe components for resale, which could
hamper the Company's ability to maintain adequate levels of inventory and meet
customer demand; the possibility that regulatory changes and unforeseen events
could impact the Company's ability to provide products and services to its
customers; existing competition from national and regional competitors and the
condition of the airline industry, which could result in pricing, supply and
demand, and other pressures on profitability and market share; and other risks
and uncertainties set forth in the Company's filings with the Securities and
Exchange Commission, including but not limited to the Company's annual report on
Form 10-K for the year ended December, 31, 1998. Consequently, the reader is
cautioned to consider all forward-looking statements in light of the risks to
which they are subject.

Item 6.           Exhibits and Reports on Form 8-K

    (a)   Exhibits

     10.1 Indemnification Agreement between the Company and James McLellan
          effective as of December 1998.

     10.2 Employment Agreement dated as of June 1, 1998 between the Company and 
          Mark S. Koondel.

     27.1 Financial Data Schedule for the period ended March 31, 1999


    (b)   Reports on Form 8-K

          The registrant did not file any reports on Form 8-K for the period 
          ended March 31, 1999

                                     Page 11


<PAGE>
                                   SIGNATURES

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

                                    AVTEAM, Inc.


                                    By:
                                                   /s/   DONALD A GRAW
Date:  May 17, 1999                 _______________________________________
                                    Donald A. Graw
                                    Chairman of the Board, President
                                    and Chief Executive Officer
                                    (Principal Executive Officer)

                                                       /s/   MARK S. KOONDEL
Date:  May 17, 1999                 ________________________________________
                                    Mark S. Koondel
                                    Chief Financial Officer, Treasurer,
                                    and Assistant Secretary
                                    (Principal Financial and Accounting Officer)

                                     Page 12


<PAGE>
                          AVTEAM, INC. AND SUBSIDIARIES

                                  EXHIBIT INDEX

EXHIBIT INDEX     DESCRIPTION
-------------     -----------
10.1              Indemnification Agreement between the Company and James 
                  McLellan effective as of December 1998.

10.2              Employment Agreement dated as of June 1, 1998 between the 
                  Company and Mark S. Koondel.

27.1              Financial Data Schedule for the period ended March 31, 1999


                                     Page 13