SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

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

                  For the fiscal year ended December 31, 2003

                                       OR

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

                       Commission File Number:  0-24795

                         AVIATION GENERAL, INCORPORATED
             (Exact name of registrant as specified in its charter)

         Delaware                                        73-1547645
(State  of  Incorporation)                  (IRS  Employer  Identification  No.)

                              7200 NW 63rd Street
                          Hangar 8, Wiley Post Airport
                            Bethany, Oklahoma 73008
              (Address of principal executive offices) (Zip Code)

                                 (405) 440-2255
              (Registrant's telephone number, including area code)

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  None

Securities  registered  pursuant to Section 12(g) of the Act: Common stock; $.50
par  value

Indicate  by  check  mark whether the registrant (1) has filed all reports 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  [  ]  No  [X]

Indicate  by  check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part  III  of this Form 10-K or any
amendment  to  this  form  10-K.  (X)

State  issuer's  revenues  for  its  most  recent  fiscal  year:  $2,142,000

Based  on the closing sales price of January 31, 2004 the aggregate market value
of  the  voting  stock  held  by  non-affiliates  of  the  registrant  was $650.

The  number  of  shares  outstanding  of the registrant's common stock, $.50 par
value,  was  7,110,846 (net of treasury stock of 1,009,551) at January 31, 2004.

Total  number  of  pages  including  cover  page  57.


<PAGE>

                                TABLE OF CONTENTS


PART  I

Item  1.  Description  of  Business                                            3

Item  2.  Description  of  Property                                           10

Item  3.  Legal  Proceedings                                                  11

Item  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders         11

PART  II

Item  5.  Market  for  Common  Equity  and  Other  Stockholder  Matters       11

Item  6.  Selected  Financial  Data                                           11

Item  7.  Managements'  Discussion  and  Analysis  or  Plan  of  Operations   12

Item  8.  Financial  Statements                                               16

Item  9.  Changes in  and  Disagreements  with  Accountants
            on  Accounting and  Financial  Disclosure                         40

PART  III

Item  10.  Directors  and  Executive  Officers  of  Registrant.               41

Item  11.  Executive  Compensation                                            42

Item  12.  Security  Ownership  of  Certain  Beneficial
             Owners  and Management and  Related  Stockholder  Matters        43

PART  IV

Item  13.  Certain  Relationships  and  Related  Transactions                 43

Item  14.  Principal  Accounting  Fees  and  Services                         43

Item  15.  Exhibits  and  Reports  on  Form  8-K                              44

Item  16.  Controls  and  Procedures                                          46

Signatures

                                        2
<PAGE>

                                     PART 1

Item  1.  Business
------------------

Overview
--------

     Aviation  General,  Incorporated  (the  "Company"  or  "AGI") is a publicly
traded holding company (Pink Sheets: AVGE.PK) incorporated under the laws of the
State  of  Delaware.  The  Company  has two wholly owned subsidiaries: Commander
Aircraft  Company  ("CAC")  and Strategic Jet Services, Inc. ("SJS").  Commander
Aircraft  Company  (www.commanderair.com)  manufactures,  markets,  and provides
support  services  for  its  line  of  single engine, high performance Commander
aircraft, and consulting, brokerage, and refurbishment services for all types of
piston-powered  aircraft.  Strategic  Jet  Services,  Inc.  provides consulting,
brokerage,  sales,  and  refurbishment  services  for  jet  aircraft.

     During  the  4th  quarter of 2002, SJS discontinued its operations, and CAC
suspended  indefinitely  production  of  new  aircraft.  Other  cost-cutting and
overhead  reductions  were  implemented  due  to  the  weakness in the Company's
business. Management believes this weakness is primarily the result of depressed
economic conditions and anxiety over terrorism and war in Iraq, which have had a
pronounced,  adverse effect on big-ticket, discretionary capital expenditures by
businesses  and  individuals.

     On December 27, 2002, Commander Aircraft Company filed a voluntary petition
under  Chapter  11  of  the  United  States  Bankruptcy Code for the District of
Delaware.  Commander  Aircraft Company filed a final reorganization plan on July
5,  2003,  following the execution of a letter agreement on that date with Tiger
Aircraft,  LLC  ("Tiger")  to  fund  the  plan.  A  stock purchase agreement was
entered  into  with Tiger on November 1, 2003, pursuant to which an amended plan
was  filed on December 10, 2003.  The U. S. bankruptcy court confirmed this plan
on  December  10, 2003, with the effective date scheduled for on or before March
31,  2004,  unless  extended  by  the  consent  of CAC, AGI, Tiger, the official
committee  of  unsecured  creditors,  the U. S. Department of Labor, and Nyltiak
Investments,  LLC.

     The agreement with Tiger resulted from months of negotiations, contact with
other  potential  investors,  and  legal  proceedings pursuant to the bankruptcy
process.  Since  the  bankruptcy  filing,  Tiger has provided CAC with Debtor in
Possession  financing,  which  has  allowed  CAC  to continue its operations and
provide  service  and  support  to  the  fleet  of  Commander  aircraft  owners,
refurbishment services, parts, and pre-owned aircraft brokerage.  CAC expects to
resume  the  production  of  new  aircraft  following  the  consummation  of the
transaction  with  Tiger.

     Pursuant  to  the confirmed bankruptcy plan and agreement with Tiger, Tiger
will  invest  approximately  $2.8  million  in Aviation General, Incorporated in
return  for  an 80% ownership interest in AGI.  Approximately $2 million will be
used  to settle with creditors in accordance with CAC's bankruptcy plan, and the
remainder  will  be  used  for  working capital.  Pursuant to the agreement with
Tiger,  AGI  must  secure the approval of the agreement from its shareholders as
well  as their authorization to amend the Company's Certificate of Incorporation
to  increase  the  Company's  authorized common shares from 20,000,000 shares to
100,000,000  shares.   The  Company  currently   has  20,000,000  common  shares
authorized  and  approximately 7,000,000 common shares (excluding Treasury stock
which  will  be  retired) issued and outstanding.  The agreement with Tiger will
necessitate  the issuance of approximately 28,000,000 new shares of common stock
to  Tiger,  resulting in a total of approximately 35,000,000 shares to be issued
and  outstanding.

Forward  Looking  Statements
----------------------------

     This  form  10-KSB  includes  certain  statements  that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities

                                        3
<PAGE>

Act.  All statements, other than statements of historical fact, included in this
Form  10-KSB  that  address  activities, events or developments that the Company
expects,  projects,  believes,  or  anticipates will or may occur in the future,
including  matters  having  to  do  with  CAC's  emergence  from  bankruptcy and
continuance  as  a going concern, expected and future aircraft sales and service
revenues,  CAC's  ability  to  fund  its  operations  and  repay  debt, business
strategies,  expansion  and  growth  of  operations  and other such matters, are
forward-looking  statements.  These  statements are based on certain assumptions
and  analyses  made  by  our  management  in  light  of  its  experience and its
perception   of   historical   trends,   current   conditions,  expected  future
developments,  and  other   factors  it  believes   are   appropriate   in   the
circumstances.  These  statements  are subject to a number of assumptions, risks
and  uncertainties,  including  general  economic  and  business conditions, the
business opportunities (or lack thereof) that may be presented to and pursued by
the  Company  and  its  performance with respect to contracts and its success in
developing  new business, the ability to attract and retain qualified employees,
and  other  factors,  many  of  which are beyond the Company's control.  You are
cautioned  that  these  forward-looking  statements are not guarantees of future
performance  and  that actual results or developments may differ materially from
those  projected  in  such  statements.

History
-------

     Commander  Aircraft  Company  was incorporated in 1988 upon the acquisition
from  Gulfstream  Aerospace  Corporation  of the Commander single engine product
line.   The  original  Commander   single  engine   aircraft  was  designed  and
manufactured  by  Rockwell  International Corporation and received certification
from  the  Federal  Aviation  Administration  ("FAA") in 1972.  Between 1972 and
1979, Rockwell produced 1,162 aircraft, including the Commander 112, 112TC, 114,
and  other  models.  Rockwell  ceased  production  in  1979 and sold its General
Aviation Division to Gulfstream Aerospace Corporation in 1981.  Gulfstream never
manufactured  Commander  single  engine  aircraft.

     After  CAC  acquired  the  Commander single engine product line in 1988, it
designed,  engineered  and  implemented  significant  improvements to the proven
Rockwell  Commander  line,  resulting  in  the  new CAC Commander 114B.  CAC was
issued  a  new  Type  Certificate  for the Commander 114B by the FAA in 1992 and
commenced  production.  The 114B features include an extensive range of avionics
equipment,  retractable  landing  gear, a 260 horsepower fuel-injected engine, a
constant  speed  propeller,  a standard range of 725 nautical miles (833 statute
miles),  a 1,216 pound useful load, maximum cruise speed of 164 knots (188 miles
per hour), a large luxurious four-place cabin, and low operating and maintenance
costs.

     In  1994,  CAC added the Commander 114AT All-Purpose Trainer to its line of
single  engine,  high performance aircraft.  The Commander 114AT is a four-place
high  performance  trainer  designed  for  military,  professional, and civilian
flight  training.  An  all-in-one  aircraft,  the  Commander  114AT  All-Purpose
Trainer  is ideal for primary through instrument flight training.  The Commander
114AT  shares  the  same design heritage as the luxurious Commander 114B, with a
modified  instrument  panel  and  more  utilitarian  interior.

     In 1995, CAC received certification from the FAA for the Commander 114TC, a
turbocharged  version  of  the  Commander 114B.  The Commander 114TC is equipped
with  the  same expansive interior and state-of-the-art systems as the Commander
114B, but utilizes a 270 horsepower turbocharged Lycoming engine, which provides
speeds  up  to 197 knots (227 miles per hour).  The Commander 114TC is certified
to  an  altitude  of  25,000  feet,  which  makes  it  an excellent aircraft for
mountainous  regions,  as  well as high-density altitude environments.  Like the
114B,  the  Commander  114TC  has  received  numerous  favorable  reviews by the
aviation  press.

     In  2000,  CAC introduced the 115 series of high performance, single engine
aircraft.  The Commander 115 and 115TC represent the culmination of a variety of
improvements  to  the  Commander line, and feature numerous airframe, engine and
systems  refinements, as well as significantly increased range capability and an

                                        4
<PAGE>

upgraded  avionics  package which includes global navigation, communication, and
moving  map  displays.  The Commander 115 series is the latest of a thoroughbred
line  of  aircraft that offer a combination of performance, comfort, safety, and
utility.

     To  date,  approximately  $50  million has been invested to build Commander
Aircraft  Company.  In  an  industry  where  a  $100 million investment is often
insufficient  to  engineer, design, and FAA type certify an aircraft, management
believes that CAC's achievements are considerable. They include: the acquisition
of  Rockwell's  single  engine  high  performance  Commander  aircraft line, the
modification  and  enhancement  of  the value of the existing fleet of Commander
aircraft  built  from  1972  through 1979 by Rockwell International Corporation,
extensively  enhancing  the aerodynamics, avionics, systems, interior, and power
plant  of the original Rockwell Commander design resulting in a new aircraft FAA
type  certification  designated 114B and 114TC, the introduction of new avionics
packages, enhancements and derivative aircraft models (the current 115 and 115TC
series),  and  the  establishment  of  manufacturing  operations  and marketing,
aircraft  brokerage,  refurbishment,  and  service  and  support  capabilities.

     CAC  is  one of the few companies in the world with an FAA Type Certificate
for  production  of  a  four-place  single  engine  high  performance  aircraft.
Commander  aircraft  are certified to the more recent stringent standards of FAR
23 through Amendment 7 and have had zero airframe ADs (Airworthiness Directives)
since  re-certification  in  1992.  Management  believes that Commander aircraft
have  a  strong  reputation in their class due to their superior safety, design,
quality,  comfort,  reliability,  resale  value,  and  ramp  appeal.

Industry  Overview
------------------

     The  general aviation industry originated in the United States in 1903 with
the first flight of an aircraft by the Wright brothers.  Today, general aviation
is a multi-billion dollar international industry, which includes the production,
sale  and  servicing  of  non-military  and non-commercial single engine piston,
multi  engine  piston,  turboprop,  and  turbojet  aircraft.  The  U. S. general
aviation  industry  is  uniquely  American and considered the best in the world.

     There  are  approximately  155,000 previously produced single engine piston
aircraft  in  the   United  States  that  are  still   flying  today,  of  which
approximately  one-third, or 50,000, aircraft are single engine high performance
aircraft.  The  average  age  of  the  single  engine  high performance fleet is
approximately  35 years, and the Company estimates that the replacement value of
these  aircraft  is  over  $15  billion.

     Although the general aviation market has been depressed in recent years, we
believe  that  the  market  for  single  engine  high performance aircraft could
improve  as  a  result of: an improving economy, attrition of the aging fleet of
aircraft,  evolution of new international markets for general aviation aircraft,
increased use of single engine aircraft as a corporate tool for small and medium
sized  businesses,  and  demand  for  advances  single  engine  trainers.

     The  market  for pre-owned general aviation aircraft, from single engine to
jet  aircraft,  is  substantially larger than the market for new aircraft as are
the  attendant  markets  for  pre-owned  aircraft  refurbishment,  avionics, and
service  and  support.

     According  to  the  General  Aviation  Manufacturers  Association ("GAMA"),
general  aviation  ("GA")  is  one  of  our  nation's most important and dynamic
industries,  flying  over  32  million  hours  (nearly twice the major airlines'
flight  hours)  and  carrying  166 million passengers annually.  GA is relied on
exclusively  by  more  the  5,400  communities  as  their  only  source  of  air
transportation,  (scheduled airlines serve approximately 600 of 5,400 airports).
Approximately  70  percent  of  the  hours  flown  by  GA  are  for business and
commercial  purposes.

     -  GA  aircraft  range  from two-seat training aircraft to intercontinental
        business  jets.

                                        5
<PAGE>

     -  GA  is  estimated  to  be  an  $18  billion  industry.
     -  Domestic  GA  exports one-third of its production and leads the world in
        development  of  new  technology  aircraft.
     -  Most  people  first  learn  to  fly  in  a  GA  aircraft.

     There  are approximately 219,464 active GA and air taxi aircraft in the USA
(excluding commuters). Of this total, more than half (150,886) are single-engine
piston  aircraft. GA enjoys the use of over 5,000 airports in the United States.

Business  Strategy
------------------

     Commander Aircraft Company has established a business model that management
believes  distinguishes  it  from  its  competitors.  CAC has a low volume, high
margin,  diversified  revenue  and  value-added service base model rather than a
high volume, low margin, pure manufacturing model.  Depending upon contributions
from  CAC's  non-manufacturing  activities,  CAC  believes  that  it can achieve
break-even financial results with the manufacture and sale of as few as 12 to 15
new  Commander  aircraft  per  annum  and  may  be  able  to achieve significant
profitability  above  these  levels.

CAC's  model  is  built  on  the  following  foundation:

     -  Manufacture, service, and support of high-end aircraft with a reputation
        for  high  quality.
     -  Assembly-manufacturer  operations  allow  streamlined  production, lower
        capital investment in equipment, smaller production staff  and  size  of
        manufacturing  facility.
     -  Semi-custom built to order in accordance with customer specifications of
        avionics,  equipment,  paint,  and  interior with customer deposits upon
        order  and progress  payments  during  the  manufacturing  process.
     -  Factory  direct  sales  in  the  U.  S. (instead of using dealers, which
        receive a  15-25%  discount).
     -  Appointment  of  leading  aviation  fixed-based  operators  ("FBOs")  as
        Commander  Authorized  Service  Centers  as  referral  sources  for  new
        aircraft  orders  and  ability  to  provide  complementary  service  and
        support  functions.
     -  Diversification  into pre-owned piston aircraft brokerage, refurbishment
        services,  paint, part, and avionics - encouraging our customers to deal
        directly with  the  factory  whenever  possible.

     This  strategy  served  CAC  well with revenues doubling from approximately
$8.0  million  in  1997  to  $16.8  million  in  2000  and  the  achievement  of
profitability.  Based  on  trends  of the previous years and sales and marketing
forecasts,  CAC significantly increased its production schedule for 2001 and had
to scale it back as the economy, particularly manufacturing, began to slide into
a  prolonged  recession.  The  depressed  domestic  and  international  economic
climate,  which is continuing, has been coupled with one of the largest declines
in  history  of asset values in the U. S. securities markets, terrorist attacks,
and  the  uncertainty  over  the  international  situation  and  war  with Iraq.

     During  2001   through  2003,   CAC's  marketing,  sales,  and  advertising
expenditures  declined significantly due to budget constraints, and as a result,
CAC  incurred  several  significant  financial  charges.

     Notwithstanding  the  disappointing financial results of the last few years
and  subsequent bankruptcy filing and suspension of new aircraft production, CAC
believes  its business model is sound and that, with adequate capitalization and
emergence  from  bankruptcy,  CAC  can  return  to  profitability  in the future
following  the  recommencement  of  new  aircraft  production  and  funding  for
appropriate  marketing,  sales,  and  advertising.

                                        6
<PAGE>

Marketing  Strategy
-------------------

     There  are  an  estimated   55,000  general  aviation  single  engine  high
performance  aircraft  in existence (approximately one-third of the total single
engine  fleet).  The  average  age  of  these aircraft is over 35 years, and the
Company  estimates  that  the cost of replacing the fleet of such aircraft would
exceed  $15  billion.  CAC  is one of the few companies in the world with an FAA
Type  Certificate  for production of a four-place single engine high performance
aircraft.  Commander  aircraft  are  certified  to  the  more  recent  stringent
standards  of  FAR  23  through Amendment 7 and have had zero airframe ADs since
re-certification  in  1992.

     CAC  believes  its aircraft possess many qualities superior to those of its
competitors  including  safety,  design,  comfort,  performance, quality, resale
value,  utility,  and ramp appeal.  Furthermore, CAC offers value-added services
and  programs  such as a turn-key ownership program, certified flight instructor
program,  and  trade-up  program   together   with  assistance  with  financing,
insurance,  trade-ins,  training,  hangaring,  and  pilot  services.

     Commander  Aircraft  Company  believes  the  market  for  its products will
improves  as a result of attrition of the existing fleet of aging single engine,
high  performance aircraft, development of new international markets for general
aviation  aircraft,   and  increased   use  of  single   engine  aircraft  as  a
cost/convenience effective corporate tool for small and medium sized businesses.

CAC's  primary  targeted  markets  are  as  follows:

     -  The  existing  pilot  base  comprised  of  pilots  who  may  or  may not
        currently own  aircraft.
     -  New  pilots  in  various  stages  of  pilot  training.
     -  Small  and  medium  sized  businesses  with  regional  travel  needs.

To  address  these  markets,  CAC  has  developed:

     -  The  Commander  Trade-Up Program, which targets owners of other aircraft
        types.
     -  The  Commander  CFI  Program,  which  targets  newer  pilots  and  their
        Certified Flight Instructors by bringing  both  together in the aircraft
        evaluation and acquisition  process.
     -  The Commander Aircraft Ownership Program, which provides business owners
        who  may  be  non-pilots  with  a  complete  turn-key  program including
        aircraft   acquisition,  financing,   insurance,  maintenance,  storage,
        product  support, private pilot service, and  instruction,  if  desired.

     CAC  stresses  the superior aspects of its aircraft such as safety, design,
quality,  comfort,  reliability,  resale  value,  and  ramp  appeal  as  well as
value-added service and support through direct contact and growing relationships
with  its  prospects  and  customers.

     CAC implements its marketing strategy via factory direct sales comprised of
regional  sales  personnel  who  are  directly  managed and supported from CAC's
headquarters  in  Oklahoma.   The  marketing  organization  is  augmented  by  a
worldwide  network  of  Commander  Authorized  Service Centers (ASCs), which are
leading  independent  FBOs  (fixed  base  operators).  CAC believes that factory
direct  sales  and marketing of its products and services provides total control
of  product  pricing, quality, and business integrity in addition to unsurpassed
customer  relations and repeat business.  Unfortunately, CAC's marketing, sales,
and advertising expenditures have been sharply curtailed over the past two years
due  to  budget  constraints.

                                        7
<PAGE>

Competition
-----------

     Commander  Aircraft  Company competes in the single engine high performance
category directly with normally aspirated and turbo-charged aircraft of the same
type  produced  by  Raytheon's  Beechcraft unit, the New Piper Aircraft Company,
Mooney  Aerospace  Group,  and   Aerospatiale's  Socata  subsidiary.   CAC  also
competes,  for aircraft purchasers, indirectly with aircraft in other categories
such  as:  single engine fixed gear aircraft manufactured by Cessna, Cirrus, and
Lancair,  single engine pressurized and turboprop aircraft, twin engine aircraft
and  alternatives  available  to  purchasers  in  the  pre-owned  market.

     Purchasers  of  single  engine,  high  performance  aircraft  choose  among
competitive  models  on  the  basis  of numerous factors, including performance,
reliability,  price,  appearance,  quality  of  service  and  reputation  of the
aircraft  and the manufacturer.  Commander Aircraft Company believes that it can
favorably  compete  with  its  competitors  on the basis of the safety, quality,
comfort,  and  performance  of  its  aircraft,  and the quality and scope of the
support  services  CAC  provides  to  its  customers.  CAC  further believes its
aircraft  are  competitively  priced  and  have  a number of features, including
certification  to  stricter  standards, newer, more attractive design and larger
cabin  size,  which make them competitive with or superior to the single engine,
high  performance aircraft produced by its four principal competitors.  Raytheon
Aircraft  Corporation  suspended  production  of  one of its single engine, high
performance  models, the F33A Bonanza, in 1994.  Raytheon's other single engine,
high  performance model, the A36, remains in production.  However, it is decades
older  in  design, FAA certified to lesser standards, and has an inferior safety
record  than Commander aircraft.  Mooney Aerospace Group produces single engine,
high  performance aircraft that are significantly smaller than the Commander 115
and  115TC,  and  Mooney  aircraft  are  also  decades  older  in design and FAA
certified  to lesser standards with inferior safety records.  New Piper Aircraft
Corporation  produces a single engine, high performance, six place aircraft with
similar  performance, the normally aspirated and turbo-charged Saratoga/Cherokee
series,  which  again  is  decades  older  in  design,  FAA  certified to lesser
standards,  and  possesses  a  substantially inferior safety record to Commander
aircraft.   Socata's marketing efforts are, for the most part, focused in Europe
and  Asia.  Each  of  these competitors has been well established in the general
aviation  industry  for  years and may have access to greater resources than are
available  to  CAC.

     Commander  Aircraft Company's aircraft are decades newer in design than the
Bonanza,  Mooney  and  Piper  competitive models and are certified to the newer,
more  stringent  Federal  Aviation  Administration  ("FAA")  Regulation (FAR) 23
through Amendment 7 standard rather than the older Civil Air Regulation (CAR) 3.
The  Commander  line  has  the  best safety record in its class, according to an
independent  study  of FAA and National Transportation and Safety Board ("NTSB")
statistics conducted by R. E. Breiling Associates, the leading accident analysis
firm  in  general  aviation.

Factors  inhibiting  our  market  share  include:

     -  Our  competitors' larger outstanding fleets of aircraft, which are eight
        to ten times the  size  of  ours,  providing  them with a larger pool of
        potential trade-in  business.
     -  Our  competitors'  use  of  dealers.
     -  Our  competitors'  significantly  greater  expenditures on marketing and
        advertising.
     -  Our  competitors'  pricing  policies.

     Commander  Aircraft  Company  believes  its  aircraft  are superior in many
respects, including safety, design, quality, comfort, reliability, resale value,
and  ramp  appeal,  and accordingly, Commander aircraft are priced approximately
10-25%  higher  than  those  of  our  competitors,  except for the Beech Bonanza
series,  which  are  priced approximately 10-20% higher than comparably equipped
Commander  aircraft.  Inherent  in  our  pricing  are  value-added programs, and
individual  consultation  with each purchaser and customization of each aircraft
in  accordance  with  their  specifications.

                                        8
<PAGE>

     Unfortunately,  economic  conditions  during  the  past  several years have
caused  price  deflation  in  manufactured  goods,  with aircraft among the most
affected  products.  Our  competitors  have  been  unable  to  maintain  pricing
integrity  and  have resorted in many cases to price reduction policies intended
to  foster sales.  We believe that these competitors will not be able to sustain
these  policies  as the margins they result in are not profitable.  Although our
competitors  have  reduced prices, we plan to maintain our prices while offering
additional  avionics  as  standard  equipment  on our aircraft, making them more
price  competitive with comparably equipped aircraft offered by our competitors.

Insurance
---------

     Commander  Aircraft  Company  normally  carries  most  types  of  insurance
customary  for  a  manufacturer of general aviation aircraft, including coverage
for  general  liability,  property  damage, aircraft loss or damage and worker's
compensation,  but  does  not  carry  product  liability  insurance. There is no
assurance  that  the  amount  of insurance carried by CAC would be sufficient to
protect it fully in the event of a serious accident and liability claim, but CAC
believes  that  the  amounts  and  coverage  of  its  insurance  protection  are
reasonable  and  appropriate for the CAC's business operations.  Although highly
probable,  there  is  no  assurance  that  such  insurance  will  continue to be
available  on  commercially  reasonable  terms.

     From  time  to time, CAC is the target of litigation, including suits filed
regarding  accidents  of  Commander  aircraft. In mid 1994, Congress enacted the
General  Aviation  Revitalization  Act,  S.  1458 ("GARA"), which established an
18-year  statute  of  repose  for   general  aviation  aircraft   and  component
manufacturers.   GARA  prohibits   product  liability  suits   against  aircraft
manufacturers  for  aircraft  that  are  more than 18 years old when an accident
occurs. This action eliminated from the liability tail all Rockwell-manufactured
Commander  aircraft,  last  produced  in  1979.  The only aircraft for which the
Company  has  potential liability as a manufacturer are aircraft it has produced
since  1992. This currently represents approximately 200 aircraft, approximately
70  of  which  have  been  exported  outside  of  the  United  States.

     Through  March  1,  1995,  CAC  maintained product liability insurance with
coverage  of  $10  million per occurrence and $10 million in the aggregate, with
deductible  of  $200,000  for  aircraft built through March 1, 1995.  Management
believes  that  the  premiums  for  this  type  of  insurance are rapacious, the
policies  are  full  of  holes,  the  insurance companies end up controlling any
litigation and are loathe to vigorously defend unwarranted claims, and prefer to
settle  and  raise  premiums  rather  than  defend  unwarranted  claims.   Thus,
management  believes  that  the  interest  of  shareholders  is better served by
vigorously defending claims through the services of highly qualified specialists
and  attorneys  rather  than  retaining  product  liability  insurance to settle
exorbitant  claims.  As  such,  CAC  elected  not  to  retain  product liability
insurance  coverage   commencing  March  1,  1995.   CAC  could  be  exposed  to
significant  financial  risks  if  losses  from product liability were to occur.
Since  CAC  dropped  its  product  liability  insurance in 1995, it has saved an
estimated  $8-10  million  in  insurance  premium  costs  versus expenditures of
approximately  $1.5  million  in  litigation and settlement costs, most of which
would  have  been  expended  even  with liability insurance because of insurance
policy  deductibles.

     The  General  Aviation Revitalization Act established an 18-year statute of
repose  for  general  aviation  aircraft  and component manufacturers.  This law
prohibits  product  liability  suits  against  aircraft  manufacturers  when the
aircraft  involved  in  an  accident is more than 18 years old when the accident
occurs.  This action eliminated all Rockwell manufactured Commanders produced in
the  1970's  from  CAC's  liability  tail.  The  only  aircraft  that  CAC bears
manufacturing  responsibility  for  are  the models 115, 115TC, 114B, 114TC, and
114AT  produced  from  1992  through  the  present,  which  currently  represent
approximately  200  aircraft.

                                        9
<PAGE>

Parts  and  Materials  Availability
-----------------------------------

     Commander  Aircraft  Company  purchases  parts  and materials from over 100
different suppliers.  Though some of these vendors are key to the manufacture of
CAC's  aircraft,  there  are  no  long-term  commitments  or  contracts with any
suppliers.  CAC  considers  its relationship with its suppliers, including those
affected  by  the  bankruptcy filing, to be satisfactory and does not anticipate
any  shortages or interruption to production due to lack of available components
on  a  timely  basis.

Government  Regulations
-----------------------

     In  order  for  an aircraft model to be manufactured for sale, the FAA must
issue  a  Type Certificate for the aircraft model and, in order for a particular
aircraft  to be operated, an Airworthiness Certificate for that aircraft must be
issued.  Commander  Aircraft  Company  was  issued  a  Type  Certificate for the
Commander  114B  in 1992 and a Type Certificate for the Commander 114TC in 1995.
CAC  owns  Type  Certificates  for  all  predecessor  and  current single engine
Commander  models.  The  sale  of  CAC's  product  internationally is subject to
regulation  by  comparable  agencies  in  foreign  countries.

     CAC  received  a  Production Certificate from the FAA in 1993, which allows
CAC  to  issue  Airworthiness  Certificates  from  the  FAA.   An  Airworthiness
Certificate  is  issued  for  a particular aircraft when it is certified to have
been built in accordance with specifications approved under the Type Certificate
for that particular model aircraft.  Commander aircraft are certified to FAR 23,
Amendment  7,  meeting  more stringent standards for single engine aircraft than
aircraft  certified  under  the  older  CAR  3  regulations.   CAC's  production
certificate  has  remained dormant during suspension of new aircraft production.
CAC  plans  to  reactivate  its  production  certificate  upon  recommencing new
aircraft  production.  Although  a  production  certificate  is not necessary to
produce  aircraft, having one facilitates the production process and interaction
with  the  FAA.

Employees
---------

     The  Company  has  a  total  of 14 full-time and 2 contract employees as of
March  15,  2004.  The  Company believes that its future success will depend, in
part, upon its continued ability to recruit and retain highly skilled employees.
Although  competition  for  qualified  personnel is strong, the Company has been
successful in attracting and retaining skilled employees.  None of the Company's
employees  are  covered  by  a  collective bargaining agreement, and the Company
considers its employee relations to be good.  The Company believes resumption of
new  aircraft  production  and  achievement of profitable financial results will
require  approximately  50  to  60  full-time  employees.

Item  2.  Properties
--------------------

     The  Company has operated in a 103,650 square foot facility, which consists
of  three  buildings  constructed  in 1981, located at the Wiley Post Airport in
Bethany, Oklahoma.  The Company performs all of its operations and services from
this facility.  During the past ten years, the Company has improved its facility
to  assure  safety  and  compliance  with  environmental  laws  and regulations.

     In  2003,  the Company transferred its lease with the Oklahoma City Airport
Trust  Authority  to  The  Servicenter,  Inc., a company with plans to operate a
Fixed  Base  Operation  in  the  facility  and  to provide significant aesthetic
upgrades  to  the  facility.  The  Company  negotiated  a 3.5 year sub-lease for
50,011  square  feet  of  manufacturing,  service  and  office space, guaranteed
renewable  at  six-month  intervals.

     A  summary  of lease payments is presented in Note G - Leases, of the Notes
to  Consolidated  Financial  Statements  for  2003.

                                       10
<PAGE>

Item  3.  Legal  Proceedings
----------------------------

     The  Company  is a defendant in a lawsuit resulting from a crash of one its
manufactured  aircraft.  Management  does  not  believe  the  Company  bears any
responsibility  and  has  vigorously  defended against this claim.  The National
Transportation  and  Safety  Board accident investigation has found the probable
cause of this crash was pilot error.  This matter will be discharged pursuant to
the  bankruptcy  plan  upon  its  completion.  The  Company  is also a defendant
resulting  from  a  crash  of  a  1977  Rockwell Commander aircraft that was not
manufactured  by  the  Company  and  for  which the Company believes it bears no
responsibility,  and in any event, will be discharged pursuant to the bankruptcy
plan  upon  its  completion.

     On  December  27,  2002, CAC filed a voluntary petition under Chapter 11 of
the  United States Bankruptcy Code in the United States bankruptcy court for the
District  of  Delaware.  CAC  filed a final reorganization plan on July 5, 2003,
following  the  execution  of  a  letter  of  agreement  on that date with Tiger
Aircraft,  LLC  ("Tiger")  to  fund  the  plan.  A  stock purchase agreement was
entered  into  with Tiger on November 1, 2003, pursuant to which an amended plan
was  filed  on  December  10,  2003, with the effective date scheduled for on or
before  March  31,  2004, unless extended by the consent of CAC, AGI, Tiger, the
official  committee  of  unsecured creditors, the U. S. Department of Labor, and
Nyltiak  Investments,  LLC.  For  additional information, see Note R of Notes to
Consolidated  Financial  Statements.

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

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  fiscal  year  covered  by  this  report.


                                    PART II
                                    -------

Item  5.  Market  for  the  Registrant's  Common  Stock  and Related Shareholder
--------------------------------------------------------------------------------
Matters
-------

     The  common stock of Aviation General, Incorporated, $.50 par value (symbol
AVGE.PK),  traded on the NASDAQ Small-Cap Market until it was delisted and began
trading  on  the  over-the-counter  bulletin board on September 24, 2002 and has
recently  been  traded on the pink sheets.  This table presents its high and low
market  prices  during the past two years.  The Company has never paid dividends
in  the  past,  and  does  not  intend  to  pay  dividends  in  2004.

<TABLE>
<CAPTION>
                              Quarterly  Common  Stock  Price  Ranges
                             -----------------------------------------
                                  2003                      2002
                             ---------------           ---------------
     Quarter                 High        Low           High        Low
     -------                 ----        ---           ----        ---
<S>                           <C>        <C>           <C>         <C>
     1st                      .09        .03           .38         .23
     2nd                      .51        .03           .67         .33
     3rd                      .26        .02           .95         .28
     4th                      .06        .0001         .30         .05
</TABLE>

     In  2002,  The  Company  issued  251,516  shares  of  its  common  stock as
settlement  of  certain  obligations.  Included  were  136,364 shares issued for
$45,000  for  Board  of Directors fees and 115,152 shares issued for $38,000 for
sales  commissions.

     There  were  approximately  300  holders  of record of the Company's common
stock  as  of  December  31,  2003.

Item  6.  Selected  Financial  Data
-----------------------------------

     The  selected financial data presented below for each year in the five year

                                       11
<PAGE>

period  ended  December  31,  2003  have been derived from the Company's audited
financial  statements.  This  data  should  be  read  in  conjunction  with  the
Financial  Statements  and related notes thereto and other financial information
appearing  elsewhere  in  this  Form  10-K.

<TABLE>
<CAPTION>
                                           Year  Ended  December  31
                               ------------------------------------------------
                                (Amounts in thousands, except per share data)
                                 2003      2002       2001      2000      1999
                               -------   -------    -------   -------   -------
   Operation  Data:
   ----------------
<S>                            <C>       <C>        <C>       <C>       <C>
   Net  sales                  $ 2,142   $ 8,443    $ 9,488   $16,831   $13,667
   Net  earnings  (loss)       $(1,308)  $(4,285)   $(5,520)  $   450   $  (385)
   Earnings (loss) per share
     basic  &  diluted         $  (.18)  $  (.60)   $  (.84)  $  0.07   $  (.05)

   Balance  Sheet  Data:
   ---------------------
   Total  assets               $ 2,424   $ 3,715    $ 7,304   $11,809   $ 8,632
   Long-term  debt             $ 1,262   $ 1,235          -         -         -
</TABLE>

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

     You  should  read  the  following discussion and analysis together with our
financial  statements  and  accompanying  notes appearing elsewhere in this Form
10KSB.  The  following  information  contains  forward-looking  statements  that
involve risks and uncertainties. Actual results may differ materially from those
anticipated  due to many factors, including those set forth under Items 1 and 3,
Business  and  Legal  Proceedings.

Critical  Accounting  Estimates  and  Accounting  Policies

     We  must  make  estimates of the collectability of accounts receivable.  We
analyze  historical  write-offs,  changes  in  our  internal credit policies and
customer  concentrations  when  evaluating  the  adequacy  of  our allowance for
doubtful  accounts.  Differences may result in the amount and timing of expenses
for  any  period  if  we  make  different judgments or use difference estimates.

     Inventories  are  valued  at  the  lower  of  cost   or  market.   We  must
periodically evaluate the carrying value of our inventories to determine whether
market  conditions  have  impaired  the  carrying  value  of  our  inventories.

     Property  and equipment are evaluated for impairment whenever indicators of
impairment  exist.  Accounting standards require that if an impairment indicator
is  present, the Company must assess whether the carrying amount of the asset is
unrecoverable  by estimating the sum of the future cash flows expected to result
form  the  asset,  undiscounted  and  without interest charges.  If the carrying
amount  is  less  than  the  recoverable  amount,  an  impairment charge must be
recognized,  based  on  the  fair  value  of  the asset.  Management assumed the
Company  was  a going concern for purposes of evaluating the possible impairment
of  its property and equipment.  Should the Company not be able to continue as a
going concern, there may be significant impairment in the value of the Company's
property  and  equipment.

     We  must  estimate  the  future  liability  related to warranty work on new
aircraft  sold.

     As  part of the process of preparing our consolidated financial statements,
we  are required to estimate our income taxes.  This process involves estimating

                                       12
<PAGE>

our current tax exposure together with assessing temporary differences resulting
from  differing  treatment  of  items  for  tax  and accounting purposes.  These
differences  result in deferred tax assets and liabilities.  We must then assess
the  likelihood  that  our  deferred  tax  assets  will be recovered from future
taxable  income,  and,  to the extent we believe that recovery is not likely, we
must  establish  a  valuation  allowance.  To  the  extent  that  we establish a
valuation  allowance  or  increase this allowance in a period, we must include a
tax provision or reduce our tax benefit in the statements of operations.  We use
our  judgment  to  determine our provision or benefit for income taxes, deferred
tax  assets and liabilities and any valuation allowance recorded against our net
deferred  tax  assets.  We  believe,  based  on  a  number  of factors including
historical  operating  losses, that we will not realize the future benefits of a
significant  portion  of  our  net  deferred  tax assets and we have accordingly
provided  a  full valuation allowance against our deferred tax assets.  However,
various  factors  may  cause  those  assumptions  to  change  in  the near term.

     We  cannot  predict  what  future laws and regulations might be passed that
could have a material effect on our results of operations.  We assess the impact
of significant changes in laws and regulations on a regular basis and update the
assumptions  and estimates used to prepare our financial statements when we deem
it  necessary.

     We  have  determined  the  significant principles by considering accounting
policies  that  involve the most complex or subjective decisions or assessments.
Our   most  significant   accounting  policies  are  those  related  to  revenue
recognition  and  accounting  for  stock-based  compensation.


Aircraft  Sales  and  Marketing
-------------------------------

     We  recognize  the sale of new aircraft when a purchase agreement is funded
and  title  is transferred to the buyer, which occurs after the Company receives
an  airworthiness certificate from the Federal Aviation Administration. Sales of
pre-owned  aircraft  are recognized upon execution and the funding of a purchase
agreement.  Service  revenues  are  recognized  when the services are performed.

     Our  aircraft  production is dependent upon the perception of our customers
that  the  purchase  of  our  aircraft  is desirable over others that they could
choose. Often the purchase of an aircraft is dependent upon investment decisions
made  by  the  buyer that could be affected by many factors. Among these factors
are  the  general  economic  conditions  at  the  time the decision is made, the
performance of the buyer's investments and the tax treatment or possible changes
in the tax treatment of the aircraft purchase for the buyer. Additionally, as we
have  seen  in  the  last  year,  the  perception  of  safety, both personal and
national,  can  have  an  impact  on  the  business  of  the  Company.

Inventories
-----------

     Our  inventories, other than pre-owned aircraft, are stated at the lower of
cost or market, and cost is determined by the average-cost method. The inventory
costs  include  all  direct  manufacturing  costs and overhead.  The inventories
consist  of  parts for manufacturing and servicing of aircraft, parts for resale
and  work  in process, as well as new and pre-owned aircraft. Pre-owned aircraft
are  valued  on  a specific-identification basis at the lower of cost or current
estimated  realizable  wholesale  price.

Results  of  Operations:
                                  2003 vs. 2002
                                  -------------

     During  the  second  half  of  2002,  the  Company  entered  into a renewed
slowdown,  which  management  believes  was  probably  the  result  of continued
weakness  in  the  overall economy, which may have resulted from renewed anxiety
over   possible   events  such  as  anthrax,  air  travel,  potential  terrorist

                                       13
<PAGE>

activities,  and  the march toward war with Iraq, and it caused a decline in the
purchase  of  big-ticket  durable  goods  such as automobiles and aircraft.  The
Company  experienced  cancellation  or postponement of several new and pre-owned
aircraft  orders  and  transactions, causing a cash flow crisis resulting in the
necessity  of  filing  a  Chapter  11  bankruptcy petition on December 27, 2002.

     The  Company, along with many other companies in the aviation industry, has
been  affected  by  macro  political  and economic events beyond its control and
endeavored  to  adjust its new aircraft production schedule and overall business
accordingly.  However,  there  are  lead and lag financial consequences to doing
so.  For example, the terrorist attacks on the United States in 2001, concurrent
with  the  largest decline in asset values in the securities markets in history,
and  a  weakening  economy,  presented  enormous  adjustment  challenges  to the
Company.

     During  2003,  the  Company  operated  without  any  aircraft manufacturing
activities  while  continuing  to support the existing fleet with part sales and
service and sales of pre-owned aircraft.  Management has remained focused on the
confirmation  of  the  Chapter  11  bankruptcy  plan and its pending completion.

     The  following  is  a  more  detailed  explanation of the components of the
financial  results  that  were  affected:

     Revenues  decreased  75%  in  2003  to  $2,141,734 from $8,443,416 in 2002,
resulting  in  a  net  loss  of  $(1,308,272) for 2003 compared to a net loss of
$(4,285,111)  in  2002.  The net loss per basic and diluted share was $(0.18) in
2003  compared  to  a  net  loss of $(0.60) per basic and diluted share in 2002.

     Revenues  from  aircraft  sales  decreased  82%  in 2003 to $1,347,762 from
$7,412,519  in  2002.  Pre-owned  and  consigned  aircraft sales decreased to 13
aircraft  in  2003  from 16 new, pre-owned and consigned aircraft sales in 2002.

Revenues generated by the service, parts and refurbishment business decreased by
23%  to  $793,972  in  2003  compared  to  $1,030,897  in  2002.

     Aircraft  cost  of  sales  decreased  by  83  %  to  $1,176,706  in 2003 as
compared  to  $6,679,481  for  2002.  This decrease was due to a 75% decrease in
sales  combined with an increase in gross profit margins to 13% in 2003 from 10%
in  2002.

     Service  and  parts  cost  of sales decreased by  36% to s $627,463 in 2003
compared  to  $829,954 in 2002. The decrease was partially due to a lower volume
of  service  activity and spare parts shipments. The gross margin on service and
parts  sales  increased  to  21%  in  2003  from  19%  in  2002.

     Engineering  and product development costs decreased to $1,930 in 2003 from
$126,232  in  2002.  The  decrease in these expenses is due to the downsizing in
this  area.

     Selling,  general  and  administrative   expenses  decreased  by  36%  from
$2,440,414  in  2002  to  $1,557,638 in 2003.  This decrease is due primarily to
reductions  both in the sales and administrative staffs and operations, however,
significant  legal  and  administrative  expenses  were  incurred  in  2003 from
activities  associated  with  the  Chapter  11  bankruptcy.

     Also  included  in  operating expenses for 2002 is an impairment of Work in
Process  (WIP),  parts and aircraft inventory of $1,758,620.  Of this, pre-owned
aircraft  inventory  was  impaired  by  $296,699 to reflect the depressed market
values during the current recession, reducing the values to the lower of cost or
market;  WIP was impaired by $510,506 in anticipation of the additional time and
expenses  necessary  to  restart  manufacturing  and;  inventory was impaired by
$951,415  to  reduce  value  of  slow-moving  inventories,  thereby reducing the
inventory  values  to  the  lower  of  cost  or  market.  No such impairment was
recognized  in  2003.

                                       14
<PAGE>

     Other  income  (expense)  went from expense of $56,368 in 2002 to income of
$62,581  in  2003.  This  increase was due primarily to various refunds received
during  2003.

     Interest expense decreased by 39% to $148,850 in 2003 from $243,414 in 2002
due  to  reduced  activity  in short-term borrowings from the Company's lines of
credit.

     The  Company  had no litigation settlements in 2003, compared with $200,000
in  2002.

During  2002  the Company realized a loss of $(395,973) on certain available for
sale  equity  securities.  The  Company  had  no  such  loss  in  2003.

Liquidity  and  Capital  Resources
----------------------------------

     Cash provided by operations totaled $485,582 for 2003 compared to cash used
in  operations  of  $648,036  in  2002.

     The Company experienced positive cash flows from operations during 2003 due
primarily  to  a decreased by $1,189,816 in inventories combined with a $456,828
increase  in  accrued  liabilities,  which  more  than offset the 2003 loss from
operations  of  $(1,308,272).

     The  Company  had  no  capital  expenditures  in  2002.

     The  Company  established  a  line  of  credit with a bank in the amount of
$2,500,000  for  the  purpose  of  funding pre-owned aircraft for inventory. The
notes  bear interest at prime plus 1% and are secured by individual aircraft and
certain  guarantees.  In addition, the Company established a line of credit with
a  financial  institution in the amount of $3,000,000 to provide funding for new
aircraft  as  well  as  pre-owned piston and turbine aircraft. The notes contain
variable  interest  rates  up  to  12.5%,  mature in six-month intervals and are
renewable  at the option of the Company for an additional six months. Borrowings
under  these  lines  of  credit  totaled  $453,477  at  December  31,  2003.

     During 2003, the Company was able to obtain $427,000 of new financing which
was  used  in  current  operations.

Contractual  Obligations  and  Commercial  Commitments
------------------------------------------------------

     The  following  table is a summary of the Company's contractual obligations
as  of  December  31,  2003.

<TABLE>
<CAPTION>
                                      Payment Due  by  Period
                                      -----------------------
                              Total     Less than One   1-3  Years   Thereafter
                              -----     -------------   ----------   ----------
                                        Year
                                        ----
<S>                        <C>          <C>             <C>          <C>
Long-Term  Debt            $1,261,795   $        -      $1,261,795   $        -
Current  Note  Payable     $  853,477   $  853,477      $        -   $        -
Operating  Leases          $  321,300   $  113,400      $  207,900   $        -
                           ----------   ----------      ----------   ----------

Total                      $2,436,572   $  966,877      $1,469,695   $        -
                           ==========   ==========      ==========   ==========
</TABLE>

     As  we go forward in 2004, management believes that economic conditions and
financial  markets  appear to have stabilized and that the Company could benefit
from  increased  interest  in  general aviation, due to inconvenience and safety
factors  now  attendant  with  commercial airline travel. The Company could also

                                       15
<PAGE>

benefit  from  historically  low  interest  rates, which lower significantly the
financing  cost  of  aircraft  purchases.

Market  Risk
------------

     The Company's market risk is impacted by changes in interest rates, foreign
currency exchange rates and certain equity security prices.  The note receivable
held  by  the  Company includes a quarterly adjustment clause, which permits the
Company  to  increase  or decrease, the amount of interest charged based on bank
prime  rates.  All  transactions  with  international customers are made in U.S.
dollars,  thereby  minimizing the risk associated with foreign currency exchange
rates.     The  Company's  investment  in  equity  securities  is  classified as
available-for-sale  with  unrealized  gains  or  losses excluded from income and
reported  as  other  comprehensive  income.  The Company has no significant risk
associated  with  commodity  prices.

Inflation
---------

     Management  believes that the overall effects of inflation on the Company's
costs  of  materials  and supplies have been minimal.  For each of the past five
years,  cost  of sales was virtually the same as it would have been on a current
cost  basis.  The Company uses a moving average cost for inventory valuation and
cost  changes  are  not  readily  recognized  in  the  short-term.

Item  8.  Financial  Statements  and  Supplementary  Data
---------------------------------------------------------

     Index  to  Financial  Statements  and  Supplementary  Data:

                                                       Page
          Report  of  Independent  Public  Accountants                        16

          Financial  Statements:

          Consolidated  Balance  Sheets  December  31,  2003                  17

          Consolidated  Statements of Operations for the years ended          19
                  December  31,  2003  and  2002

          Consolidated  Statement  of  Stockholders'  Equity for the          20
                  years  ended  December  31,  2003  and  2002

          Consolidated  Statements of Cash Flows for the years ended          21
                  December  31,  2003  and  2002

          Notes  to  Consolidated  Financial  Statements                      23





                                       16
<PAGE>


               Report of Independent Certified Public Accountants
               --------------------------------------------------


Board  of  Directors  and  Stockholders
Aviation  General,  Incorporated

We have audited the accompanying consolidated balance sheet of Aviation General,
Incorporated  and  Subsidiaries  as  of  December  31,  2003,  and  the  related
consolidated  statements of operations, stockholders' equity, and cash flows for
two  years then ended.  These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material respects, the financial position of Aviation General,
Incorporated  and Subsidiaries as of December 31, 2003, and the results of their
operations  and their cash flows for the two years then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will continue as a going concern.  As discussed in Notes A and Q to the
consolidated  financial  statements,  the  Company has suffered recurring losses
from  operations  and  has  a  deficit net worth at December 31, 2003 that raise
substantial  doubt  about  its   ability  to   continue  as   a  going  concern.
Management's plans in regard to these matters are also described in Note Q.  The
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.



\s\Murrell,  Hall,  McIntosh  &  Co,  PLLP
Murrell,  Hall,  McIntosh  &  Co,  PLLP

Oklahoma  City,  Oklahoma
March  15,  2004



                                       17
<PAGE>

                         AVIATION GENERAL, INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                                December 31, 2003

                                     ASSETS
<TABLE>
<CAPTION>
CURRENT  ASSETS
<S>                                                                <C>
  Cash  and  cash  equivalents                                     $      5,595
  Accounts  receivable                                                   14,840
  Inventories                                                         2,021,715
  Prepaid  expenses  and  other  assets                                     700
      Total  current  assets                                          2,042,850

PROPERTY  AND  EQUIPMENT
  Office  equipment  and  furniture                                     365,373
  Vehicles  and  aircraft                                                95,115
  Manufacturing  equipment                                              384,979
  Tooling                                                               676,747
  Leasehold  improvements                                               112,748
                                                                      1,634,962
  Less  accumulated  depreciation                                    (1,253,474)
                                                                        381,488
                                                                   ------------

                                                                   $  2,424,338
                                                                   ============
</TABLE>













     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       18
<PAGE>

                         AVIATION GENERAL, INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                                December 31, 2003


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CURRENT  LIABILITIES
  LIABILITIES  NOT  SUBJECT  TO  COMPROMISE
<S>                                                                <C>
    Accounts  payable                                              $    139,864
    Accrued  expenses                                                 1,153,418
    Notes  payable                                                      853,477
                                                                   ------------
        Total  current  liabilities  not
          subject  to  compromise                                     2,146,759
                                                                   ------------


  LIABILITIES  SUBJECT  TO  COMPROMISE
    Accounts  payable                                                 1,974,920
    Accrued  expenses                                                   602,527
    Refundable  deposits                                                220,184
                                                                   ------------
      Total  liabilities subject to compromise                        2,797,631
                                                                   ------------

      Total  current  liabilities                                     4,944,390
                                                                   ------------

  NONCURRENT  LIABILITIES
    Notes  payable                                                    1,261,795
                                                                   ------------
                                                                      1,261,795
                                                                   ------------

  REEDEEMABLE  COMMON  STOCK  -  $.50  par  value;
    Issued 150,000 shares in 2001; stated at
      redemption  value                                                 150,000
                                                                   ------------

STOCKHOLDERS'  EQUITY  (DEFICIT)
  Preferred  stock,  $.01  par  value,  5,000,000
    shares  authorized;  no  shares  outstanding                              -
  Common  stock,  $.50  par  value,  20,000,000
    shares  authorized; 8,120,397 shares issued                       4,060,198
    at  December  31,  2003
  Additional  paid-in  capital                                       37,254,305
  Less:  Treasury stock at cost,  1,009,551  shares  at
    December  31,  2003                                              (1,709,638)
  Accumulated  (deficit)                                            (43,536,712)
                                                                   ------------
      Total  stockholders'  equity  (deficit)                        (3,931,847)
                                                                   ------------

                                                                   $  2,424,338
                                                                   ============
</TABLE>



     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       19
<PAGE>

                         AVIATION GENERAL, INCORPORATED
                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                               For the years ended December 31,
                                               --------------------------------
                                                      2003          2002
                                                  -----------   -----------
NET  SALES
<S>                                               <C>           <C>
  Aircraft                                        $ 1,347,762   $ 7,412,519
  Service                                             793,972     1,030,897
                                                  -----------   -----------
  Total  net  sales                                 2,141,734     8,443,416
                                                  -----------   -----------

COST  OF  SALES
  Aircraft                                          1,176,706     6,679,481
  Service                                             627,463       829,954
                                                  -----------   -----------
  Total  cost  of  sales                            1,804,169     7,509,435
                                                  -----------   -----------

  Gross  margin                                       337,565       933,981
                                                  -----------   -----------


OTHER  OPERATING  EXPENSES
  Product  development  and  engineering  costs         1,930       126,232
  Selling, general and administrative expenses      1,557,638     2,440,414
  Impairments  and  allowances                              -     1,758,620
                                                  -----------   -----------
  Total  other  operating  expenses                 1,559,568     4,325,266
                                                  -----------   -----------


  Operating  income  (loss)                        (1,222,003)   (3,391,285)
                                                  -----------   -----------


OTHER  INCOME  (EXPENSES)
  Interest  income                                          -         1,929
  Other  income  (expense)                             62,581       (56,368)
  Interest  expense                                  (148,850)     (243,414)
  Litigation  settlement                                    -      (200,000)
  Realized loss on available for sale
    equity securities                                              (395,973)
                                                  -----------   -----------
  Total  other  expenses                              (86,269)     (893,826)
                                                  -----------   -----------

NET  EARNINGS  (LOSS)                             $(1,308,272)  $(4,285,111)
                                                  ===========   ===========


NET  EARNINGS  (LOSS)  PER  SHARE

  Weighted  average common shares outstanding;
    basic                                               7,110,846     7,110,846
                                                      -----------   -----------

  Net  earnings  (loss)  per  share;  basic           $     (0.18)  $     (0.60)
                                                      ===========   ===========

  Weighted  average  common  shares  outstanding;
    diluted                                             7,110,846     7,110,846
                                                      ===========   ===========

  Net  earnings  (loss)  per  share;  diluted         $     (0.18)  $     (0.60)
                                                      ===========   ===========
</TABLE>


     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       20
<PAGE>

                         AVIATION GENERAL, INCORPORATED
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                              Additional                                                  Other          Total
                           Common Stock         Paid-in          Treasury Stock       Accumulated     Comprehensive   Stockholders'
                       Shares       Amount      Capital       Shares        Amount      Deficit       Income (Loss)     Equity
                     ---------   ----------   -----------   ---------   ------------  ------------   --------------   -------------

Balance  at
<S>                   <C>         <C>          <C>           <C>         <C>           <C>             <C>             <C>
  January  1,  2002   7,631,519   $3,815,759   $37,000,299     772,189   $(1,294,193)  $(37,943,329)   $(253,873)      $1,324,633

Treasury  Stock not
  retired as planned    237,362      118,681       296,764     237,362      (415,445)                                           -

Issuance  of
  common  stock         251,516      125,758       (42,758)                                                                83,000

Comprehensive loss
  Net  loss                                                                              (4,285,111)                   (4,285,111)
    Other
    comprehensive
    loss
      Change  in
      unrealized
      investment
      loss,  net                                                                                         253,873          253,873
        Comprehensive
        loss                                                                                                           (4,031,238)
                     ---------   ----------   -----------   ---------   ------------  ------------     ----------     -----------

Balance  at
  December 31, 2002   8,120,397    4,060,198    37,254,305    1,009,551   (1,709,638)   (42,228,440)           -       (2,623,575)

Comprehensive loss
  Net  loss                                                                              (1,308,272)                   (1,308,272)
                     ---------   ----------   -----------   ---------   ------------  ------------     ---------      -----------

Balance  at
  December 31,2003    8,120,397  $4,060,198    $37,254,305    1,009,551  $(1,709,638)  $(43,536,712)   $       -      $(3,931,847)
                      =========  ==========    ===========    =========  ===========   ============    =========      ===========
</TABLE>


















     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       21
<PAGE>
                         AVIATION GENERAL, INCORPORATED
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                               For the years ended December 31,
                                               --------------------------------
                                                      2003          2002
                                                  -----------   -----------
Increase (decrease) in Cash and Cash Equivalents

Cash  flows  from  operating  activities
<S>                                               <C>           <C>
  Net  earnings  (loss)                           $(1,308,272)  $(4,285,111)
  Adjustments  to  reconcile  net  earnings
    (loss)  to  net  cash  provided  by
    (used  in)  operating  activities
      Depreciation  and  amortization                 108,918       130,684
      Noncash  interest  earnings
      Common  stock  issued  for  litigation
        settlement,  services, interest
        charges,  commissions  and
        directors'  fees                                    -        83,000
       Receipts on aircraft notes receivable                -       101,896
       Loss  (gain)  on  retirement  of
         property  and  equipment                      (1,437)       17,965
       Realized  loss  on  sale  of
         available-for-sale equity securities               -       395,973
       Changes in assets and liabilities
         (Increase)  decrease  in
           Accounts  receivable                        (5,409)       (9,431)
           Inventories                              1,189,816     2,927,701
           Prepaid expenses and other assets            2,891        66,564
         Increase  (decrease)  in
           Accounts  payable                          (31,437)     (163,229)
           Accrued  expenses                          456,828       685,001
           Refundable  deposits                        73,684      (599,049)
                                                  -----------   -----------
           Net  cash  provided  by  (used in)
             operating activities                     485,582      (648,036)
                                                  -----------   -----------

Cash  flows  from  investing  activities
  Proceeds  on  sales of property and equipment         1,500             -
                                                  -----------   -----------

Net  cash  provided  by  (used in)
  investing activities                                  1,500             -
                                                  -----------   -----------

Cash  flows  from  financing  activities
  Proceeds  from  borrowings                          427,000     3,693,325
  (Payments  on)  borrowings                         (906,342)   (3,258,790)
                                                  -----------   -----------

           Net  cash  provided  by  (used in)
             financing activities                    (479,342)      434,535
                                                  -----------   -----------

           NET  INCREASE  (DECREASE)  IN  CASH
             AND CASH EQUIVALENTS                       7,740      (213,501)

Cash and cash equivalents at beginning of year         (2,145)      211,356
                                                  -----------   -----------

Cash and cash equivalents (overdraft)
  at  end  of  year                                     5,595        (2,145)
                                                   ==========   ===========

Cash  paid  during  the  year  for:
-----------------------------------

  Interest                                             47,483       260,928
</TABLE>


     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       22
<PAGE>

                         AVIATION GENERAL, INCORPORATED
                      CONSOLIDATED STATEMENT OF CASH FLOWS



Noncash  investing  and  financing  activities
----------------------------------------------

2002
     Exchange  of  common  stock  for  commissions  of  $$38,000.
     Exchange  of  common  stock  of  $45,000  for  Board  of  Directors  fees.






























     See accompanying Summary of Accounting Policies and Notes to Financial
                                  Statements.

                                       23
<PAGE>

                Aviation General, Incorporated and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2003 and 2002


NOTE  A  -  ORGANIZATION  AND  OPERATIONS

     Aviation  General, Incorporated (AGI) was incorporated August 4, 1998 under
the  laws  of  the  State of Delaware, and is the successor to the operations of
Commander  Aircraft  Company  (CAC). AGI is a holding company which, through its
wholly  owned  subsidiaries,  CAC  and  Strategic  Jet  Services,  Inc.  (SJS)
(collectively  referred  to as the Company), manufactures, markets, and provides
support services for single engine, high performance Commander aircraft and to a
lesser  extent  provides  sales  and  service  of  other pre-owned aircraft. The
Company  also  provides consulting, sales, brokerage, and refurbishment services
for  jet  aircraft  through  SJS.

     The Board of Directors of AGI is authorized to issue preferred stock in one
or  more  series. The Board of Directors is further authorized to fix the number
of  shares  constituting  such  series  and  to  fix  the  relative  rights  and
preferences  of  the  shares  of  the  series.

NOTE  B  -  SUMMARY  OF  ACCOUNTING  POLICIES

     A  summary  of  the significant accounting policies consistently applied in
the  preparation  of the accompanying consolidated financial statements follows.

     1.  Principles  of  Consolidation
         -----------------------------

     The  Company  consolidates  the  accounts of its subsidiaries, CAC and SJS.
All  intercompany  balances  and  transactions  are eliminated in consolidation.

     2.  Cash  and  Cash  Equivalents
         ----------------------------

     The  Company  considers all highly liquid debt instruments purchased with a
maturity  of three months or less and money market funds to be cash equivalents.
The  Company  maintains  its cash in bank deposit accounts, which, at times, may
exceed  federally insured limits.  The Company has not experienced any losses in
such  accounts and believes it is not exposed to any significant credit risks on
cash  and  cash  equivalents.  As  of  December  31,  2003  the  Company  had
approximately $5.595 on deposit at one financial institution.  The Company had a
bank  overdraft  of  $(2,145)  at  December  31,  2002.

     3.  Investments
         -----------

     The  Company  had  an  investment consisting of 245,000 shares of Stratesec
Inc.   common   stock   which   had   historically   been   classified   as   an
available-for-sale security and reported at fair value with unrealized gains and
losses  excluded  from  earnings  and  reported  in  other comprehensive income.

     However,  during  2002,  certain  information  has  come  to  the Company's
attention concerning the ability of Stratesec's stock to recover its fair value.
Among  these  are  deteriorating financial condition, the lack of development of
merger  or  acquisition  opportunities  and notification from the American Stock
Exchange  on  July  18,  2002  that  Stratesec  does  not  meet  minimum  equity
requirements  and  is  subject  to  being de-listed. Based on the above facts an
impairment  loss of approximately $396,000 has occurred and has been recorded as
a charge to earnings. At December 31, 2001, unrealized losses, net of income tax
effects,  of  $(253,873)  had  been  recorded in accumulated other comprehensive
income.

                                       24
<PAGE>

     The  components of other comprehensive income (loss) are as follows for the
years  ended  December  31:
<TABLE>
<CAPTION>
                                                  2003          2002
                                                --------   -----------
     Unrealized  holding  gains  (losses)
<S>                                             <C>        <C>
       arising  during  the  period             $      -   $         -
     Less  reclassification  adjustment  for
       net  realized  losses  included  in
       net  income                                     -       253,873
     Income  tax  benefit  (expense)                   -             -
                                                --------   -----------

     Other  comprehensive income (loss)         $      -   $   253,873
                                                =========  ===========
</TABLE>

     4.  Revenue  Recognition
         --------------------

     Sales of aircraft are recognized upon execution and funding of the purchase
agreement  and  transfer  of  title to the buyer, which occurs after the Company
receives  the airworthiness certificate from the Federal Aviation Administration
(FAA).  Additionally,  for  aircraft  financed  by  the  Company it must also be
determined  that  the buyer's initial and continuing investments in the aircraft
are adequate to demonstrate a commitment to pay. Sales of pre-owned aircraft are
recognized upon execution and funding of the purchase agreement. Service revenue
is  recognized  when  the  services  are  performed  and  billable.

     5.  Inventories
         -----------

     Inventories consist primarily of finished goods and parts for manufacturing
and  servicing  of  aircraft.  Inventory  costs include all direct manufacturing
costs  and  applied overhead.  These inventories, other than pre-owned aircraft,
are  stated  at  the  lower  of  cost  or  market, and cost is determined by the
average-cost method.  Pre-owned aircraft are valued on a specific-identification
basis  at  the  lower  of  cost or current estimated realizable wholesale price.
Inventory  components  were  as  follows  at  December  31,  2003:

<TABLE>
<CAPTION>
<S>                                          <C>
     Raw  materials                          $  1,063,298
     Work  in  process                            508,209
     New  and  pre-owned  aircraft                448,958
     Other                                          1,250
                                             ------------
                                             $  2,021,715
                                             ============
</TABLE>

     During  2002  and  2001, certain indirect costs of manufacturing, primarily
excess  capacity  costs,  were considered abnormal and treated as current period
charges  rather  than  as  a  portion  of  inventory costs. Such costs, totaling
approximately $662,000 and $991,000 for 2002 and 2001 respectively, are included
in  cost of sales - aircraft. The Company had no manufacturing activities during
2003.

     During  2002  the  Company  recognized  and  impairment  loss of $1,758,620
associated  with  writing  the  inventory  to  the  lower  of  cost  or  market.

     6.  Property  and  Equipment
         ------------------------

     Depreciation  is  computed  using  the  straight-line  method for financial
reporting  purposes  and  accelerated  methods  for  tax purposes over estimated
useful  lives  of  five  to seven years for vehicles and aircraft, three to five
years  for  office  equipment  and  furniture,  seven to ten years for leasehold
improvements,  and ten to fifteen years for manufacturing equipment and tooling.

                                       25
<PAGE>

     Depreciation  expense  was  $108,918  and  $130,684,  for  2003  and  2002.
respectively.

     7.  Income  Taxes
         -------------

     Deferred  income  taxes  are  provided  on  carryforwards  and on temporary
differences  between  the  tax  basis  of an asset or liability and its reported
amount  in  the  financial  statements that will result in taxable or deductible
amounts  in  future  years.  Deferred  income  tax  assets  and  liabilities are
determined  by  applying  the  presently  enacted  tax  rates  and  laws.

     The  Company  provides for a valuation allowance on deferred tax assets if,
based  on the weight of available evidence, it is more likely than not that some
portion  or  all  of  the  deferred  tax  assets  will  not  be  realized.

     AGI  files  a  consolidated  income  tax  return  with  its  wholly  owned
subsidiaries.

     8.  Refundable  Deposits
         --------------------

     Refundable  deposits  consist of payments made by customers prior to having
repairs  performed  on  their  aircraft and deposits on aircraft being produced.
These  deposits  are  recognized  as  revenue  in  the  period  the services are
completed  or  the  aircraft  sale  is  recognized.

     9.  Earnings  (Loss)  Per  Common  Share
         ------------------------------------

     Basic earnings (loss) per common share are calculated based on the weighted
average  number  of  common  shares  outstanding  during  the  year,  including
redeemable  common  shares.  Diluted  earnings  (loss) per common share has been
computed  based  on  the  assumption  that all dilutive options and warrants are
exercised  using  the  treasury  stock  method.

     10.  Use  of  Estimates
          ------------------

     The  preparation  of the consolidated financial statements requires the use
of  management's estimates and assumptions in determining the carrying values of
certain  assets  and  liabilities  and  disclosures  of  contingent  assets  and
liabilities  at  the  date  of  the  consolidated  financial  statements and the
reported  amounts for certain revenues and expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.

     11.  New  Accounting  Pronouncements
          -------------------------------

     In  2001,  the  Financial  Accounting  Standards  Board  issued  new
pronouncements:  SFAS  No.  144,  Accounting  for  the Impairment or Disposal of
Long-Lived  Assets.

     SFAS  No.  144  is  effective for the Company for the fiscal year beginning
January  1,  2002  and  addresses accounting and reporting for the impairment or
disposal of long-lived assets.  SFAS No. 144 supersedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of,  and  Accounting  Principles  Board Opinion No. 30, Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business.  SFAS
No.  144  retains  the  fundamental  provisions  of SFAS No. 121 and expands the
reporting of discontinued operations to include all components of an entity with
operations  that  can be distinguished from the rest of the entity and that will
be  eliminated  from  the  ongoing  operations  of  the  entity  in  a  disposal
transaction.

     In  April of 2002, the Financial Accounting Standards Board issued SFAS No.
145,  "Recession of FASB Statements Non 4, 44, and 64, Amendment of FASB No. 13,

                                       26
<PAGE>

and  Technical  Corrections.  SFAS  deals  with  reporting  gains and losses for
extinguishment  of debt, accounting for intangible Assets of Motor Carriers, and
sales  and  leaseback  transactions.

     In  June  of 2002, the Financial Accounting Standards Board issued SFAS No.
146  "Accounting  for  Costs  Associated  with Exit or Disposal Activities. This
statement  requires  that  cost  associated with an exit or disposal activity be
recognized  only  when  the  liability  is  incurred.

     In  October  of  2002, the Financial Accounting Standards Board issued SFAS
No.  147  "Acquisition  of  Certain  Financial  Institutions.

     In  December  of 2002, the Financial Accounting Standards Board issued SFAS
No.  148  "Accounting  for  Stock-Based Compensation- Transition and Disclosure.
This statement amends SFAS Non 123 "Accounting for Stock Based Compensation", to
provide  alternative  methods  of  transition for a voluntary change to the fair
value  based  method  of  accounting  for  stock-based  employee  compensation.
transactions.

     In  April of 2003, the Financial Accounting Standards Board issued SFAS No.
149  "Amendment  of  Statement  133   on   Derivative  Instruments  and  Hedging
Activities.  This  statement  amends  and  clarifies  financial  accounting  and
reporting  for derivative instruments and for hedging actives Under FASB Non 133
"Accounting  for  Derivative  Instruments  and  Hedging  Activities.

     Management  believes  adoption  of  these  new statements will not have any
significant  effect  on  the   Company's   financial  condition  or  results  of
operations.

     In  May  of  2003, the Financial Accounting Standards Board issued SFAS No.
150  "Accounting  for Certain Financial Instruments with Characteristics of both
Liability  and  Equity.  This  standard  establishes standards for how an issuer
classifies  and  measures  certain financial instruments with characteristics of
both  liabilities  and  equity.  The  Company has reclassified retroactively its
redeemable  common stock out of the equity section of the accompanying financial
statements.


     12.  Going  Concern
          --------------

     During the years ended December 31, 2003 and 2002, the Company incurred net
(losses)  of  $(1,308,272)  and  $(4,285,111),  respectively. As of December 31,
2003,  the  Company had a negative working capital of $(2,901,540) and a deficit
net  worth  of  $(3,931,847).  On  December  27, 2002 the Company's wholly owned
subsidiary, Commander Aircraft Company, filed petitions for relief under Chapter
11  of  the federal bankruptcy code. These factors raise substantial doubt about
the  Company's  ability  to  continue  as  a  going  concern.

     The ability of the Company to continue as a going concern is dependent upon
the  Company's ability to successfully reorganize Commander Aircraft Company, to
attain  a  satisfactory  level  of  profitability,  and  to  obtain suitable and
adequate  financing.  There  can  be  no  assurance that these objectives can be
achieved.  The  financial  statements  do not include any adjustments that might
result  from  the  outcome  of this uncertainty nor do they take into effect any
adjustments  that  might  occur  as  a result of a successful plan to reorganize
Commander  Aircraft  Company.  See  Note  C  for  further  details.

     13.  Product  Warranties  and  Liability
          -----------------------------------

     The  Company  follows  the  policy  of accruing $5,000 in projected product
warranty  cost  associated  with  each  new  aircraft  sold. Any portion of this
accrual  that  is not used within the five-year warranty period is recognized as

                                       27
<PAGE>

income at the end of the warranty period. Costs exceeding the $5,000 accrual per
plane  are  charged to current operations as they are incurred and an additional
accrual  is  recorded  to  cover  the  remaining  warranty period on that plane.
Warranty  expense for the years ended December 31, 2003 and 2002 were none and ,
$61,052  respectively.

     The  Company  does not carry any product liability insurance and recognizes
product  liability  costs  at such time as a claim arises and an estimate of the
ultimate  liability  associated  with  the  claim  can  be  determined.  Product
liability  costs  for  the  years ended December 31, 2003 and 2002 and 2001 were
none  and  $200,000,  respectively.

     14.  Impairment  of  Long-Lived  Assets
          ----------------------------------

     The  Company  evaluates  long-lived  assets  for  potential  impairment  in
compliance  with  SFAS  No.  144,  Accounting  for the Impairment or Disposal of
Long-Lived  Assets.  The  Company records impairment losses on long-lived assets
used  in  operations  when events and circumstances indicate the assets might be
impaired  and  the  undiscounted  cash  flows estimated to be generated by those
assets  are less than their carrying amounts. The Company has not recognized any
impairment of its long-term assets that might occur as a result of its inability
to  continue  as  a  going  concern.

NOTE  C  -  PETITION  FOR  RELIEF  UNDER  CHAPTER  11

     On  December  27,  2002  the  Company's  wholly owned subsidiary, Commander
Aircraft  Company  (the "Debtor") filed petitions for relief under Chapter 11 of
the  federal  bankruptcy  laws  in  the  United  States Bankruptcy Court for the
District  of  Delaware.  Under  Chapter 11, certain claims against the Debtor in
existence  prior  to  the  filing  of the petitions for relief under the federal
bankruptcy  laws  are  stayed  while the Debtor continues business operations as
Debtor-in-possession.  These  claims  are  reflected  in  the  December 31, 2003
balance sheet as "liabilities subject to compromise." Claims secured against the
Debtor's assets ("secured claims") also are stayed, although the holders of such
claims  have  the  right  to  move  the court for relief from the stay.  Secured
claims  are  secured  primarily  by  liens  on  the Debtor's property, plant and
equipment.

     The  Debtor received approval from the Bankruptcy Court to pay or otherwise
honor  certain  of  its  prepetition  obligations,  including employee wages and
product  warranties  totaling  $75,000.

NOTE  D  -  NOTES  PAYABLE

     Notes  payable  consist  of  the  following  at  December  31,  2003:

<TABLE>
<CAPTION>
<S>                                                                  <C>
     Revolving  credit  facilities  (a)                              $  453,477

     Note  payable  to  individual,  0%  interest,
     payable  at the effective date of confirmation
     of  the bankruptcy plan of reorganization.  200,000                200,000

     Debtor  in  Possession  (DIP)  financing,  10%
     simple  interest, payable at the effective  date
     of  confirmation  of  the  bankruptcy  plan  of
     reorganization.                                                    427,000

     Note  payable  to  an individual, payable
     December 31, 2004.  Convertible to common stock
     at $.85 a share.  Interest due semi annually at
     the end of June and December  until  maturity.
     Collateralized  by  Commander  Aircraft  Company's
     inventory  and  fixed  assets.                                   1,000,000

                                       28
<PAGE>

     Note payable to individual, payable in monthly
     installments of $8,699, including interest  at
     8%,  through  September 30, 2002; uncollateralized                  34,795
                                                                     ----------

                                                                     $2,115,272
                                                                     ==========
</TABLE>

     (a)  The  revolving  credit facilities may be drawn down to manufacture new
          and  purchase pre-owned aircraft. Interest is payable monthly at fixed
          rates  of  8%  to 8.5% with specific draws and accrued unpaid interest
          thereon  generally   due  within   six  months.   The  facilities  are
          collateralized  by  specific new and pre-owned aircraft. The revolving
          credit facilities are subject to certain covenants and the Company was
          not  in compliance with covenants on one of the facilities at December
          31,  2003.  In  the  bankruptcy  plan  of  reorganization  the  credit
          facilities  are  secured  debt  and  are  not  impaired.

NOTE  E  -  DISCLOSURES  ABOUT  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

     The  following methods and assumptions were used to estimate the fair value
of  each  class of financial instruments as of December 31, 2003 and 2002.  Such
information  does  not  purport to represent the aggregate net fair value of the
Company:

     Cash  and  Cash Equivalents. The balance sheet carrying amounts of cash and
     cash  equivalents  approximate fair values of such assets. Note Receivable.
     The  carrying  amount  approximates  fair  value because of the fluctuating
     interest  rate associated  with  the  note  receivable.

     Notes  Payable. The carrying value of notes payable approximates fair value
     because  of  variable  interest  rates  and  the  short-term  nature of the
     instruments.

     All  of  the  Company's  financial  instruments are for purposes other than
trading.  As  of  December  31,  2003,  a  recap  of  the  Company's  financial
instruments  is  as  follows:

<TABLE>
<CAPTION>
                                               Carrying         Fair
                                                amount          value
                                             -----------     -----------
<S>                                          <C>             <C>
     Cash  and  cash  equivalents            $     5,595     $     5,595

     Notes  payable                          $(2,115,272)    $(2,115,272)
</TABLE>

NOTE  F  -  STOCK  OPTION  PLAN

     In  December 1993, the Company approved a stock option plan for issuance of
options  to  purchase  up  to 300,000 shares of common stock to employees at the
discretion  of  the committee appointed by the Board of Directors. The number of
shares  authorized  for  issuance  has  subsequently been increased to 3,300,000
shares.  The  stock option plan also provides for automatic grants of options to
purchase  20,000  shares of common stock to each director on an annual basis. At
December 31, 2003, approximately 1,563,000 shares remain to be granted under the
plan.  The stock options generally vest ratably over a three-year period and the
exercise  price  of all options equaled or exceeded market price of the stock at
the  date  of  grant.

     The Company uses the intrinsic value method to account for its stock option
plan in which compensation is recognized only when the fair value of each option
exceeds  its  exercise price at the date of grant.  Accordingly, no compensation
cost  has  been  recognized  for the options issued.  Had compensation cost been

                                       29
<PAGE>

determined  based  on  the  fair  value  of  the options at the grant dates, the
Company's  net  earnings  (loss)  and  earnings (loss) per share would have been
decreased/increased  to  the  pro forma amounts for the years ended as indicated
below.

<TABLE>
<CAPTION>
                                                  2003             2002
                                              ------------     ------------
     Net  earnings  (loss)
<S>                                           <C>              <C>
       As  reported                           $(1,308,272)     $(4,284,744)
       Pro  forma                              (1,308,272)      (4,397,114)

     Earnings  (loss)  per  share,
     basic  and  diluted
       As  reported                           $      (.18)     $      (.60)
       Pro  forma                             $      (.18)     $      (.62)
</TABLE>

     The  fair  value  of each grant is estimated on the date of grant using the
Black-Scholes  options-pricing  model  with  the  following  weighted-average
assumptions  used  for  grants  in  2003  and  2002,  respectively:  No expected
dividends;  expected volatility of 75% and 75%, risk-free interest rate of 4%and
,  4.3%  and  expected  lives  of  three  years.

     The Black-Scholes options pricing model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable.  In  addition, option valuation models require the input of highly
subjective  assumptions  including  the expected stock price volatility. Because
the  Company's  employee  stock  options   have  characteristics   significantly
different  from  those  of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models  do  not  necessarily  provide a reliable single
measure  of  the  fair  value  of  its  employee  stock  options.

     A  summary  of the status of the Company's stock option plan as of December
31,  2003  and  2002  and  changes  during  the  years  ending on those dates is
presented  below.

<TABLE>
<CAPTION>
                                                  2003                  2002
                                            -------------------  -------------------
                                                       Weighted             Weighted
                                                       average              average
                                                       exercise             exercise
                                             Shares    price      Shares    price
                                            ---------  --------  ---------  --------
<S>                                         <C>         <C>      <C>         <C>
     Outstanding  at  beginning  of  year   2,333,083   $1.49    2,655,550   $1.49
     Granted                                        -   $   -      661,000   $0.33
     Exercised                                      -   $   -            -   $   -
     Expired                                 (770,200)  $2.47     (422,167)  $1.60
     Forfeited                                          $   -     (561,300)  $1.39
                                            ---------   -----    ---------   -----

     Outstanding  at end of year            1,562,883   $0.48    2,333,083   $1.14
                                            =========            =========

     Options exercisable at year end        1,562,883   $0.48    1,672,083   $1.44

     Weighted  average  fair  value  of
       options  granted during the year                 $ .00                $ .17
</TABLE>

     The  following table summarizes information about fixed-price stock options
outstanding  at  December  31,  2003:


                                       30
<PAGE>

<TABLE>
<CAPTION>
                                                   Options  outstanding          Options exercisable
                                          ------------------------------------   ---------------------
                                                         Weighted
                                                          average     Weighted                Weighted
                                             Number      remaining     average     Number      average
                                          outstanding   contractual   exercise   exercisable   exercise
                                          at 12/31/03      life         price    at 12/31/03     price
                                          -----------   -----------   --------   -----------   --------
     Range  of  exercise  prices
<S>                                        <C>              <C>         <C>        <C>           <C>
       $0.33 to $0.50                      1,462,883        .83         $0.42      1,462,883     $0.42
       $1.33  to  $1.50                      100,000        .43         $1.45        100,000     $1.45
                                           ---------                               ---------

                                           1,562,883                               1,562,883
                                           =========                               =========
</TABLE>

NOTE  G  -  LEASES

     The  Company  leases  office  space,  hangar  space,  its manufacturing and
service  facility,  and  certain office equipment under agreements classified as
operating  leases  that  expire  at  various dates through 2004.  Rental expense
under these leases was approximately $175,000 and, $287,000, for the years ended
December  31,  2003  and  2002  respectively.

     The  Company's  lease for office space, hangar space, and its manufacturing
and  service  facility was a revocable permit to lease the facility.  The permit
required  monthly rentals in the same amounts as the original lease.  The permit
further  required  the  Company  to  pay  outstanding  delinquent  amounts  plus
penalties as defined in the permit.   On April 23, 2003, the Company transferred
its  lease  to  a  third party. The Company negotiated a 3.5-year sub-lease with
this  third  party  for  50,011 square feet of manufacturing, service and office
space,  guaranteed renewable at six-month intervals.  The Company also agreed to
pay  $94,359  in  past  due  rent  to  this  third  party.

          The  future  annual  minimum  lease  payments under the April 23, 2003
operating  lease  are  as  follows:

<TABLE>
<CAPTION>
     Year  ending  December  31
<S>                                                           <C>
          2004                                                $113,400
          2005                                                 113,400
          2006                                                  94,500
                                                              --------
     Total  future  minimum  lease  payments                  $321,300
</TABLE>

NOTE  H  -  SALES  CONCENTRATIONS

     The  geographic  sales  of  the  Company's  new  aircraft  are  as follows:
<TABLE>
<CAPTION>

                                          2003                     2002
                                  --------------------     --------------------
                                  Number        Amount     Number        Amount
                                  ------        ------     ------        ------
<S>                                    <C>                   <C>     <C>
     United  States                    -                     6       $3,758,426
</TABLE>

     Pre-owned  aircraft  sold during 2003 in the United States was 12, totaling
$1,347,762.  Brokerage commissions of $65,180 were received in 2003 as a selling
agent  for  pre-owned  aircraft.

     Pre-owned  aircraft  sold during 2002 in the United States was 16, totaling
$3,654,093. Brokerage commissions of $138,482 were received in 2002 as a selling
agent  for  pre-owned  aircraft.

NOTE  I  -  RELATED  PARTY  TRANSACTIONS

     On  May 9, 2001, the Company entered into a $200,000 unsecured note payable
bearing  interest  at  9%  and  due  on  demand with a Company controlled by the
Chairman  of  the  Board  of  Directors.  On  August 3, 2001, the Company issued
200,000  shares  of  common  stock  having  a fair value at the date of issue of

                                       31
<PAGE>

$120,000  in  exchange for a $100,000 reduction in the note payable and interest
expense of $20,000. On October 18, 2001, the affiliate assigned the note payable
with  an  outstanding  balance  of  $85,000  to  a  stockholder.

     During 2001, 130,000 shares of common stock having a fair value at the date
of issue of $78,000 were issued to members of the Board of Directors in exchange
for services provided. During 2002, 115,152 shares of common stock having a fair
value  at  the  date  of issue of $45,000 were issued to members of the Board of
Directors  in  exchange  for  services  provided.

     At  December  31, 2001, amounts payable for brochures and publications to a
company  controlled by the Chairman of the Board of Directors were approximately
$33,000.  Purchases  from  this  entity  were approximately $15,000 for the year
ended  December  31,  2001.  There were no purchases from this entity in 2002 or
2003.

     In prior years, the Company extended financing for aircraft and spare parts
sold  either  directly  to  a  director  of the corporate general partner of the
Company's  majority  stockholder   or  to  an   Authorized  Sales   and  Service
Representative  (ASSR)  owned  by  the  director  under  a  line  of  credit  of
$5,000,000.  The  Company  has  made  efforts to collect amounts owed under this
line,  including  repeated  requests  for  payment, attempts to obtain or cancel
approximately  800,000 shares of common stock of the Company collateralizing the
line  and attempts to block ownership transfers of said shares.  However, during
2001,  the  ASSR went out of business and the individual suffered other business
reversals.  In  addition,  the  individual  resigned from the Company's Board of
Directors  in  2001  and  all  of  his stock options were cancelled.  Due to the
uncertainties  relating to ultimate collectability, during the fourth quarter of
2001,  the Company recorded bad debt expense relating to this line of credit for
the  outstanding  balance  of  $1,529,889.  In  addition,  the Company wrote off
accrued,  unpaid  interest  of  $115,977.  Bad  debt  expense  of  $1,529,889 is
recorded  in  other operating expenses and the write-off of interest of $115,977
is recorded as an offset to interest income in the 2001 statement of operations.
Management  intends  to  continue  to  attempt  to  collect  on amounts owed and
continue  to  attempt to take possession of the common stock collateralizing the
line.

NOTE  J  -  INCOME  TAXES

     No  current  or deferred tax provision (benefit) has been recognized in the
accompanying  statements  of  operations  given  the historical operating losses
incurred.

     Components  of  the  net  deferred  tax assets (liabilities) rounded to the
nearest  thousand  are  as  follows  at  December  31,  2003:

<TABLE>
<CAPTION>
                                                                2003
                                                         --------------
     Deferred  tax  assets  (liabilities)
<S>                                                      <C>
       Note  receivable  from  related  party            $      612,000
       Inventories                                            1,152,000
       Depreciation  and  amortization                          (66,000)
       Accrued  liabilities                                      35,000
          Net  operating  loss  carryforwards                14,100,000
                                                         --------------
                                                             15,833,000
     Valuation  allowance                                   (15,833,000)
                                                         --------------
               Total  deferred  tax  liabilities         $            -
                                                         ==============
</TABLE>

     The  valuation allowance on tax assets increased $476,000 and $1,655,000 in
2003  and  2002,  respectively, primarily due to the generation of net operating
loss  carryforwards  in  both  years.

                                       32
<PAGE>

     The  Company's  net  operating  loss  carryforwards will expire as follows:

<TABLE>
<CAPTION>
     Year  ending  December  31
<S>                                                            <C>
          2005                                                 $  2,998,231
          2006                                                       17,434
          2007                                                    6,466,819
          2008                                                    3,982,473
          2009                                                    4,523,401
          2010                                                    2,279,486
          2011                                                    3,445,366
          2012                                                    1,869,674
          2018                                                    1,681,538
          2019                                                      438,829
          2021                                                    3,298,986
          2022                                                    2,888,549
          2023                                                    1,394,365
                                                               ------------

     Total  net  operating  loss  carryforwards                $ 35,285,151
                                                               ============
</TABLE>

NOTE  K  -  COMMITMENTS  AND  CONTINGENCIES

     The Company is subject to regulation by the FAA.  The Company is subject to
inspections  by  the  FAA  and  may  be  subjected  to fines and other penalties
(including  orders  to cease production) for noncompliance with FAA regulations.
The  Company  has  a Production Certificate from the FAA, which delegates to the
Company  the  inspection  of  each  aircraft.  The sale of the Company's product
internationally  is  subject  to  regulation  by  comparable agencies in foreign
countries.

     The  Company  faces  the  inherent  business  risk  of  exposure to product
liability claims. In 1988, the Company agreed to indemnify a former manufacturer
of  the  Commander  single  engine  aircraft against claims asserted against the
manufacturer with respect to aircraft built from 1972 to 1979. In 1994, Congress
enacted  the  General  Aviation Revitalization Act, which established an 18-year
statute  of repose for general aviation aircraft manufacturers. This legislation
prohibits  product  liability  suits  against  manufacturers  when  the aircraft
involved  in  an  accident  is  more  than 18 years old. This action effectively
eliminated  all  potential  liability  for  the Company with respect to aircraft
produced  in  the  1970s.  The Company's product liability insurance policy with
coverage of $10 million per occurrence and $10 million annually in the aggregate
with  a  deductible  of  $200,000  per  occurrence and annually in the aggregate
expired  March  1, 1995. Subsequent to March 1, 1995, the Company is not insured
for  product  liability  claims.

     During 2001, the Company executed an employment contract with its President
and  Chief  Executive  Officer through August 2006 that provides for a specified
annual  salary,  subject  to  periodic  adjustments  and incentives.  Should the
Company terminate this executive without cause (as defined), the Company will be
obligated  to  pay  the  executive  an  amount  equal to his salary in effect at
termination  through  the  expiration  of  the  term of the agreement.  Further,
should  a termination without cause occur within two years following a change in
control  (as  defined),  the Company will pay the executive an additional amount
equal  to  2.99 times the executives salary in effect at the time of such change
in     control.  The  contract  also  includes  a  noncompete  clause  effective
throughout  the  term  of  the  employment contract and for a period of one year
thereafter.

     The  Company  is routinely involved in various legal matters arising in the
normal course of business. Management believes that losses, if any, arising from
such  actions  will not have a material adverse effect on the financial position
or  operations  of  the  Company.

                                       33
<PAGE>

On September  24,  2002  the Company's common stock was delisted from the Nasdaq
SmallCap  Market  and  began  trading on the Over-the-Counter Bulletin Board, or
OTCBB,  under  the  symbol  AVGE.OB  due to the Company's noncompliance with the
applicable  minimum  asset  and  equity  requirements  and the minimum bid price
requirement.

NOTE  L  -  REDEEMABLE  COMMON  STOCK

     On  October  3, 2001, the Company, pursuant to an agreement, issued 150,000
shares  of  common stock. Under the agreement, the Company will be obligated for
the  difference  between  the net proceeds to the holder and $150,000 should the
holder  elect  to sell the shares within 12 months of such shares becoming fully
tradable  or  if such shares cannot be sold or are not fully  tradable within 13
months of issuance the Company is obligated to buy back the shares for $150,000.
As  such,  during 2001, the Company recorded redeemable common stock of $150,000
for  the  estimated  fair  market  value of the redeemable securities issued. In
accordance with the provisions of Financial Accounting Standards Board Statement
No 150  "  Accounting  for Certain Financial Instruments with Characteristics of
both  Liabilities and Equity, this redeemable common stock has not been included
in  the  equity  section  of  the  financial  statements.

NOTE  M  -  STOCKHOLDERS'  EQUITY

     In  connection with the following Shareholder Rights Agreement, the Company
created a series of 100,000 shares of preferred stock, par value $.01 per share,
designated  as Series A Junior Participating Preferred Stock (Series A Preferred
Stock).

     During  2001,  the Company adopted a Shareholder Rights Agreement providing
each  outstanding share of common stock with a Series A preferred share purchase
right  (right)  that expires in July of 2011.  Each right entitles the holder to
purchase one one-thousandth of a share of Series A preferred stock at a price of
$10  per  one one-thousandth of a share of Series A preferred stock.  The rights
will  generally  become exercisable only if a person or group (acquiring group),
excluding  the  Company's largest stockholder, acquires, without approval of the
Company's  Board  of  Directors,  15%  or  more of the Company's common stock or
announces a tender offer with the intention to do the same.  Upon exercise, each
holder,  excluding  the  acquiring  group,  will receive the number of shares of
common  stock  having a value equal to two times the exercise price of the right
or  one  one-thousandth  of  a share of Series A preferred stock.  The number of
shares  issuable  upon  exercise  of  rights  is subject to certain antidilution
adjustments.  Generally,  the  rights may be redeemed by the Company at $.01 per
right.  The  rights  are  non-participating  and  non-voting  until  exercised.

     Series  A  preferred stock issued, if any, upon exercise of the rights will
be entitled to the greater of a cumulative quarterly dividend payment of $10 per
share  when,  and  if,  declared or 1,000 times the dividend declared per common
share.  In  the  event of liquidation, the Series A preferred share holders will
be  entitled to the greater of $1,000 per share or an aggregate payment of 1,000
times  the aggregate payment per common share.  Each share of Series A preferred
stock  will  be  entitled  to  1,000  votes  on  all  matters  submitted  to the
stockholders.  The  Series  A  preferred  stock  will  not  be  redeemable  or
convertible  into  common  stock  or  any  other  security  of  the  Company.

NOTE  N  -  EMPLOYEE  BENEFIT  PLANS

     The  Company  discontinued  its  profit  sharing 401(k) plan in 2002. While
effective, the plan covered substantially all employees. Eligible employees were
able  to  contribute up to 15% of their compensation. The Company contributed an
amount  equal  to at least 25% of each employee's contributions not in excess of
10%  of  compensation,  with  additional  contributions  made  at  the Company's
discretion.  Expense  under  the  plan  was  approximately  $19,000  for  2002.

                                       34
<PAGE>

     Through  December  31,  2001,  the  Company  had a contributory health care
benefit  plan  covering substantially all employees and eligible dependents. The
plan  provided  for  covered  major  medical expense benefits subject to certain
deductibles,  coinsurance provisions, and lifetime maximums. Through October 31,
2001,  the  plan  had  certain stop-loss coverage under an insurance policy that
provided  for  payments  of  covered  benefits in excess of $25,000 per year per
covered  person. The policy also provided an aggregate monthly stop-loss for the
plan  based  on  number of covered persons. Effective October 31, 2001, due to a
lapse  in  insurance  coverage,  the  Company  became uninsured on this plan for
benefit  claims  occurring through December 31, 2001. As of January 1, 2002, the
Company  terminated  its  employee  health care benefits. Management has accrued
amounts,  which  it  believes  are  sufficient  to  cover  claims  for incidents
occurring  from  October  31,  2001  through  December  31,  2001

NOTE  O  -  SEGMENT  INFORMATION

     The  Company   operates  in   the  segments   of  piston   engine  aircraft
manufacturing  sales  and  service and jet aircraft brokerage and refurbishment.
Information  concerning the Company's reportable segments are as follows for the
years  ended  December  31:

<TABLE>
<CAPTION>
                                                          2003          2002
                                                     ------------   -----------
     Revenues
<S>                                                  <C>            <C>
       Jet aircraft brokerage and refurbishment      $      1,857   $   122,732
       Aircraft  sales  and  service                    2,139,877     8,320,684
                                                     ------------   -----------

       Total                                         $  2,141,734   $ 8,443,416
                                                     ============   ===========

     Operating  income  (loss)
       Jet  aircraft brokerage and refurbishment     $      1,857   $    19,732
       Aircraft  sales  and  service                   (1,310,129)   (3,410,650)
                                                     ------------   -----------

         Total                                       $ (1,308,272)  $(3,390,918)
                                                     ===========    ===========

     Assets
       Jet aircraft brokerage and refurbishment      $          -   $         -
       Aircraft  sales  and  service                    2,424,338     3,715,022
                                                     ------------   -----------

         Total                                       $  2,424,338   $ 3,715,022
                                                     ============   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                   Jet aircraft
                                                   brokerage and  Aircraft sales  Consolidated
                                                   refurbishment   and  service      total
                                                   -------------  --------------  ------------
     Other  significant  items  -  2003:
<S>                                                 <C>             <C>             <C>
       Interest  income                             $       -       $       -       $       -
       Interest  expense                                    -         148,850         148,850
       Depreciation  and  amortization                      -         108,918         108,918
       Expenditures  for  long-lived  assets                -               -               -

     Other  significant  items  -  2002
       Interest  income                             $       -       $   1,929       $   1,929
       Interest  expense                                    -         243,414         243,414
       Depreciation  and  amortization                      -         130,684         130,684
       Expenditures for long-lived assets                   -               -               -
</TABLE>

                                       35
<PAGE>

NOTE  P  -  EARNINGS  (LOSS)  PER  SHARE

     The following table sets forth the computation of earnings (loss) per share
and  earnings  (loss)  per  share  assuming  dilution  at  December  31:

<TABLE>
<CAPTION>
                                                         2003           2002
                                                     ------------   ------------
     Numerator
<S>                                                  <C>            <C>
     Net  earnings  (loss)                           $(1,308,272)   $(4,284,744)

     Denominator  for  earnings  (loss) per share
     Weighted average shares outstanding, basic        7,110,846      7,143,250
     Effect of dilutive securities - stock options             -              -
                                                     -----------    -----------

     Denominator  for earnings (loss) per
       share assuming dilution                         7,110,846      7,143,250
                                                     ===========    ===========

     Earnings  (loss) per share, basic               $      (.18)   $      (.60)
                                                     ===========    ===========

     Earnings (loss) per share, assuming dilution    $      (.18)   $      (.60)
                                                     ===========    ===========
</TABLE>

     Outstanding  options  of  1,562,883  and  2,655,550,  for  the  years ended
December  31,  2003,  and  2002, respectively, have been excluded from the above
calculations  as  they  would  be  antidilutive.

NOTE  Q  -  MANAGEMENT  PLANS

     During  the second half of 2002, the Company experienced an abrupt lull and
slowdown  of  its business, evidenced by cancellation or postponement of several
new  and  pre-owned aircraft orders and the absence of prospective new business.
Management continued to reduce its overhead expenses including employee layoffs,
terminating  the  business  operations  of  Strategic  Jet  Services,  Inc., and
suspending  new  aircraft  production.

     On December 27, 2002, Commander Aircraft Company filed a voluntary petition
under  Chapter  11  of  the  United  States  Bankruptcy Code for the District of
Delaware.  Management's  plan  was  to  go  forward  and:

     - Continue CAC's operations and provide service and support to the fleet of
       Commander  aircraft  owners, refurbishment services, parts, and pre-owned
       aircraft brokerage.
     - Secure  adequate  Debtor  in Possession ("DIP") financing to allow CAC to
       continue  to  operate.
     - Develop,   secure,  and  establish   investor  funding  for  a  financial
       reorganization  plan  that  would  allow  CAC  to  emerge from bankruptcy
       to the satisfaction  of  its  creditors  and with minimal dilution to its
       shareholders.

     Management  has been successful in fulfilling these objectives, culminating
in  a  court-confirmed  reorganization  plan,  dated December 10, 2003, with the
effective  date scheduled for on or before March 31, 2004, unless extended, with
Tiger  Aircraft  LLC or affiliate, which has been providing CAC with interim DIP
financing,  as  the  investor.

     Pursuant  to  the confirmed bankruptcy plan and agreement with Tiger, Tiger
will  invest  approximately  $2.8  million  in Aviation General, Incorporated in
return  for  an  80% ownership interest in AGI. Approximately $2 million will be
used  to settle with creditors in accordance with CAC's bankruptcy plan, and the
remainder  will  be  used  for  working  capital. Pursuant to the agreement with

                                       36
<PAGE>

Tiger,  AGI  must  secure the approval of the agreement from its shareholders as
well  as their authorization to amend the Company's Certificate of Incorporation
to  increase  the  Company's  authorized common shares from 20,000,000 shares to
100,000,000  shares.   The  Company   currently  has  20,000,000  common  shares
authorized  and  approximately 7,000,000 common shares (excluding Treasury stock
which  will  be  retired)  issued and outstanding. The agreement with Tiger will
necessitate  the issuance of approximately 28,000,000 new common shares of stock
to  Tiger,  resulting  in  a total of approximately 35,000,000 shares issued and
outstanding.

     CAC  plans  to resume new aircraft production following the consummation of
the  transaction with Tiger and proceed to operate within the business model and
strategies  articulated  in  this  document.

NOTE  R  -  SUBSEQUENT  EVENTS

     On  December  10,  2003  the  Company's  wholly owned subsidiary, Commander
Aircraft  Company  (Commander),  received confirmation of the First Amended Plan
under  Chapter  11  of the Bankruptcy Code filed by Commander on July 5, 2003 as
amended on July 30, 2003 and December 10, 2003. The plan outlines the classes of
claims  and  their  treatments  as  follows:

          Class  A  (Administrative  Claims). Class A consists of Administrative
     Claims,  including  Professional  Claims,  whether  secured  or  unsecured,
     including  the  Debtor  in  Possession Loan. Claims in Class A approved and
     Allowed  by  the  Court shall be paid in full, in cash, by Commander on the
     Effective  Date of the Plan or as soon thereafter as the amount thereof can
     be fixed, unless a different treatment is agreed to or provided for in this
     Plan. Administrative Claims which by their terms are not due and payable on
     or  before  the Effective Date shall be paid as and when due. This class is
     not  impaired.  As  of December 31,2003 the Company had $350,000 in Class A
     claims  payable.

          Class  B  (Priority Claims). Class B consists of Priority Claims under
     11  U.S.C.  507  other  than Administrative Claims and Priority Tax Claims.
     Allowed  Claims  in Class B shall be paid in full, in cash, by Commander on
     the  Effective Date of the Plan or as soon thereafter as the amount thereof
     can  be fixed, unless a different treatment is agreed to or provided for in
     this  Plan. This class is not impaired. As of December 31, 2003 the Company
     had  $112,000  in  Class  B  claims  payable.

          Class C (Priority Tax Claims). Class C consists of Priority Tax Claims
     Pursuant  to  11 U.S.C. 507(a)(8). In full and complete satisfaction of the
     obligation  of  Commander and all co-debtors (including responsible parties
     against  whom trust fund taxes have been or may potentially be assessed) on
     Claims  in  Class  C,  such  claims  shall be paid in full in deferred cash
     payments,  with  simple interest at 6% p.a. running from the Effective Date
     of  the  Plan  until  paid, amortized over 20 equal quarterly payments. Any
     contrary  interpretation  of  the   foregoing   provision  notwithstanding,
     Commander  shall pay each Class C claim or relevant portion thereof in full
     on  or  before the sixth anniversary of the assessment date of each portion
     of such claim; provided, however, that any Creditor to which this provision
     applies  must  apply  all  payments on Class C claims to such claims in the
     order  of  assessment. If a holder of a Class C claim declares Commander to
     be  in  default  of  Commander's obligations to it under the Plan, and such
     default  is  not  cured  within  20 days after receipt by Commander and its
     counsel  of the notice thereof by certified mail, then the entire liability
     shall  become  immediately  due and payable, and such creditor may exercise
     any  rights  available  under applicable non-bankruptcy law to collect such
     liability  from  Commander  or  any  co-debtor  or responsible party. As of
     December  31,  2003  the  Company  had  $150,000 in Class C claims payable.

          Class  D  (Secured  Claim of Nyltiak). Class D consists of the secured
     pre-petition  claim of Nyltiak Investments, LLC. The holder of the claim in
     Class  D  shall retain its pre-petition lien on the Commander's Assets, and
     Commander  shall  cure any pre- and post-petition arrearages (including all
     accrued  interest at the non-default rate, fees, and other charges) in cash
     on  the Effective Date of the Plan, and shall, on the Effective Date of the
     Plan,  make  a  payment  in  the amount necessary to reduce the outstanding

                                       37
<PAGE>

     balance  to  $500,000,  which  shall fully satisfy the replacement lien and
     administrative  claim.  Any  non-monetary  defaults  of  Commander  and any
     co-Debtor  existing on the Petition Date and/or the Effective Date shall be
     waived  and  deemed  cured,  with all interest paid at the non-default rate
     with  no  late fees. All pre-payment penalties shall be waived. Thereafter,
     Commander shall pay the claim in accordance with the contract terms, except
     that the following terms of the loan documents dated July 22, 2002 shall be
     deleted  and  of no further force or effect as to any party or guarantor to
     said  documents:  Securities  Purchase  Agreement,  Section 4 ("Covenants,"
     including  reservation  of shares), Section 5 ("Right of First Offer"), and
     Section  6  ("Transfer  Agent  Instructions");  Secured  Convertible  Note,
     Article  I  (option to convert note into AGI shares), Article III, Sections
     3.2  and  3.2 (Redemption), Article IV, Section 4.2 (default for failure to
     issue  conversion shares), and Article V, Section 5.10 (notice of corporate
     events); and the entirety of the Investor Rights Agreement. Tiger Aircraft,
     LLC,  shall  provide  an  additional guaranty to the Nyltiak loan in a form
     substantially similar to that of the existing guarantors. Provided payments
     hereunder are not in default, the Debtor may sell Inventory in the ordinary
     course  of business free and clear of the lien of Nyltiak, which lien shall
     be  replaced  by  a replacement lien on Inventory of the types to which its
     pre-petition  lien  attaches,  manufactured  or acquired after the Petition
     Date, in an amount equal to the value of the Nyltiak lien on Inventory sold
     after  the  Petition Date. This class is impaired. As of December 31, 2003,
     the  Company  had  $650,000  in  Class  D  claims  payable.

          Class  E  (Secured Claim of the IRS). Class E consists of the claim of
     the  Internal  Revenue  Service secured by a pre-petition tax lien. In full
     and complete satisfaction of the obligation of Commander and all co-debtors
     (including  responsible  parties  against  whom  trust  fund  taxes  may
     potentially  be assessed) on the claim in Class E, the holder of such claim
     shall retain its pre-petition lien until paid in full, and such claim shall
     be  paid in full in deferred cash payments, with simple interest at 6% p.a.
     running  from  the Effective Date of the Plan until paid, amortized over 20
     equal quarterly payments. If a holder of a Class E claim declares Commander
     to  be in default of Commander's obligations to it under the Plan, and such
     default  is  not  cured  within  20 days after receipt by Commander and its
     counsel  of the notice thereof by certified mail, then the entire liability
     shall  become  immediately  due and payable, and such creditor may exercise
     any  rights  available  under applicable non-bankruptcy law to collect such
     liability  from  Commander  or any co-debtor or responsible party. Provided
     payments  hereunder are not in default which has not been cured as provided
     in  the  preceding  sentence,  Commander may sell inventory in the ordinary
     course  of business free and clear of the lien of the IRS, which lien shall
     be  replaced  by  a  replacement lien on inventory manufactured or acquired
     after  the Petition Date in an amount equal to the value of the IRS lien on
     inventory  sold after the Petition Date, said replacement lien to be junior
     to  the  lien  of  Nyltiak  on  inventory  of  the types to which Nyltiak's
     pre-petition  lien  attaches.  This  class  is impaired. As of December 31,
     2003,  the  Company  had  $552,891  in  Class  E  claims  payable.

          Class  F  (Secured  Claim  of  Uptown  Bank).  Class F consists of the
     secured  claim  of  Uptown  National  Bank  of  Chicago or its successor in
     interest, Bridgeview Bank and TrustIn full and complete satisfaction of the
     obligation  of  Commander  and  all co-debtors on the claim in Class F, the
     holder  of  the  claim  in  Class  F  shall retain its pre-petition lien on
     Commander's  assets,  and  Commander  shall  pay interest and other accrued
     charges  through  the  Effective  Date  at the contract rate in cash on the
     effective  date  of the Plan. Thereafter, interest shall accrue at the rate
     of 8% p.a. on the outstanding principal balance allocable to each aircraft.
     Upon  the  sale  of  any  aircraft  which is Collateral for this claim, the
     Debtor  shall pay the loan balance allocable to such aircraft in full, with
     all accrued interest and other charges, and the lien on such aircraft shall
     thereupon  be  released. Each 6 months after the Effective Date, the Debtor
     shall  pay  all  accrued interest to date, plus a curtailment of 10% of the
     then-outstanding  principal  balance. In the event any portion of the claim
     remains  unpaid on the second anniversary of the Effective Date, the Debtor
     shall,  as  to  each aircraft which is Collateral for the Claim, either (a)
     fully  pay  in cash the balance of the claim allocable to such aircraft, or
     (b)  surrender the aircraft to the Holder of the Claim in full satisfaction
     of  the  claim  allocable  to  such aircraft. This class is impaired. As of
     December  31,  2003,  the  Company  had $453,477 in Class F claims payable.

          Class  G  (Any  other  Secured Claim). Class G consists of any Allowed
     Secured  Claim  other than those in Classes A, D, E, F, J, or L. Any holder
     of  an  Allowed  Claim  in  Class  G  shall retain its pre-petition lien on
     Commander's  Assets,  and  Commander  shall cure any pre- and post-petition
     arrearages  in  cash on the Effective Date of the Plan (such that the claim
     of  the U.S. Department of Labor and any other such claim due in full under
     the  terms thereof will be paid in cash on the Effective Date of the Plan).
     Any dispute as to the allowance of such Claim or the amount thereof, and/or
     the  amount  necessary  to  cure  such arrearages shall be submitted to the
     Court  for  determination, with any undisputed amount paid on the Effective
     Date  of  the  plan  and  any additional amount upon entry of a Final Order
     fixing  the  amount thereof. Any non-monetary defaults of Commander and any
     co-Debtor  existing  on  the

          Petition  Date  and/or  the  Effective Date shall be waived and deemed
     cured.  Thereafter,  Commander  shall  pay the claim in accordance with the
     contract  terms  or  applicable  law. With respect to the claim of the U.S.
     Department  of  Labor,  to  the  extent of payments made under Classes B, I
     and/or J directly to the employees on whose behalf or for whose wages which
     the  Department of Labor claim was brought, such payments shall be credited
     to  the payment due on such claim to the Department of Labor. To the extent
     that the amounts reflected in the USDOL claim are not paid (either directly
     or  to  the  wage  claimants  as  provided  herein)  in full in cash by the
     Effective  Date,  the USDOL, seven days after written notice to the debtor,
     shall  exercise  any and all of its administrative and judicial remedies to
     collect  any  amounts  due  the USDOL from any debtor or non-debtor without
     further Court Order. This class is not impaired as of December 31, 2003 the
     Company  had  $78,841  in  Class  G  claims  payable.

          Class  H  (Unliquidated tort/warranty claims for pre-petition personal
     injury,  property  damage,  or  wrongful or death). Class H consists of all
     tort  and  warranty claims for personal injury, property damage or wrongful
     death  that  were  unliquidated  or  in litigation as of the Petition Date,
     including  any  subrogation claims. The claim(s) in Class H shall be paid a
     total  of $100,000.00 in cash on the Effective Date in full satisfaction of
     their claim(s) against Commander and Aviation General, Incorporated. In the
     event more than one such claim is filed before the Bar Date and is allowed,
     such  amount  shall  be  placed  in  an  interest-bearing account until the
     allowed  amount  of  the  Class  H  claims is liquidated, such amount to be
     divided pro rata among the holders of such claims upon liquidation thereof.
     If  there  are  no  such  claims  ultimately allowed, or if such claims are
     allowed in an amount such that the Class H claims would receive less than a
     total of $100,000 were they included in Class I, the Debtor shall apply the
     $100,000  to the payment of the Class I Claims and the Class H Claims shall
     be  treated  as  Class  I claims. In the event that Class H votes to accept
     this Plan, no holder of a Class H claim objects to this Plan or appeals the
     Confirmation  Order,  and  the  holders  of  all Class H claims agree on or
     before the Effective Date on allocation of payments to the holders of Class
     H  claims,  the  total  payment to the holder(s) of Class H claims shall be
     increased  to  $200,000.00  and shall be paid on the Effective Date in full
     satisfaction  of  such  claims.  This class is impaired. As of December 31,
     2003,  the  Company  had  $200,000  in  Class  H  payables.

          Class  I  (General  Unsecured  Claims).  Class I consists of Unsecured
     Non-Priority Claims other than those in Class H, J, or L. General unsecured
     claims  shall  be  paid  as  follows:  $500,000  shall  be  placed  in  an
     interest-bearing  bank account on the Effective Date of the Plan, and shall
     be  distributed pro rata to the holders of allowed Class I claims within 30
     days of the Effective Date. The pro-rata share of the claimed amount of any
     claims  which  are then subject to objections as to which a Final Order has
     not  been  entered  shall remain in the bank account until a Final Order is
     entered.  When  Final  Orders  are  entered  disallowing  or  allowing  and
     liquidating  all  Class  I  claims, the remaining funds in the bank account
     shall  be  distributed  to the holders of all Class I claims pro rata. This
     class  is  impaired. As of December 31, 2003, the Company had $1,810,000 in
     Class  I  payables.

                                       38
<PAGE>

          Class  J  (Small  Claims  administrative  convenience  class). Class J
     consists  of  any Claims (other than Class K or L claims) in an amount less
     than $500.00, or as to which the holder thereof elects to receive treatment
     as  a  Class J claim. Class J claims shall be paid in cash on the Effective
     Date  of the Plan in the allowed amount thereof (or $500.00 in the event of
     holders  of  claims  in other classes electing treatment under Class J), in
     full  satisfaction  of  such  claims.  This  class  is  not impaired. As of
     December  31,  2003,  the  Company  had  $12,500  in  Class  J  payables.

          Class  K  (Equity  Claims).  Class K consists of any Claims based upon
     Equity  Interests. The existing stock of the Debtor, 100% of which is owned
     by  Aviation  General,  Incorporated,  shall  be  cancelled.  This class is
     impaired.

          Class  L  (Corporate Family Claims). Class L consists of any Claims of
     Aviation General, Incorporated, and/or Strategic Jet Services, Inc. Class L
     claims shall be discharged and shall not be paid; in consideration thereof,
     all  claims  of  Commander  and  the  Estate  against  Aviation  General,
     Incorporated ("AGI"), and/or Strategic Jet Services, Inc. ("SJS"), existing
     as  of  the Confirmation Date shall be released. Nothing in this plan shall
     relieve  AGI  or SJS of any obligation to the Debtor expressly set forth in
     this  Plan,  nor  of  any  obligation  owed  directly  to  any  Creditor.

     Commander  will  fund  this  Plan primarily from the issuance of new stock.
Commander's  existing  100% shareholder, Aviation General, Incorporated ("AGI"),
has  agreed  to  purchase,  on the Effective Date of the Plan, 2000 newly-issued
shares  of the stock of Commander, which stock shall be sold to it for $1000 per
share  ($2,000,000).  Such shares shall not be subject to Nyltiak's lien. To the
extent  additional  funds  are  needed  to  implement  this  Plan or for working
capital,  AGI  has  agreed  to  purchase at that same price up to 800 additional
shares  of  stock of Commander ($800,000), upon the request of Commander, at any
time  during  the  5  years  after  the  Effective  Date  of  the  Plan.

     AGI shall fund this acquisition through the sale to Tiger Aircraft, LLC, of
shares  constituting  80% of the share capital of AGI for a total purchase price
of  $2.8  million  (of  which $2.3 million will be paid in cash on the effective
date  and  $500,000 in a demand note at 6% interest). Tiger shall also guarantee
payment of the remaining claim in Class D, and shall guarantee AGI's performance
of  Commander's  option  to  sell  the  800  additional  Commander  shares  at
$1000/share.

     "Effective  Date" means March 31, 2004, or such earlier date as Tiger, AGI,
and  Commander  may jointly agree upon, provided that the Effective Date may not
be  earlier  than  the first Business Day after the Confirmation Order becomes a
Final Order. The date of March 31, 2004, may be extended only on written consent
of  counsel  for  the  Creditors  Committee,  counsel for the U.S. Department of
Labor,  and  counsel  for Nyltiak Investments, LLC. In the event that Tiger does
not  close  under  the Stock Purchase Agreement by March 31, 2003 (or such later
date  as  may  be  agreed by the Debtor, AGI, Tiger, the Committee, the DoL, and
Nyltiak),  this  Confirmation  Order  shall  be  void and of no further force or
effect


     The  following  is a summary of the quarterly results of operations for the
years ended  December  31:

<TABLE>
<CAPTION>
                                                       2003
                               ---------------------------------------------------
                                              Three  months  ended
                               ---------------------------------------------------
                                March  31   June  30   September  30  December  31
                               ----------  ----------  -------------  ------------
<S>                            <C>         <C>           <C>          <C>
     Total  net  sales         $  312,361  $  770,235    $  823,107   $  236,031
     Gross  margin                 60,256     140,522        84,656       52,131
     Net  loss                   (316,866)   (339,156)     (249,376)    (402,874)
     Net loss per share,
       basic and diluted            (0.04)      (0.05)        (0.04)       (0.06)
</TABLE>

                                       39
<PAGE>

<TABLE>
<CAPTION>
                                                       2002
                               ---------------------------------------------------
                                              Three  months  ended
                               ---------------------------------------------------
                                March  31   June  30   September  30  December  31
                               ----------  ----------  -------------  ------------
<S>                            <C>         <C>           <C>          <C>
     Total  net  sales         $1,504,821  $4,729,309    $ 1,674,338  $   534,948
     Gross  margin                272,232     108,986         47,220      505,543
     Net  loss                   (290,185)   (411,956)    (1,288,804)  (2,294,166)
     Net loss per share,
       basic and diluted            (0.04)      (0.06)         (0.18)       (0.32)
</TABLE>

          The sum of per-share amounts for the four quarters may differ from the
     annual  per  share  amounts  due  to  rounding  and  the required method of
     computing  weighted  average  number  of  shares in the respective periods.


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

On November 4, 2003, the Aviation General, Incorporated appointed Murrell, Hall,
--------------------------------------------------------------------------------
McIntosh  &  Co  PLLP  as  its  independent  auditors.
------------------------------------------------------

     On  February  14,  2003,  Grant Thornton LLP ("Grant Thornton") resigned as
independent auditors of Aviation General, Incorporated (the "Registrant"). Grant
Thornton  advised the Registrant that the reason for its resignation was that it
had  determined  that in light of the Registrant's financial condition and size,
the  Registrant  does  not  meet  Grant  Thornton's  current  criteria  for
public-company  audit  clients.

     The reports of Grant Thornton as of and for the fiscal years ended December
31,  2001 and 2000 did not contain an adverse opinion or a disclaimer of opinion
and  were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that the report on the Registrant's 2001 financial statements
contained  an  explanatory  paragraph  describing  an  uncertainty  about  the
Registrant's ability to continue as a going concern. During the two fiscal years
ended  December  31,  2001,  and  during the subsequent interim periods prior to
February  14,  2003,  there were no (i) disagreements between Grant Thornton and
the  Registrant  on  any matter of accounting principles or practices, financial
statement  disclosure,  or  auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Grant Thornton, would have caused it to make
a  reference  to  the  subject matter of the disagreement in connection with its
reports on the Registrant's financial statements, or (ii) events as described in
Item  304(a)(1)(v)  of Regulation S-K under the Securities Exchange Act of 1934,
as  amended,  except  as  described  below.

     On  February 21, 2003, the Registrant filed a report on Form 8-K disclosing
the  resignation of Grant Thornton, and on March 7, 2003 the Registrant filed an
amendment  to  the  report  on  Form  8-K.  The March 7 amendment included as an
exhibit  a  letter  from  Grant  Thornton dated March 5, 2003. The Registrant is
further  amending  the  report  on  Form  8-K  to  include under this Item 4 the
following  language,  which  was  contained  in  Grant Thornton's March 5 letter
previously filed as an exhibit. References to "we" and "us" in this excerpt from
Grant  Thornton's  letter  refer  to  Grant  Thornton.

     "On  January  10, 2003, the Registrant filed a Form 10-QSB/A for the period
ended  June  30,  2002,  in  which  the  Registrant  reported  that:

          During the preparation of the third quarter 2002 financial statements,
     management  identified  certain  excess  capacity  costs  of  approximately

                                       40
<PAGE>

     $662,000  which  were capitalized as work in process inventories as of June
     30,  2002.  Management  believes  these  costs were incurred primarily as a
     result  of  the  reduced  manufacturing  environment  and  should have been
     expensed  during  the  second  quarter  2002.

     Management reported this improper capitalization to us in November 2002. By
way  of  a  letter  dated February 14, 2003 (Internal Control Communication), we
notified  the  Registrant's  Management  and  Audit Committee of certain matters
involving internal control and its operation that we considered to be reportable
conditions  under  standards  established by the American Institute of Certified
Public  Accountants.  More  particularly,  we informed them that "the reportable
condition  relating  to  `work  in process inventory [that] included significant
excess capacity costs that should have been expensed as incurred,'" in our view,
constituted  "a  material  weakness"  We  also  noted  in  our  Internal Control
Communication  that:

          We  have  been  informed  that  management  took  appropriate remedial
     actions  to  amend  the  second  quarter  interim  financial statements and
     implemented additional controls to provide reasonable assurance that excess
     capacity  costs  are  expensed  and  not  capitalized  as  work  in process
     inventory.

     Separately,  and  in addition to the matter involving the capitalization of
excess  capacity  costs,  we  also pointed out in our February 14, 2003 Internal
Control Communication that the Registrant's "current principal financial officer
and existing accounting department staff may lack the requisite expertise needed
for  assessing  and  applying  new and non-routine accounting principles and for
preparing  required  financial  and  SEC  reporting  disclosures"  and  made
recommendations  for  improvement."

     We  have  responded  to this concern by engaging the services of an outside
Certified  Public  Accountant  on  a  consulting  basis  to assist our principal
financial  offer  with assessing and applying new and non-routine principles and
in  preparing  financial  and  SEC  reporting  disclosures.

     The  Registrant  furnished  Grant Thornton with a copy of this amendment to
its report and requested it to furnish the Registrant with a letter addressed to
the  Commission  stating  whether  it  agrees  with  the  statements made by the
Registrant in response to Item 304(a) of Regulation S-K and, if not, stating the
respects  in which it does not agree. A copy of Grant Thornton's letter is filed
as  Exhibit  16  to  the  amendment  to  Form  8-K.


                                    PART III
                                    --------

     Certain  information  required  by  Part III is omitted from this report in
that  registrant  will  file a definitive proxy statement pursuant to Regulation
14A  for  its  2004  Proxy  Statement,  and  the information included therein is
incorporated  by  reference.

Item  10.  Directors  and  Executive  Officers  of  the  Registrant
-------------------------------------------------------------------

     Wirt  D.  Walker, III, age 57, has served as a director of the Company from
September 1989 to February 1991, as Chairman of the Board of Directors since May
1991  and  as  Chief  Executive  Officer  since June 1998. Mr. Walker previously
served as the Company's Chief Executive Officer from May 1991 to August 1991 and
from  December 1992 to May 1995. Since 1982, Mr. Walker has served as a director
and  the  Managing  Director of KuwAm Corporation, a private investment firm. He
served  as  Chairman  of  Stratesec, Incorporated, a publicly traded provider of
integrated  technology  security  systems,  from  1992  to  September  2003.

                                       41
<PAGE>

     John  H.  deHavilland,  age  52, has served as a director of the Company as
well  as  President/CEO  of its wholly owned subsidiary, Strategic Jet Services,
since  September  2000.  He  has  twenty-two  years of industry experience, most
recently  as  President of deHavilland Aircraft, Incorporated from 1996 to 2000.
DeHavilland Aircraft specialized in the purchase, refurbishment and brokerage of
jet  aircraft.  From  1980  to  1996,  he  held  several  positions with British
Aerospace,  including  Director  of Sales and Marketing for the Turbo Prop Asset
Management  Division,  Program  Director and Market Development Director for the
Corporate  Jets  Division,  and Regional Marketing Manager for British Aerospace
PLC  Corporate  Jets  Division.  His tenure at British Aerospace was interrupted
from  1984  to  1987, during which Mr. deHavilland held the position of Managing
Director/Head  of  Marketing  at  A.R.A.V.C.O  Ltd  in  London.

     Matthew  J.  Goodman, age 51, has served as President of Commander Aircraft
Company  since  July  2002.  Prior to this Mr. Goodman was Senior Vice-President
Marketing  and Sales of Commander Aircraft Company. Mr. Goodman joined Commander
Aircraft Company in 1989 as Aircraft Sales Manager. He subsequently was promoted
to  the  position  of  Vice-President  Marketing,  and  later to Vice-President,
Marketing  and  Sales of the company's General Aviation Services Division. Prior
to  joining  Commander  Aircraft Company, he was Vice-President Sales of Kenosha
Aero  Service,  a  full  line  Cessna  dealership and FBO, and served in various
aircraft  sales  management  positions  since  1978.

     Glenn  A.  Jackson,  age  40,  has served as Vice-President/Chief Financial
Officer since December 2002. Prior to joining the Company, Mr. Jackson served as
Vice-President,  Finance,  for  Spectrum  Design  Group from 2000 to 2002 and as
Account  Manager  at  Seagate Technology from 1997 to 2000. Mr. Jackson earned a
B.A.  degree  and  M.B.A.  degree  from  the  University  of  Memphis.

Item  11.  Executive  Compensation
----------------------------------

     The  following  table reflects the required disclosures regarding Executive
Compensation  for  the  years  ended  December  31,  2003 and 2002 respectively.

<TABLE>
<CAPTION>
                                 Annual Compensation                         Long-Term Compensation
                           --------------------------------   -----------------------------------------------
                                                                       Awards                  Payouts
                                                              -----------------------   ---------------------
                                                                           Securities
                                                              Restricted   Underlying
                                                                 Stock       Options                All Other
                                                                 Awards      Awarded      LTIP       Compen-
                           Year   Salary (1)  Bonus   Other   (in shares)  (in shares)   Payouts    sation (2)
                           ----   ----------  ------  -----   -----------  -----------   -------    ----------

Wirt D. Walker III
<S>                        <C>    <C>        <C>          <C>   <C>          <C>              <C>   <C>
  Chairman and             2003   $ 102,400  $     -      -          -        20,000          -     $20,000
  Chief Executive
    Officer                2002   $ 127,846  $     -      -     30,303       120,000          -     $20,000

Mat  Goodman
  President/CEO            2003   $  73,623  $44,036      -          -             -          -     $     -
  Commander Aircraft
    Company, Inc.          2002   $  68,457  $ 3,950      -     48,485        50,000          -     $     -

John  DeHavilland
  Director                 2003   $       -  $     -      -          -             -          -     $     -
                           2002   $  56,646  $     -      -          -             -          -     $20,000

Glenn A. Jackson           2003   $ 62,400   $     -      -          -             -          -     $     -
  Chief Financial
    Officer                2002   $   9,646  $     -      -          -             -          -     $     -
</TABLE>

     (1)  Salary  and  bonus  payments  include  voluntary  salary  reduction
          contributions  to  the  Company's  401(k)  savings  plan
     (2)  Amounts  paid  as  director's  fees  unless  otherwise  indicated

                                       42
<PAGE>

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

     The following table sets forth as of December 31, 2003, certain information
with  respect  to  the beneficial ownership of the Company's Common Stock by (i)
any  person  known  by the Company to be the beneficial owner of more than 5% of
the  Company's  voting securities, (ii) each director of the Company, (iii) each
of  the  executive  officers  named  in the Summary Compensation Table appearing
herein, and (iv) all executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
Name                                   Number  of  Shares    Percent  of  Total
----                                   ------------------    ------------------
<S>                                        <C>                     <C>
Wirt  D.  Walker,  III  (1)(2)             907,396                 12.8%

John  deHavilland  (2)                     260,303                  3.7%

Matthew  J.  Goodman  (2)                  165,618                  2.3%

Nyltiak  Investments,  LLC  (3)          1,176,471                 16.5%

All Officers and Directors               1,333,317                 18.7%
as  a  Group  (3  persons)  (4)
-------------------------------
</TABLE>

     (1)  Includes  300,000  shares  owned  by  Mr. Walker's son; 100,900 shares
          owned  by  the estate of Mr. Walker's mother, of which Mr. Walker is a
          trustee;  and  33,714  shares owned by KuwAm Corporation, of which Mr.
          Walker  is  a  Managing  Director.
     (2)  Includes shares issuable upon exercise of options that are exercisable
          within  60  days,  as  follows:  Mr.  Walker,  280,000  shares;  Mr.
          DeHavilland,  200,000  shares;  and  Mr.  Goodman,  103,133  shares.
     (3)  Consists  of shares that are issuable upon conversion of a convertible
          note held by Nyltiak Investments, LLC. James E. Lawson is the managing
          member  of  Nyltiak  Investments  and  thus  may  be  deemed to be the
          beneficial  owner  of  shares  owned  by  it.
     (4)  On  December 31, 2003, executive officers and directors of the Company
          as  a  group  (3  persons)  held  options  to purchase an aggregate of
          583,133  shares  of  Common Stock, representing approximately 37.3% of
          outstanding  options  at  that  date.


Item  13.  Certain  Relationships  and  Related  Transactions
-------------------------------------------------------------

Note  E  -  Disclosures  About  Fair Value of Financial Instruments and Note I -
Related  Party  Transactions,  of the Notes to Consolidated Financial Statements
for  2003  are  hereby  incorporated  by  reference.

                                    PART IV
                                    -------

Item  14.  Principal  Accounting  Fees  and  Services
-----------------------------------------------------

     Audit  Fees.  The  aggregate  fees billed by Murrell, Hall, McIntosh & Co.,
PLLP  for  professional  services rendered for the audit of the Company's annual
financial  statements  for the fiscal years ended December 31, 2003 and December
31,  2002  and  the review of the financial statements included in the Company's
Forms  10-Q  for  fiscal  years  2003  and  2002  totaled  $36,000  and $21,000,
respectively.

     Audit-Related  Fees. The aggregate fees billed by Murrell, Hall, McIntosh &
Co.,  PLLP for assurance and related services that are reasonably related to the

                                       43
<PAGE>

performance of the audit or review of the Company's financial statements for the
fiscal  years  ended  December  31,  2003 and December 31, 2002 and that are not
disclosed  in  the  paragraph  captioned  "Audit  Fees"  above,  were $0 and $0,
respectively.

     Tax  Fees. The aggregate fees billed by Murrell, Hall, McIntosh & Co., PLLP
for  professional  services  rendered  for  tax  compliance,  tax advice and tax
planning for the fiscal years ended December 31, 2003 and December 31, 2002 were
$0  and  $0,  respectively.

     All Other Fees. The aggregate fees billed by Murrell, Hall, McIntosh & Co.,
PLLP  for  products  and  services,  other  than  the  services described in the
paragraphs  "Audit  Fees,"  "Audit-Related  Fees,"  and "Tax Fees" above for the
fiscal years ended December 31, 2003 and December 31, 2002 were $1,500 and $500,
respectively.  The  services performed by Murrell, Hall, McIntosh & Co., PLLP in
connection  with  these  fees  consisted  of  the  following:  Edgarizing.

The  Audit  Committee  has established its pre-approval policies and procedures,
pursuant  to  which  the  Audit  Committee  approved  the  foregoing  audit  and
permissible  non-audit  services provided by Murrell, Hall, McIntosh & Co., PLLP
in  fiscal  2003.


Item  15.  Exhibits,  Financial  Statement  Schedules,  and Reports of Form 8-K:
--------------------------------------------------------------------------------

                                                                            Page
(a)     (1)  The  following financial statements are included
             in Part II Item 8:

             Report  of  Independent  Public  Accountants                     16

             Financial  Statements:
               Consolidated  Balance  Sheets  December  31,  2003             17

               Consolidated  Statements  of  Operations  for
                 the  years  ended  December  31,  2003  and  2002            19

               Consolidated  Statement  of  Stockholders'  Equity
                 for  the  years  ended  2003  and  2002                      20

               Consolidated  Statements  of  Cash  Flows  for
                 the  years  ended  December  31,  2003  and  2002            21

               Notes  to  Consolidated  Financial  Statements                 23


        (2 )   The  following  financial  schedule  for  the  years
                 2003 and 2002 is  submitted  herewith:

               Selected  Quarterly  Financial  Data  for  the
                 years  ended  December  31, 2003 and 2002 (unaudited)        45

               All  other schedules are omitted because they are
                 not applicable or the required  information  has
                 been  presented  in  the financial  statements
                 or  notes  thereto.

        (3)    Exhibits included are hereby incorporated by reference
                 to the Exhibit Index, page  48  of  this  report.

                                       44
<PAGE>

                                INDEX OF EXHIBITS

Exhibit  No                     Description
-----------                     -----------

3.1       Certificate of Incorporation  of  Aviation General, Incorporated. This
          exhibit  is  incorporated   by  reference  to   Exhibit  3.1   of  the
          Registrant's  Form  S-4  filed  June  12,  1998  (Reg. No. 333-56731).

3.2       Bylaws of Aviation General, Incorporated. This exhibit is incorporated
          by  reference  to  Exhibit 3.2 of the Registrant's Form S-4 filed June
          12,  1998  (Reg.  No.  333-56731).

4.1(a)    Certificate  of  Incorporation,  describing the Common Stock (included
          in  Exhibit 3.1). This exhibit is incorporated by reference to Exhibit
          4.1(a)  of  the  Registrant's  Form  S-4 filed June 12, 1998 (Reg. No.
          333-56731).

10.1      Federal Aviation  Administration  ("FAA")  Type Certificates issued to
          Commander Aircraft Company (the "Company") for models 112, 114, 112TC,
          112B,  112TCA,  114A,  and  114B.  This  exhibit  is  incorporated  by
          reference  to Exhibit 10.1 of the Registrant's Form S-1 filed March 4,
          1993  (Reg.  No.  33-59128).

10.2      FAA Repair Station Air Agency Certificate issued to the Company.  This
          exhibit  is   incorporated  by   reference  to  Exhibit  10.2  of  the
          Registrant's  Form  S-1  filed  March  4,  1993  (Reg.  No. 33-59128).

10.3      Lease and operations Agreement between the Company and the Trustees of
          the  Oklahoma  City  Airport Trust dated August 9, 1988, as amended by
          the  Supplemental  Agreement  No.  1  dated December 18, 1991, and the
          Supplemental  Agreement  No.  2  dated  April 2, 1992. This exhibit is
          incorporated  by  reference  to Exhibit 10.19 of the Registrant's Form
          S-1  filed  March  4,  1993  (Reg.  No. 33-59128).

10.4      Textron  Lycoming  Finance  Plan   No.  1  between  Textron  Financial
          Corporation  and  the  Company  dated June 26, 1991, as amended to the
          Finance  Plan  No.  1  dated  as of May 28, 1992, the Second Amendment
          dated  as  of  September 29, 1992, and the Third Amendment dated as of
          December  10,  1992.  This  exhibit  is  incorporated  by reference to
          Exhibit  10.29  of  the  Registrant's  Form  S-1  filed  March 4, 1993
          (Reg.No.  33-59128).

10.5      International  Distributorship   Agreement  between  the  Company  and
          Com-Air Flugzeughandel Gmbh. This exhibit is incorporated by reference
          to Exhibit 10.31 of the  Registrant's  Form  S-1  filed  March 4, 1993
          (Reg.  No.  33-59128).

10.6      International Distributorship  Agreement  between the Company and Aero
          Service  b.v.  This  exhibit  is  incorporated by reference to Exhibit
          10.32  of  the  Registrant's  Form  S-1  filed March 4, 1993 (Reg. No.
          33-59128).

10.7      International Dealership  Agreement  between the Company and Commander
          Khaleej  Trading  Establishment.   This  exhibit  is  incorporated  by
          reference  to  Exhibit10.28  of the Registrant's Form 10-K filed March
          30,  1994.

10.8      Form of  the  Company's  Authorized  Sales  and Service Representative
          Policy  and  Procedures  Manual.   This  exhibit  is  incorporated  by
          reference to Exhibit 10.37 of the Registrant's Form S-1 filed March 4,
          1993  (Reg.  No. 33-59128).


<PAGE>

10.9      Form of  the  Company's  Authorized  Sales  and Service Representative
          Agreement.  This exhibit is incorporated by reference to Exhibit 10.38
          of  the Registrant's Form S-1 filed March 4, 1993 (Reg. No. 33-59128).

                                       45
<PAGE>

10.10     Form  of  the  Company's  Service  Center  Agreement.  This exhibit is
          incorporated  by  reference  to Exhibit 10.39 of the Registrant's Form
          S-1  filed  March  4,  1993  (Reg.  No.  33-59128).

10.11     The  Commander  Aircraft  Company Profit Sharing Plan. This exhibit is
          incorporated  by  reference  to Exhibit 10.40 of the Registrant's Form
          S-1  filed  March  4,  1993  (Reg.  No.  33-59128).

10.12     Nonstatutory  Stock  Option  Agreement between the Company and Wirt D.
          Walker  III  dated  January 31, 1994.  This exhibit is incorporated by
          reference  to  Exhibit 10.48 of the Registrant's Form 10-K filed March
          30,  1994.

10.13     Nonstatutory  Stock  Option  Agreement  between the Company and Mishal
          Y.S.  Al Sabah dated January 31, 1994. This exhibit is incorporated by
          reference  to  Exhibit 10.49 of the Registrant's Form 10-K filed March
          30,  1994.

10.14     Form  of  Company's  Aircraft  Delivery and Acceptance Agreement. This
          exhibit  is  incorporated  by  reference  to  Exhibit  10.63  of  the
          Registrant's  Form  S-1  filed  March  4,  1993  (Reg.  No. 33-59128).

10.15     Form  of  the  Company's  Aircraft  Retail  Warranty.  This exhibit is
          incorporated  by  reference  to Exhibit 10.64 of the Registrant's Form
          S-1  filed  March  4,  1993  (Reg.  No.  33-59128).

10.16     Commander  Aircraft  Company  1993 Stock Option Plan.  This exhibit is
          incorporated  by  reference  to Exhibit 10.53 of the Registrant's Form
          10-K  filed  March  28,  1996.

10.17     Convertible Note and Purchase Agreement with Nyltiak Investments, LLC.

10.18     Security  Purchase  Agreement  dated  July  22, 2002  between Aviation
          General, Incorporated  and  Nyltiak Investments, LLC  filed  August 4,
          2002.

21        List  of  subsidiaries

31.2      Certification  of  Wirt D. Walker III
31.2      Certification  of  Glenn A. Jackson

32        Certification  of  Wirt D. Walker III  and  Glenn A. Jackson



Item  16.  Controls  and  Procedures
------------------------------------

     Evaluation  of  Disclosure  Controls  and  Procedures.  The Company's Chief
Executive  Officer   and   the  Company's  principal  financial  officer,  after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as  defined  in the Securities Exchange Act of 1934 Rule 13a-14(c)and 15d-14(c)
as  of  the  date  of  the  financial statements included in this report on Form
10-KSB for December 31, 2003, have concluded that as of the evaluation date, the
Company's  disclosure  controls  and  procedures  were adequate and effective to
ensure  that  material  information  relating  to  the Company and the Company's
consolidated  subsidiaries  would  be  made known to them by others within those
entities,  particularly  during  the  period in which this annual report on Form
10-KSB  was  being  prepared.

                                       46
<PAGE>

     Changes  in  Internal  Controls.  There  were no significant changes in the
Company's  internal controls or in other factors that could significantly affect
the  Company's  disclosure  controls and procedures subsequent to the evaluation
date, nor any significant deficiencies or material weaknesses in such disclosure
controls  and  procedures  requiring  corrective  actions.  As  a  result,  no
corrective  actions  were  taken.

                                   SIGNATURES
                                   ----------


Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the undersigned, thereunto authorized on the 26th day of March 2003.

                              AVIATION  GENERAL  INCORPORATED




                              By:\s\  Wirt  D.  Walker  III
                                 -----------------------------------------------
                                  Wirt  D.  Walker  III

                              By:\s\  Glenn  A.  Jackson
                                 -----------------------------------------------
                                 Glenn  A.  Jackson


Pursuant  to  the  requirements of the Securities and Exchange Act of 1934, this
report  has  been  signed  above  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  and  on  the  dates  indicated.


Principal  Executive  Officers:

Wirt  D.  Walker  III             Chairman                     March  24,  2004
                                  Chief  Executive  Officer
                                  President

Principal  Financial  Officer  and  Accounting  Officer:

Glenn  A.  Jackson                Chief  Financial  Officer    March  24,  2004


Directors:

Wirt  D.  Walker  III             Director                     March  24,  2004





















                                       47