SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ----------------

                                    FORM 10-Q

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

                For the quarterly period ended December 31, 2004

                                       OR

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

             For the transition period from _________ to __________

                       Commission file number 33-99970-01


                                ----------------

   Airplanes Limited                                    Airplanes U.S. Trust

              Exact Name of Registrants as specified in memorandum
                       of association or trust agreement

   Jersey, Channel Islands                                Delaware
         (State or other jurisdiction of incorporation or organization)

           7359                                      13-3521640
        (SIC Code)                      (I.R.S. Employer Identification No.)
     Airplanes Limited                          Airplanes U.S. Trust
    22 Grenville Street                       1100 North Market Street,
        St. Helier                              Rodney Square North
     Jersey, JE4 8PX                            Wilmington, Delaware
      Channel Islands                                 19890-0001
   (011 44 1534 609 000)                           (1-302-651-1000)

            (Addresses and telephone numbers, including area codes,
                  of Registrants' principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the registrant was
    required to file such reports), and (2) has been subject to such filing
                       requirements for the past 90 days.

                           Yes   [x]   No   [_]

   Indicated by check mark whether the registrant is an accelerated filer (as
                      defined in Exchange Act Rule 12b-2)

                           Yes   [x]   No   [_]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

                                                              Outstanding at
Issuer                              Class                    December 31, 2004
------                              -----                    -----------------

Airplanes Limited     Ordinary Shares, $1.00 par value              30

<PAGE>

                   Airplanes Limited and Airplanes U.S. Trust

     Form 10-Q for the Three and Nine Month Periods Ended December 31, 2004

                                    Index
Part I.   Financial Information                                         Page No.

Item 1.   Financial Statements (Unaudited)                                     3

     -    Unaudited Condensed Balance Sheets - December 31, 2004 and
          March 31, 2004

     -    Unaudited Condensed Statements of Operations - Three Months
          Ended December 31, 2004 and December 31, 2003

     -    Unaudited Condensed Statements of Operations - Nine Months
          Ended December 31, 2004 and December 31, 2003

     -    Unaudited Condensed Statements of Comprehensive Income / (Loss)
          - Three Months Ended December 31, 2004 and December 31, 2003

     -    Unaudited Condensed Statements of Comprehensive Income / (Loss)
          - Nine Months Ended December 31, 2004 and December 31, 2003

     -    Unaudited Statements of Changes in Shareholders Deficit / Net
          Liabilities - Nine Months Ended December 31, 2004 and
          December 31, 2003

     -    Unaudited Condensed Statement of Cashflows - Nine Months Ended
          December 31, 2004 and December 31, 2003

     -    Notes to the Unaudited Condensed Financial Statements

Item 2.   Management's Discussion and Analysis of Financial                   14
          Condition and Results of Operations

     -    Introduction

     -    Results of Operations - Three Months Ended December 31, 2004
          compared with Three Months Ended December 31, 2003

     -    Results of Operations - Nine Months Ended December 31, 2004
          compared with Nine Months Ended December 31, 2003

     -    Comparison of Actual Cashflows versus the 2001 Base Case for the
          Three Month Period from October 9, 2004 to January 18, 2005

Item 3.   Quantitative and Qualitative Disclosures about Market Risks         50

Item 4.   Controls and Procedures                                             55

Part II.  Other Information

Item 1.   Legal Proceedings                                                   56

Item 2.   Changes in Securities and use of Proceeds                           57

Item 3.   Defaults Upon Senior Securities                                     57

Item 4.   Submission of Matters to a Vote of Security Holders                 57

Item 6.   Exhibits and Reports on Form 8-K                                    57

Signatures
Appendix 1 Portfolio Information as at December 31, 2004


                                       2
<PAGE>


Part I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

<TABLE>
                                                           AIRPLANES GROUP

                                                 UNAUDITED CONDENSED BALANCE SHEETS


                                                        March 31,                                    December 31,
                                       -------------------------------------------   -------------------------------------------
                                                         2004                                          2004
                                       -------------------------------------------   -------------------------------------------
                                          Airplanes     Airplanes                      Airplanes    Airplanes
                                           Limited       Trust          Combined        Limited        Trust          Combined
                                       -------------  -------------  -------------   -------------  -------------  -------------
                                                       ($millions)                                  ($millions)
<S>                                              <C>             <C>           <C>             <C>             <C>          <C>
ASSETS

Cash                                             77              6             83              97              6            103
Accounts receivable
  Trade receivables                              19              4             23               8              4             12
  Allowance for doubtful debts                   (8)            (1)            (9)             (2)             -             (2)
Amounts due from Airplanes Limited                -             45             45               -             47             47
Prepaid expenses                                  3              -              3               1              -              1
Other Current Assets                              1              5              6               1              -              1
                                       -------------  -------------  -------------   -------------  -------------  -------------
Total Current Assets                             92             59            151             105             57            162
                                       -------------  -------------  -------------   -------------  -------------  -------------

Net investment in capital and sales
   type leases                                    1              -              1               -              -              -
Aircraft, Held for Use                        1,393             59          1,452           1,259             46          1,305
Aircraft, Held for Sale                          98              8            106              63              -             63
                                       -------------  -------------  -------------   -------------  -------------  -------------
Total assets                                  1,584            126          1,710           1,427            103          1,530
                                       =============  =============  =============   =============  =============  =============

LIABILITIES

Accrued expenses and other liabilities        2,639            255          2,894           3,257            320          3,577
Amounts due to Airplanes Trust                   45              -             45              47              -             47
                                       -------------  -------------  -------------   -------------  -------------  -------------
Total Current Liabilities                     2,684            255          2,939           3,304            320          3,624
                                       -------------  -------------  -------------   -------------  -------------  -------------

Indebtedness                                  2,828            275          3,103           2,696            262          2,958
Provision for maintenance                       274             13            287             256              8            264
Deferred income taxes                             -             19             19               -             22             22
                                       -------------  -------------  -------------   -------------  -------------  -------------
Total liabilities                             5,786            562          6,348           6,256            612          6,868
                                       -------------  -------------  -------------   -------------  -------------  -------------
Common Stock, $1 par value per share,
Authorised 10,000 shares; issued and
outstanding 30 shares.                            -              -              -               -              -              -
                                       -------------  -------------  -------------   -------------  -------------  -------------
Net liabilities                              (4,202)          (436)        (4,638)         (4,829)          (509)        (5,338)
                                       -------------  -------------  -------------   -------------  -------------  -------------
                                              1,584            126          1,710           1,427            103          1,530
                                       =============  =============  =============   =============  =============  =============


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 3
<PAGE>


<TABLE>
                                                           AIRPLANES GROUP

                                            UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

                                                      Three Months Ended December 31,
                                      ----------------------------------------------------------------
                                                  2003                            2004
                                      ------------------------------  --------------------------------
                                      Airplanes  Airplanes             Airplanes   Airplanes
                                       Limited     Trust     Combined   Limited      Trust    Combined
                                      ---------  ---------   --------  ----------  ---------  --------
                                                ($millions)                       ($millions)

<S>                                         <C>         <C>       <C>        <C>        <C>         <C>
Revenues
Aircraft leasing                            43          2         45         40         1           41
Other Income                                 -          -          -          7         -            7

Expenses

Impairment Provision                       (60)       (11)       (71)         -       (10)         (10)
Depreciation and amortisation              (20)        (1)       (21)       (19)       (1)         (20)
Net interest expense                      (198)       (19)      (217)      (250)      (24)        (274)
Bad and doubtful debts                       1          1          2          1         -            1
Other lease costs                           (7)        (1)        (8)        (4)        -           (4)
Selling, general and administrative
   expenses                                (12)        (1)       (13)        (8)        -           (8)
                                      ---------  ---------  ---------  ---------  --------  -----------
Operating loss before
provision for  income taxes               (253)       (30)      (283)      (233)      (34)        (267)

Income tax Charge                            -         (1)        (1)         -        (2)          (2)

                                      ---------  ---------  ---------  ---------  --------  -----------
Net loss on continuing operations         (253)       (31)      (284)      (233)      (36)        (269)


Discontinued Operations
Profit on aircraft disposals                 -          -          -          2         -            2
Loss on discontinued operations            (42)        (1)       (43)        (9)        -           (9)
Income tax on discontinued operations        -          -          -          -         -            -


                                      ---------  ---------  ---------  ---------  --------  -----------
Net Loss                                  (295)       (32)      (327)      (240)      (36)        (276)
                                      =========  =========  =========  =========  ========  ===========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 4
<PAGE>


<TABLE>
                                                               AIRPLANES GROUP

                                                UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

                                                       Nine Months Ended December 31,
                                        ----------------------------------------------------------------
                                                     2003                            2004
                                        ------------------------------  --------------------------------
                                        Airplanes  Airplanes             Airplanes   Airplanes
                                         Limited     Trust    Combined    Limited      Trust    Combined
                                        ---------  ---------  --------  -----------  ---------  --------
                                                  ($millions)                       ($millions)

<S>                                          <C>          <C>     <C>        <C>          <C>       <C>
Revenues
Aircraft leasing                             139          8       147        130          6         136
Other Income                                   -          -         -          7          -           7

Expenses

Impairment Provision                        (226)       (19)     (245)       (19)       (10)        (29)
Depreciation and amortisation                (73)        (4)      (77)       (59)        (2)        (61)
Net interest expense                        (570)       (56)     (626)      (706)       (69)       (775)
Bad and doubtful debts                        (1)         -        (1)         6          -           6
Other lease costs                            (22)        (1)      (23)        (8)         -          (8)
Selling, general and administrative
   expenses                                  (27)        (2)      (29)       (23)        (1)        (24)
                                        ---------  ---------  --------  ---------  ---------  ----------
Operating loss before
provision for  income taxes                 (780)       (74)     (854)      (672)       (76)       (748)

Income tax benefit / (Charge)                 13          3        16          -         (3)         (3)

                                        ---------  ---------  --------  ---------  ---------  ----------
Net loss on continuing operations           (767)       (71)     (838)      (672)       (79)       (751)


Discontinued Operations
(Loss)/ Profit on aircraft disposals          (1)         -        (1)        27          3          30
Loss on discontinued operations              (93)       (14)     (107)       (13)         -         (13)
Income tax on discontinued operations         -          -         -          -          -           -
                                        ---------  ---------  --------  ---------  ---------  ----------
Net Loss                                    (861)       (85)     (946)      (658)       (76)       (734)
                                        =========  =========  ========  =========  =========  ==========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 5
<PAGE>


<TABLE>
                                                           AIRPLANES GROUP

                                   UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

                                                   Three Months Ended December 31,
                                    ---------------------------------------------------------------
                                                 2003                            2004
                                    ------------------------------  -------------------------------
                                    Airplanes  Airplanes             Airplanes  Airplanes
                                     Limited     Trust    Combined    Limited     Trust    Combined
                                    ---------  ---------  --------  ----------  ---------  --------
                                              ($millions)                      ($millions)

<S>                                     <C>         <C>      <C>        <C>         <C>        <C>
Loss for the period                     (295)       (32)     (327)      (240)       (36)       (276)


Other Comprehensive (Loss) / Gain

 - Net change in cashflow hedges          28          3        31          9          1          10
                                    ---------  --------- ---------  ---------  --------- -----------
Total Comprehensive loss                (267)       (29)     (296)      (231)       (35)       (266)
                                    =========  ========= =========  =========  ========= ===========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 6
<PAGE>


<TABLE>
                                                           AIRPLANES GROUP

                                   UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

                                                   Nine Months Ended December 31,
                                    --------------------------------------------------------------
                                                2003                            2004
                                    ------------------------------  ------------------------------
                                    Airplanes  Airplanes            Airplanes  Airplanes
                                     Limited     Trust    Combined   Limited     Trust    Combined
                                    ---------  ---------  --------  ---------  ---------  --------
                                              ($millions)                     ($millions)

<S>                                     <C>        <C>       <C>        <C>        <C>        <C>
Loss for the period                     (861)      (85)      (946)      (658)      (76)       (734)


Other Comprehensive (Loss) / Gain

 - Net change in cashflow hedges          28         3         31         31         3          34
                                    --------- ---------  ---------  --------- ---------  ---------
Total Comprehensive loss                (833)      (82)      (915)      (627)      (73)       (700)
                                    ========= =========  =========  ========= =========  ==========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 7
<PAGE>


<TABLE>
                                                           AIRPLANES GROUP

                              UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES

                                      Nine Months Ended December 31, 2004 and December 31, 2003

                                             Airplanes Limited                             Airplanes Trust               Combined
                            --------------------------------------------------  -------------------------------------- -------------
                               Share    Accumulated     Other     Shareholders' Accumulated     Other     Shareholders Shareholders
                              Capital      Loss     Comprehensive   Deficit        Loss     Comprehensive   Deficit    Deficit/ Net
                                                         Loss                                    Loss                    Liabilities
                            --------------------------------------------------  -------------------------------------- -------------
                            ($millions) ($millions)  ($millions)  ($millions)   ($millions)  ($millions)  ($millions)   ($millions)

<S>              <C> <C>                     <C>            <C>        <C>             <C>            <C>        <C>         <C>
Balance at March 31, 2003            -       3,090          71         3,161           326            7          333         3,494

Net loss for the period              -         767           -           767            71            -           71           838

Other Comprehensive Loss             -           -         (28)          (28)            -           (3)          (3)          (31)

                            -----------  ----------   ---------  ------------    ----------   ----------   ----------    ----------
Balance at December 31, 2003         -       3,857          43         3,900           397            4          401         4,301
                            ===========  ==========   =========  ============    ==========   ==========   ==========    ==========


Balance at March 31, 2004            -       4,156          46         4,202           431            5          436         4,638

Net loss for the period              -         658           -           658            76            -           76           734

Other Comprehensive Loss             -           -         (31)          (31)            -           (3)          (3)          (34)

                            -----------  ----------   ---------  ------------    ----------   ----------   ----------    ----------
Balance at December 31, 2004         -       4,814          15         4,829           507            2          509         5,338
                            ===========  ==========   =========  ============    ==========   ==========   ==========    ==========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 8
<PAGE>


<TABLE>
                                                           AIRPLANES GROUP

                                             UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS

                                                            Nine Months Ended December 31,
                                             ---------------------------------------------------------------
                                                          2003                             2004
                                             ------------------------------  -------------------------------
                                             Airplanes  Airplanes             Airplanes  Airplanes
                                              Limited     Trust    Combined   Limited      Trust    Combined
                                             ---------  ---------  --------  ----------  ---------  --------
                                                       ($millions)                      ($millions)

<S>                                              <C>         <C>      <C>        <C>         <C>       <C>
Cash flows from operating activities
Net loss                                         (861)       (85)     (946)      (658)       (76)      (734)
Adjustment to reconcile (net loss)
to net cash provided by operating activities:
Depreciation                                       88          5        93         60          2         62
Impairment Charge                                 318         32       350         36         10         46
Aircraft maintenance, net                          16          2        18         32          -         32
Loss/ (Profit) on disposal of aircraft              1          -         1        (27)        (3)       (30)
Deferred income taxes                             (13)        (3)      (16)         -          3          3
Provision for bad debts                             1          -         1         (6)         -         (6)
Accrued and deferred interest expense             473         47       520        665         66        731

Changes in operating assets & liabilities:
Accounts receivable                                 5          -         5         12         (2)        10
Intercompany account movements                     (8)         8         -          -          -          -
Other accruals and liabilities                      1          -         1        (16)         2        (14)
Other assets                                       (1)         1         -          2          6          8

                                             ---------  ---------  --------  ---------  ---------  ---------
Net cash provided by operating activities          20          7        27        100          8        108
                                             =========  =========  ========  =========  =========  =========


Cash flows from investing activities
Purchase/Sale of aircraft                           -          -         -         51          5         56
Capital and sales type leases                       1          -         1          1          -          1
Net cash provided by
                                             ---------  ---------  --------  ---------  ---------  ---------
investing activities                                1          -         1         52          5         57
                                             =========  =========  ========  =========  =========  =========

Cash flows from financing activities
Repayment of indebtedness                         (67)        (7)      (74)      (132)       (13)      (145)

                                             ---------  ---------  --------  ---------  ---------  ---------
Net cash used in financing activities             (67)        (7)      (74)      (132)       (13)      (145)
                                             =========  =========  ========  =========  =========  =========

Net (decrease) / increase in cash                 (46)         -       (46)        20          -         20

Cash at beginning of period                       135          6       141         77          6         83
                                             ---------  ---------  --------  ---------  ---------  ---------

Cash at end of period                              89          6        95         97          6        103
                                             =========  =========  ========  =========  =========  =========

Cash paid in respect of:
Interest                                           99          9       108         41          3         44
                                             =========  =========  ========  =========  =========  =========


                     The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>


                                                                 9
<PAGE>


                               Airplanes Group

Notes to the Unaudited Condensed Financial Statements

1.  Basis of Preparation

The accompanying unaudited condensed financial statements of Airplanes Limited,
a special purpose company formed under the laws of Jersey, Channel Islands
("Airplanes Limited"), and Airplanes U.S. Trust, a trust formed under the laws
of Delaware ("Airplanes Trust" and together with Airplanes Limited, "Airplanes
Group") and the combined unaudited condensed balance sheets, statements of
operations, statements of comprehensive income/(loss), statement of changes in
shareholders deficit/net liabilities and statements of cashflows of Airplanes
Group (together the "financial statements") have been prepared on a going
concern basis in conformity with United States generally accepted accounting
principles. The financial statements are presented on a historical cost basis.

The accompanying financial statements for Airplanes Limited and Airplanes Trust
reflect all adjustments which in the opinion of management are necessary for a
fair statement of the information presented as of December 31, 2004 and for the
three and nine month periods ended December 31, 2004. Such adjustments are of a
normal, recurring nature. The results of operations for the three and nine month
periods ended December 31, 2004 are not necessarily indicative of the results to
be expected for the full year.

References to Airplanes Group in these notes to the unaudited condensed
financial statements relate to Airplanes Limited and Airplanes Trust on a
combined or individual basis as applicable and in this respect, we use "we",
"us" and "our" to refer to Airplanes Group and its subsidiaries and Airplanes
Pass-through Trust.

Recent Events

We have been unable to meet all of the 1996 Base Case assumptions or the 2001
Base Case assumptions. Various factors, starting with the 2001 terrorist attacks
in the US and a weak global economy and including the continued threat of
terrorist attacks, the outbreak of SARS and continuing conflict in Iraq, have
contributed to a weak aircraft leasing market. As a result we have had to
restructure many of our leases. Additionally the rates we are able to achieve on
new leases (also adversely affected by a low interest rate environment) are
generally lower, and in some cases significantly lower, than the rates assumed
in the 2001 Base Case. We are generating revenues at significantly lower levels
than we had assumed and at levels which have been inadequate to pay minimum
principal on the class A notes in full, or to pay any interest or minimum
principal on the class B notes or any interest on the class C and D notes, since
the December 15, 2003 payment date. Even though, as discussed under "Commercial
Opportunities for Certain Types of our Aircraft" below, as a result of the
consent solicitation in 2003 we are now able to sell aircraft which we may not
have been able to sell previously, such sales in the current market are
difficult to achieve and where sales have been completed, they have not yielded
sales proceeds sufficient to repay a proportionate amount of the notes and
certificates or even to make a significant difference to our cashflow. In
addition, although we are seeing some improvement in lease rates for certain
aircraft types, this improvement has not made, nor do we expect it to make a
significant difference to our cashflow. On each payment date we are currently
only paying in full our administrative and lease expenses and certain other
payments in the ordinary course of business, interest on the class A notes and
swap payments, and the "First Collection Account Top-Up". We use any remaining
cashflows towards payment of minimum principal on the class A notes which at
January 18, 2005 was $119.5


                                     10
<PAGE>


million in arrears. We do not anticipate that we will ever be able to resume
making payments of interest or principal on the class B, C and D notes.

Impairment

Aircraft are periodically reviewed for impairment in accordance with Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long Lived Assets ("SFAS 144"). An impairment review is required
whenever events or changes in circumstances indicate that the asset's carrying
amount may not be recoverable. An impairment loss is evaluated when the
undiscounted estimated future cashflows of the aircraft are less than its
carrying value and the loss is measured as the excess of the carrying value over
the fair value.

The fair value of the aircraft is generally based on independent appraisals of
aircraft. These appraisals are determined based on the assumption that there is
an "open unrestricted stable market environment with a reasonable balance of
supply and demand". In assessing fair value, consideration is also given to
other available information including past experience, actual lease rates, sales
prices achievable in the current market, the servicer's experience in the market
and estimated discounted cash flows. Where the other available information
indicates a lower value for an aircraft than its appraised value, such
information is evaluated in detail in making the determination of the fair value
for that aircraft. In some instances discounted cash flows may be used as a more
accurate indication of fair value. The estimated discounted future cashflows
assume, among other things, market lease rates at the end of the existing lease
term, other lease costs, downtime and the risk inherent in the cashflows.
Following consideration of the estimated future cashflows from rentals or sales
proceeds, to be generated by our aircraft, which have decreased significantly, a
SFAS 144 assessment resulted in the requirement for an impairment provision of
$45 million (Airplanes Limited: $35 million; Airplanes Trust: $10 million) in
the nine month period ended December 31, 2004, $18 million (Airplanes Limited:
$18 million; Airplanes Trust: $Nil) of which has been included under
discontinued operations.

Discontinued Operations

We separately disclose results relating to discontinued operations which refer
to aircraft which have been sold or are held for sale. At December 31, 2004,
fifteen aircraft with a net book value of $63 million are classified as held for
sale. We disclose profit/ (loss) on sale, lease revenue, impairment charges and
depreciation for these aircraft and the comparative prior period numbers have
been reclassified on a consistent basis.

Debt Maturity

The terms of each subclass or class of notes, including the outstanding
principal amount as of December 31, 2004 and estimated fair value as of December
31, 2004, are as follows:

<TABLE>
                                                                                Estimated Fair
                        Annual Interest     Principal Amount                      Value at
                             Rate           at December 31,       Final         December 31,
 Class of Notes*       (Payable Monthly)         2004           Maturity Date      2004**
 ---------------       -----------------         ----           -------------   ---------------
                                             $ Million                            $ Million
<S>         <C>                 <C>               <C>         <C>                 <C>
 Subclass A-8            (LIBOR+.375%)            652         March 15, 2019         574
 Subclass A-9            (LIBOR+.55%)             750         March 15, 2019         399
 Class B                 (LIBOR+.75%)             227         March 15, 2019          34
 Class C                 (8.15%)                  350         March 15, 2019          11
 Class D                 (10.875%)                395         March 15, 2019           -
                                                -----                              -----
                                                2,374                              1,018
                                                =====                              =====
</TABLE>

                                     11
<PAGE>

* The subclass A-6 notes were repaid on October 15, 2004.

** Although the estimated fair values of the class A to D notes outstanding have
been determined by reference to prices as at December 31, 2004 provided by an
independent third party, these fair values do not reflect the market value of
these notes at a specific time and should not be relied upon as a measure of the
value that could be realized by a noteholder upon sale.


2.       Securitization Transaction

On March 28, 1996 (the "Closing Date"), debis AirFinance Ireland plc ("debis
AirFinance Ireland") (then known as GPA Group plc) and its subsidiaries
(collectively "debis AirFinance") refinanced on a long-term basis certain
indebtedness due to commercial banks and other senior secured lenders. The
refinancing was effected through a major aircraft securitization transaction
(the "Transaction").

Under the terms of the Transaction, Airplanes Limited and Airplanes Trust were
formed to purchase from debis AirFinance, a portfolio of 229 commercial aircraft
and related leases through a purchase of 100% of the stock of the existing
subsidiaries of debis AirFinance that owned and leased the aircraft.

Simultaneously with these transfers, we issued notes of $4,048 million in
aggregate principal amount in four classes: class A, class B, class C and class
D, with approximately 91% of the principal amount of the notes in each class
being issued by Airplanes Limited and approximately 9% by Airplanes Trust. We
also issued class E notes of $604 million which are subordinate to the class A
to D notes and these class E notes were acquired by debis AirFinance as part
consideration for the transfer to us of the aircraft and certain related lease
receivables. Approximately $13 million of the class E notes originally issued
were subsequently cancelled on July 30, 1996 under the terms of the Transaction,
leaving $591 million outstanding principal of class E notes.

On March 16, 1998, we completed a refinancing of $2,437 million of class A and
class B notes.

On November 20, 1998, debis AirFinance Ireland and its subsidiary, debis
AirFinance Inc. (formerly AerFi, Inc.) transferred their class E notes to
General Electric Capital Corporation ("GE Capital").

On March 15, 2001, we completed a refinancing of $750 million of class A notes.

Indebtedness at December 31, 2004 represents the aggregate of the outstanding
class A to D notes and class E notes. Airplanes Limited and Airplanes Trust have
each fully and unconditionally guaranteed each others' obligations under the
relevant notes (the "Guarantees").

3.       Contingent Liabilities

Guarantees

Airplanes Limited and Airplanes Trust have unconditionally guaranteed each
others' obligations under all classes of notes issued by Airplanes Trust and
Airplanes Limited, respectively, pursuant to the Transaction, details of which
are set out in Note 2.


                                     12
<PAGE>



Foreign Taxation

The international character of Airplanes Group's operations gives rise to some
uncertainties with regard to the impact of taxation in certain countries. The
position is kept under continuous review and Airplanes Group provides for all
known liabilities.


Legal Proceedings

VASP
Following the default by the Brazilian airline VASP under its leases, debis
AirFinance Ireland (formerly known as GPA Group plc) sought and obtained in
November 1992 a preliminary injunction for repossession of 13 aircraft and three
spare engines, and subsequently repossessed these aircraft and engines.
Airplanes Group acquired seven of these aircraft from debis AirFinance Ireland
in March 1996, four of which remain in our portfolio and represented 1.95% of
our portfolio by appraised value as of January 31, 2005. In December 1996, the
Sao Paolo Court of Justice, Brazil, found in favor of VASP on appeal and granted
it the right to the return of the aircraft and engines or the right to seek
damages against debis AirFinance Ireland. debis AirFinance Ireland challenged
this decision and in January 2000, the Court of Justice granted a stay of the
1996 judgment while it considered debis AirFinance Ireland's rescission action.
In April 2002, the Court of Justice found in favor of debis AirFinance Ireland's
rescission action and overturned the 1996 judgment in favor of VASP. VASP has
actively pursued appeals to this decision and in June 2004, the Superior Court
of Justice found in favour of VASP, granting VASP's special appeal with the
consequent dismissal of debis AirFinance Ireland's rescission action. debis
AirFinance Ireland has indicated that it will continue to actively pursue all
available courses of action, including appeals and if necessary initiating a new
rescission action. A risk of repossession by VASP would only arise if VASP were
successful on appeal in seeking repossession of the aircraft and the aircraft
were located in Brazil. Brazilian counsel to debis AirFinance Ireland believe
that VASP may not commence a repossession action as VASP has indicated that it
may instead file a motion for damages suffered as a result of the repossession
of the aircraft. We cannot at this point quantify the amount of this potential
damages claim. Although none of our lessees which lease any of the relevant
aircraft is based in Brazil, some of them may operate those aircraft into Brazil
from time to time.


The preparation of the financial statements requires the use of management
estimates.

The accompanying unaudited condensed interim financial statements of Airplanes
Limited and Airplanes Trust (pages 3 to 13) have been prepared in accordance
with United States generally accepted accounting principles for interim
financial information and in accordance with the requirements of this Report on
Form 10-Q. Consequently, they do not include all the disclosure normally
required by United States generally accepted accounting principles. For further
information regarding Airplanes Group and its financial condition, results of
operations and cashflows, you should refer to the audited financial statements
and notes thereto included in Airplanes Group's Annual Report on Form 10-K for
the year ended March 31, 2004 previously filed with the Securities and Exchange
Commission.


                                     13
<PAGE>


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

Introduction

We are in the business of leasing aircraft to aircraft operators around the
world. At December 31, 2004, we owned 154 aircraft, 140 of which were on lease
to 54 lessees in 35 countries.

On March 28, 1996, we established eight separate pass-through trusts to issue
and sell $4,048 million in aggregate principal amount of subclass A-1, A-2, A-3,
A-4 and A-5 and class B, C and D pass-through certificates in an underwritten
offering. We used the proceeds from this offering, together with the proceeds
from the sale of the class E notes of Airplanes Limited and Airplanes Trust to
debis AirFinance Ireland plc (then known as GPA Group plc) to acquire a
portfolio of 229 aircraft from debis AirFinance Ireland and its subsidiaries. We
use the rental payments that we receive from leasing the aircraft to pay
interest and principal on this debt. On March 16, 1998, we established four
additional pass-through trusts to issue and sell $2,437 million in aggregate
principal amount of subclass A-6, A-7 and A-8 and class B certificates in
connection with the refinancing of our subclass A-1, A-2 and A-3 and class B
certificates. On November 20, 1998, GE Capital acquired a majority of the class
E notes from debis AirFinance Ireland (then known as AerFi Group) and its
subsidiaries. On that date, a subsidiary of debis AirFinance Ireland also
granted GE Capital an option to acquire the residual interest in Airplanes
Trust. The subclass A-5 certificates were fully repaid as of May 15, 1998 and
the subclass A-6 certificates were fully repaid as of October 15, 2004.

We established a new pass-through trust on March 15, 2001 to issue and sell $750
million in aggregate principal amount of subclass A-9 certificates. We used the
proceeds from this offering to refinance our subclass A-4 and A-7 certificates.

The discussion and analysis which follows is based primarily on the combined
operating results of Airplanes Limited and Airplanes Trust and not on their
results reported as individual entities. It should be noted, however, that the
notes and the Guarantees comprise obligations of two different legal entities
owning different assets. The Directors of Airplanes Limited and the Controlling
Trustees of Airplanes Trust believe that a combined discussion is the most
appropriate basis of presentation because:

o    Airplanes Limited and Airplanes Trust are not intended to be regarded
     as separate businesses but rather on the basis of one combined aircraft
     fleet; and

o    each of Airplanes Limited and Airplanes Trust has fully and
     unconditionally guaranteed the performance of the other under their
     respective notes.

The notes and Guarantees have been structured to ensure that no payments are
made on a junior class of notes of Airplanes Limited or Airplanes Trust, as the
case may be, before any amounts due and payable on a more senior class of notes
of Airplanes Limited or Airplanes Trust, respectively, are paid pursuant to the
Guarantees.


                                     14
<PAGE>


General

Substantially all of our business consists of aircraft operating lease
activities. We may also engage in aircraft sales subject to certain guidelines.
Our revenues and operating results are determined by a number of significant
factors including (i) trading conditions in the civil aviation industry, and in
particular, the market for aircraft on operating leases, (ii) the mix, relative
age and popularity of the various aircraft types in our portfolio and (iii) our
financial resources and liquidity position relative to our competitors.

This quarterly Report on Form 10-Q contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties. Statements in this document which
are not historical facts are hereby identified as "forward-looking statements"
for the purpose of the safe harbour provided by Section 21E of the Securities
Exchange Act of 1934 ("Exchange Act"). In most cases, you can identify these
forward looking statements by such terms as "may", "should", "expect", "plan",
"believe", "estimate", "potential", "continue" or similar terms that relate to
the future or express uncertainty. Our actual results and business experience
could differ materially from those anticipated in these forward looking
statements. In evaluating these statements, you should specifically consider
various factors, including risk factors disclosed in our Annual Report on Form
10-K for the year ended March 31, 2004.

Recent Developments

Overview

We have been unable to meet all of the 1996 Base Case assumptions or the 2001
Base Case assumptions. Various factors, starting with the 2001 terrorist attacks
in the US and a weak global economy and including the continued threat of
terrorist attacks, the outbreak of SARS and continuing conflict in Iraq, have
contributed to a weak aircraft leasing market. As a result we have had to
restructure many of our leases. Additionally the rates we are able to achieve on
new leases (also adversely affected by a low interest rate environment) are
generally lower, and in some cases significantly lower, than the rates assumed
in the 2001 Base Case. We are generating revenues at significantly lower levels
than we had assumed and at levels which have been inadequate to pay minimum
principal on the class A notes in full, or to pay any interest or minimum
principal on the class B notes or any interest on the class C and D notes, since
the December 15, 2003 payment date. Even though, as discussed under "Commercial
Opportunities for Certain Types of our Aircraft" below, as a result of the
consent solicitation in 2003 we are now able to sell aircraft which we may not
have been able to sell previously, such sales in the current market are
difficult to achieve and where sales have been completed, they have not yielded
sales proceeds sufficient to repay a proportionate amount of the notes and
certificates or even to make a significant difference to our cashflow. In
addition, although we are seeing some improvement in lease rates for certain
aircraft types, this improvement has not made, nor do we expect it to make a
significant difference to our cashflow. On each payment date we are currently
only paying in full our administrative and lease expenses and certain other
payments in the ordinary course of business, interest on the class A notes and
swap payments, and the "First Collection Account Top-Up". We use any remaining
cashflows towards payment of minimum principal on the class A notes which at
January 18, 2005 was $119.5 million in arrears. We do not anticipate that we
will ever be able to resume making payments of interest or principal on the
class B, C and D notes.


                                     15
<PAGE>


Background

Class A principal adjustment amount

As a result of our low revenues and a greater than assumed decline in the
appraised value of the aircraft in our portfolio, we have been required to pay
class A principal adjustment amount to the extent of available cashflows in
order to maintain certain loan to current appraised value ratios on the class A
notes. We have not always had sufficient cashflows to pay class A principal
adjustment amount in full and since the April 15, 2003 payment date, we have not
had sufficient cashflows to pay any class A principal adjustment amount,
resulting in accumulating arrears.

Class A principal adjustment amount ranks ahead of scheduled principal payments
on the class C and D notes. If, on any payment date, we were unable to make
payment in full of class A principal adjustment amount, then by definition we
were unable to make any scheduled principal payments on the class C and D notes.
Between February 1999 and March 2000, we were unable to make some scheduled
principal payments on the class C and D notes and since April 2000 we have not
paid any scheduled principal on the class C and D notes (or paid any minimum
interest on the class E notes) which continues to be deferred.

Class A minimum principal amount

To the extent that we have sufficient available funds, we are also required to
pay a minimum principal amount on the class A notes in order to maintain certain
loan to initial appraised value ratios. (Since class A minimum principal amount
is determined by reference to initial appraised values, it is unaffected by the
annual appraisals.) As a result of earlier payments of class A principal
adjustment amount described above we remained ahead of the required class A
minimum principal payment schedule. However as described above, we have not
always had sufficient cashflows to pay class A principal adjustment amount in
full and since the April 15, 2003 payment date, we have not had sufficient
cashflows to pay any class A principal adjustment amount. As a result, since the
August 15, 2003 payment date we have no longer been ahead of the required class
A minimum principal payment schedule. Therefore on that date we had to
recommence payments of minimum principal on the class A notes to the extent of
available cashflows and we were unable to fund the "Second Collection Account
Top-up" in full. Beginning on the December 15, 2003 payment date our cashflows
were insufficient to allocate any funds at all to the "Second Collection Account
Top-up" or to pay minimum principal on the class A notes in full. Minimum
principal arrears on the class A notes were $119.5 million on the January 18,
2005 payment date. Since minimum principal on the class A notes ranks ahead of
interest and minimum principal on the class B notes and interest on the class C
and D notes in the priority of payments, our cashflows have been inadequate to
pay any interest or minimum principal on the class B notes or any interest on
the class C and D notes, since the December 15, 2003 payment date. Our failure
to make payments on a class of notes results in failure to make payments on a
corresponding class of certificates.

Class B, C and D notes

We do not anticipate that we will ever be able to resume payments of interest or
principal on the class B, C and D notes. Given our failure to pay interest when
due on these notes beginning on the December 15, 2003 payment date, interest has
begun to accrue on the unpaid interest in accordance with the terms of the notes
and will continue to accrue until all interest arrears are paid in full. Since
interest (and


                                     16
<PAGE>


minimum principal) on the class A notes is payable prior to
payment of interest and minimum/scheduled principal on the class B, C and D
notes (and all other amounts of principal on the class B, C and D notes),
available cashflows are used first to service interest and, to the extent
possible, minimum principal on the class A notes. The minimum principal arrears
on the class A notes on each payment date have been and will continue to be
carried over to the next payment date causing the amount payable to increase
over time, making it more difficult to make payments in full. Even if cash were
available at any subsequent time to make payments ranking below class A minimum
principal, cashflows would first be used to pay interest on the class B notes,
which would then include all the accrued interest from the period when no
payments were made on these notes, thus rendering remote any likelihood of
payments ranking below this in the order of priority of payments.

Ratings

This vulnerability of the various classes of notes and certificates has been
reflected in actions taken by the rating agencies which continue to re-evaluate
structured aircraft financings.

Set out in the table below are the ratings of our certificates at January 18,
2005:-

                    Outstanding
                     Principal
                     Balance as
                   at January 18,                              Moody's (S&P
Certificate             2005          S & P        Fitch        equivalent)
-----------             ----          -----        -----        -----------
Subclass A-8          $627.9m           A            BB           Baa3 (BBB-)
Subclass A-9          $750.0m           BB+          BB           B1 (B+)
Class B               $226.8m           D            CCC          Ca (CC)
Class C               $349.8m           D            CCC          Ca (CC)
Class D               $395.1m           D            CC           C (C)

Given the continuing difficulties in the aircraft industry and their impact on
the factors which determine our revenues, there can be no assurance that the
rating agencies will not further downgrade any class of our certificates.

The ratings of the certificates address the likelihood of the timely payment of
interest and the ultimate payment of principal and premium, if any, on the
certificates. A rating is not a recommendation to buy, sell or hold certificates
because ratings do not comment as to market price or suitability for a
particular investor. A rating may be subject to revision, suspension or
withdrawal at any time by the assigning rating agency.

Change of Independent Director/Controlling Trustee

Mr Jenkins has retired as a Director and Controlling Trustee of Airplanes
Limited and Airplanes Trust, respectively, and as a director of Elasis Leasing
IV Ltd. (UK), with effect from February 7, 2005. The board of directors of
Airplanes Limited and the controlling trustees of Airplanes Trust have appointed
Ms. Isla Smith as an Independent Director and Controlling Trustee with effect
from the same date.

Ms. Isla Smith (52), qualified as an attorney in South Africa before moving to
London and qualifying as a solicitor in 1980 and a member of the Institute of
Taxation in 1981. She joined Norton Rose as an associate in 1980 and became a
Commercial Tax Partner in 1985. She was a member of the firm's management board
from 1996 to 2003. In 2002 she was appointed Global Head of Tax with
responsibility for management of the tax practice in London, Paris, Frankfurt,
Amsterdam and Milan. Ms. Smith moved from Norton Rose in 2004 to take on
consultancy work and non-executive


                                     17
<PAGE>


directorships. She has extensive experience in financing and taxation,
particularly in aviation, transport, banking, utilities and real estate.

Commercial Opportunities for Certain Types of our Aircraft

The market for certain aircraft models is currently very weak and is expected to
remain so. The price of aviation fuel has varied dramatically in recent months
and remains volatile. This has added to the financial difficulties for airlines
since, as a result of competitive pressures, not all of this cost is being
passed back to customers. It also has a negative effect on operators of older,
less fuel efficient aircraft which comprise a majority of the aircraft in our
portfolio. Continued high fuel prices also make it more difficult for us to
remarket these aircraft favourably.

Prior to the successful completion of the consent solicitation as outlined in
our most recent Annual Report on Form 10-K, our indentures restricted our
ability to sell aircraft. During September 2003, we successfully completed a
solicitation of consents from certificate holders, as announced in our Consent
Solicitation Statement dated September 5, 2003, and as explained in more detail
in our most recent Report on Form 10-K. We are now able to sell aircraft below
specified target prices where we have unanimously determined that a sale is in
the best interests of Airplanes Group and the noteholders and certain other
conditions are met.

The Board would not ordinarily approve a sale of aircraft unless the Servicer
has concluded that the best economic option for a particular aircraft is a sale.
Before making such conclusion, the Servicer conducts a thorough analysis (which
is also presented to and reviewed by the Board) comparing expected cash flows
upon a sale against estimated cash flows from continued leasing. The Servicer's
overall objective in this analysis is to maximize the cash flow generation for
the relevant aircraft. This analysis includes a sale versus lease cash flow
analysis and also the consideration of other more subjective factors as
appropriate.

We continue to evaluate sales opportunities for aircraft with little or no
re-lease prospects and which require expenditure for storage, maintenance and
insurance. In the three month period to December 31, 2004, we disposed of 2 x
MD83 aircraft. At December 31, 2004 six such aircraft (DC9-32 x 2, MD83 x 1,
B737-200A x 2, DHC8-100 x 1) were subject to letters of intent or contract for
sale.

As of the date of this Form 10-Q, one further B737-200A aircraft has become
subject to a letter of intent for sale and the DHC8-100 aircraft listed above
has been sold.

Remarketing

At December 31, 2004, we had 24 aircraft scheduled to be remarketed before
December 31, 2005. These comprise 1 B737-200A, 4 B737-400/500s, 1 B747-200SF, 6
DHC8s, 11 DC8s, and 1 ATR42. As a result of the current over supply of aircraft
in the market place and the factors discussed above, we will experience
difficulties in placing certain of these aircraft, particularly the older less
fuel efficient models such as the DC8s, MD83s, B737-200As and B747.

Furthermore, in light of the financial condition of certain lessees, it is
likely that we will also experience redeliveries of aircraft prior to their
contractual lease expiries, resulting in additional remarketing obligations.
Aircraft returned early are unlikely to meet return conditions under the related
lease, we may also be required to incur significant redelivery costs. To the
extent that we suffer significant delays in placing these aircraft, we will
incur substantial downtime. In addition new lease rates, with the exception of
some more popular models, are also likely to be lower, and in some cases
materially lower, than both


                                     18
<PAGE>


the lease rates assumed in the 2001 Base Case and lease rates assumed in the
2001 Base Case and lease rates which have not been reset in the last three
years.

With respect to each of our aircraft identified as a sale opportunity, we will
apply the methodology described above on a case by case basis to determine
whether sale of the aircraft may be in the best interests of Airplanes Group and
the noteholders.

The Lessees:

Europe

At December 31, 2004 we leased 46 aircraft which represented 39.03% of our
portfolio by appraised value at January 31, 2005 to operators in Europe.

Europe continues to perform strongly and the low cost boom has continued with
additional start-ups, but also a number of failures, showing competition is
strong.

North America

At December 31, 2004 we leased 18 aircraft representing 11.93% of our portfolio
by appraised value as of January 31, 2005, to operators in North America. The
large US airlines continue to announce significant losses and a number of these
airlines are in, or considering entering, Chapter 11 bankruptcy protection. We
believe that the market is suffering from over capacity and low yields.

At December 31, 2004, we leased six aircraft, representing 7.06% of our
portfolio by appraised value as of January 31, 2005 to one Canadian lessee. The
lessee, which has emerged from the protection of the Companies Creditors
Arrangement Act (Canada), resumed making payments in July 2003 and continues to
do so. The servicer had agreed a restructuring of the leases resulting in a
temporary reduction in lease rentals. During the three months ended December 31,
2004 we realised $3 million from the proceeds of shares received under our claim
against this lessee under its bankruptcy proceedings.

At December 31, 2004 a former lessee of one aircraft representing 0.79% of our
portfolio by appraised value as of January 31, 2005 had filed for Chapter 11
bankruptcy protection. The airline has subsequently emerged from this
protection. The aircraft was rejected as part of the Chapter 11 proceedings and
was redelivered during the three month period ended June 30, 2004. The servicer
agreed a $10 million settlement with the lessee in respect of its obligations
which was received in cash during the three month period ended December 31,
2004.

Latin America

At December 31, 2004, lessees of 41 aircraft with respect to 19.70% of our
portfolio by appraised value as of January 31, 2005 operated in Latin America,
principally Brazil, Mexico and Colombia. The prospects for lessee operations in
these countries depend in part on the general level of political stability and
economic activity and policies in those countries. Further developments in the
political systems or economies of these countries or the implementation of
future governmental policies in these countries may materially affect these
lessees' operations.

Economic volatility may increase in these and other emerging markets which may
cause further difficulties for our lessees.


                                       19
<PAGE>


A former Brazilian lessee of three MD-11 aircraft was in arrears. The servicer,
following discussions with the lessee agreed to the early return of the aircraft
during 2003. The servicer signed a settlement agreement in 2004 in respect of
the lessee's obligations and the lessee is current in respect of these
obligations.

At December 31, 2004, a former Brazilian lessee of three B737-500 aircraft,
representing 2.36% of our portfolio by appraised value at January 31, 2005 was
in arrears. The servicer agreed to the early return of the aircraft prior to
March 31, 2003 and signed a settlement agreement in 2004 in respect of the
lessee's obligations. The lessee is current in respect of these obligations.

A second Brazilian lessee of eight F-100 aircraft representing 3.23% of our
portfolio by appraised value as of January 31, 2005, has signed a restructuring
agreement, which provided for rental deferrals of 35% to 50% for the period to
December 2002, with repayment before the expiry of the current leases in 2007
and 2008. The lessee has to date continued to meet its obligations under the
agreement.

At December 31, 2004 a Brazilian lessee of one DC8-71F aircraft, representing
0.32% of our portfolio by appraised value at January 31, 2005, was experiencing
trading difficulties. The servicer has taken redelivery of the aircraft from the
lessee since December 31, 2004, and is pursuing the lessee for its outstanding
obligations.

At December 31, 2004, we leased nine aircraft, representing 8.34% of our
portfolio by appraised value at January 31, 2005 to two Colombian lessees.
Continued weakness in the value of the Colombian Peso, as well as general
deterioration in the Colombian economy, may mean that these lessees will be
unable to generate sufficient revenues in the Colombian currency to pay the U.S.
dollar denominated rental payments under the leases.

At December 31, 2004, we leased seven aircraft (included in the nine aircraft
mentioned in the preceding paragraph) to one Colombian lessee, representing
7.77% of our portfolio by appraised value at January 31, 2005. The lessee, which
emerged from Chapter 11 bankruptcy protection in the U.S. in December 2004, is
current in respect of its obligations which were restructured during the year
ended March 31, 2004.

Asia and the Far East

As at December 31, 2004, we leased 26 aircraft representing 17.34% of our
portfolio by appraised value as of January 31, 2005 to 13 lessees in this
region. Since 1999, there has been some stabilization and recovery in the
economies of this region.

A decline in tourism in this area may adversely affect demand for aircraft in
the region. For example, in the final quarter of the year ended March 31, 2003,
this region in particular, was subject to the outbreak of SARS. This led to
widespread disruption in travel within and from outside the region. Airlines
suffered substantial cutbacks in the number of passengers travelling and many
flight schedules were reduced. These factors adversely affected the ability of
lessees in the region to make payments under their leases. Indications up to
late 2004 were that the region had recovered and experienced traffic growth. On
December 26, 2004, South East Asia was struck by a tsunami, causing severe
devastation in the region. Current indications are that this is regionalized and
may not affect air traffic. However, there are likely to be knock-on effects on
tourism, which may adversely affect travel and lessees in the region.


                                       20
<PAGE>


At December 31, 2004 a former Indonesian lessee of two aircraft representing
0.14% of our portfolio by appraised value as of January 31, 2005 was in arrears.
During the three month period ended December 31, 2004 these two aircraft were
redelivered.
The servicer is currently in discussions regarding outstanding amounts. A letter
of intent for sale has been signed in relation to these aircraft.

Africa

At December 31, 2004 we leased five aircraft representing 5.7% of our portfolio
by appraised value at January 31, 2005 to lessees in Africa.

Other

At December 31, 2004, we also leased three aircraft representing 2.52% of our
portfolio by appraised value as of January 31, 2005 to a lessee in Ukraine and
one aircraft representing 0.16% of our portfolio by appraised value as of
January 31, 2005 to a lessee in Australia.

Compliance with Governmental and Technical Regulation

In addition to the general requirements regarding maintenance of the aircraft,
aviation authorities from time to time issue ADs requiring the operators of
aircraft to take particular maintenance actions or make particular modifications
with respect to all aircraft of a particular type. Manufacturer recommendations
may also be issued. To the extent that a lessee fails to perform ADs that are
required to maintain its certificate of airworthiness or other manufacturer
requirements in respect of an aircraft (or if the aircraft is not currently
subject to a lease), Airplanes Group may have to bear or share (if the lease
requires it) the cost of compliance. Other governmental regulations relating to
noise and emissions levels may be imposed not only by the jurisdictions in which
the aircraft are registered, including as part of the airworthiness
requirements, but also in other jurisdictions where the aircraft operate. A
number of jurisdictions including the United States have adopted, or are in the
process of adopting, noise regulations which ultimately will require all
aircraft to comply with the most restrictive currently applicable standards.
Some of the jurisdictions that impose these regulations restrict the future
operation of aircraft that do not meet Stage 3 noise requirements and prohibit
the operation of those aircraft in those jurisdictions. As 0.96% of our
portfolio by appraised value as of January 31, 2005 did not meet the Stage 3
requirements as of March 31, 2004, these regulations may adversely affect
Airplanes Group because our non-compliant aircraft will not be able to operate
in those jurisdictions and we may incur substantial costs to comply with the
Stage 3 requirements.

Moreover new ADs or noise or emissions reduction requirements may be adopted in
the future and these could result in significant costs to Airplanes Group or
adversely affect the value of, or our ability to re-lease, Stage 2 or Stage 3
aircraft. In particular, certain organizations and jurisdictions are currently
considering "Stage 4" requirements which would tighten noise and emissions
certification requirements for newly manufactured aircraft. If these more
restrictive requirements are adopted or applied to existing aircraft types, it
could result in significant costs to Airplanes Group or adversely affect the
value of, or our ability to re-lease, aircraft in our portfolio.

Volume 2 of Annex 16 of the Chicago Convention also contains standards and
recommendations regarding limitations on vented fuel and smoke and gaseous
emissions for aircraft. While a number of countries have adopted regulations
implementing these recommendations, these regulations generally have been
prospective in nature, requiring only that newly manufactured engines meet
particular


                                       21
<PAGE>


standards after a particular date. To the extent that these regulations require
modifications to the engines owned by Airplanes Group, they would be treated
similarly to ADs under the leases.

Aviation authorities in Europe and North America have adopted regulations
requiring the installation of traffic collision avoidance systems, automatic
emergency locator transmitters and various other systems. Depending on whether
the costs of complying with these regulations are borne by us or the lessees,
installation of these systems could result in significant cash capital
expenditures by Airplanes Group in the future. In addition to the ADs discussed
below, we currently expect that the FAA and other aviation authorities may issue
further ADs to improve security on aircraft.

One requirement is the installation of enhanced Ground Proximity Warning System
("GPWS") in all aircraft by 2005, which has been mandated by the FAA and the
European Joint Airworthiness Authorities. GPWS is an avionics system which
detects an aircraft's proximity to the earth. The enhanced version enables the
system to correlate the aircraft's current position with a database of
obstructions in the horizontal plane (high mountain peaks, buildings, antennae
etc). All new generation Airbus and Boeing aircraft have GPWS and require only a
software upgrade. For the majority of our aircraft, installation of GPWS will
require the full modification, some of which we expect will be completed under
cost sharing arrangements with lessees. The estimated cost to implement this
modification is $120,000 per aircraft. To the extent that compliance with this
or any further such ADs is not the responsibility of lessees under their leases,
or if the aircraft are not on lease, we may incur significant costs.

The FAA issued an AD concerning insulation for the purpose of increasing fire
safety on MD-80 aircraft. At December 31, 2004, 24 aircraft representing 14.02%
of the portfolio by appraised value as of January 31, 2005, were MD-80s. We will
incur significant costs in ensuring these aircraft comply with these standards.
It is estimated that the necessary modification of the 24 aircraft will cost
approximately $9.3 million. To date, we have completed the modification of 13
aircraft at a cost of $6.1 million. We expect to complete the modification of
the remaining aircraft by December 31, 2007 at an estimated cost of $3.2
million.

The FAA has issued an AD mandating the modification of affected lap joints on
Boeing 737 aircraft when an aircraft has completed 50,000 cycles. The estimated
cost to implement those modifications for each aircraft is approximately
$230,000. Based on the current cycles completed to date, our 53 Boeing 737
aircraft, representing 38.22% of our portfolio by appraised value at January 31,
2005, are not likely to require these modifications prior to 2007. However,
after that date we will incur significant costs in ensuring our Boeing 737
aircraft comply with these standards.

In early 2004 Boeing discovered cracks at the lap joint areas on a number of
B737-200/300/400/500 aircraft ("B737 classics"), which were caused by scribe
marks from sharp instruments used in paint, sealant and de-cal removal. As of
November 2004, per Boeing information, fifty B737 classics out of 77 aircraft
inspections were reported to have scribes (28 B737-200's, 18 B737-300's, 4
B73-400's). Also reported were scribe findings on five B747's, two B767's, and
two B757's. Boeing released Service Bulletin S/B 737-53A1262 in December 2004,
which is yet to be mandated by the FAA. This is expected to happen latter this
year. S/B 737-53A1262 proposes a zonal inspection approach with inspections
based on aircraft total cycles and cycles since first paint. This zonal approach
will establish the time at which the first inspection must be accomplished. The
servicer is assessing our portfolio of B737 aircraft to determine the extent of
the exposure for our fleet.

The FAA has issued an AD affecting all Boeing 737 aircraft, mandating the
installation of a new rudder


                                       22
<PAGE>


power control unit and changes to adjacent systems in order to rectify an unsafe
condition which has led to a jammed or restricted control of the rudder in the
past. Most of the cost of these modifications is expected to be covered by the
manufacturer, with the operators only being responsible for the labour costs of
the modifications, estimated at $20,000 per aircraft and is to be completed
before November 2008. If the costs are not the responsibility of some or all
lessees under their leases, or if the aircraft are not on lease, we could incur
significant costs in ensuring that our 53 Boeing 737 aircraft comply with these
modifications.

In light of the events of September 11, 2001, the FAA issued Special Federal
Aviation Regulation Amendments mandating the installation of ballistic and blunt
impact resistance flight doors allowing for controlled cockpit access as well as
emergency ingress and egress to and from the cockpit. Other aviation authorities
subsequently mandated similar requirements. All of our aircraft which are on
lease and subject to these requirements, either have been, or are expected to
be, modified in accordance with the relevant requirements. The estimated cost
varies across aircraft type depending on the current door configuration but
averaging approximately $40,000. There may be further requirements in this area
relating to transponder upgrades and on board video surveillance systems in the
near future. As regulations currently stand the majority of aircraft have been
modified by the lessee with no cost to us.

However, such requirements may increase remarketing costs for aircraft currently
off lease or which are returned to us over the next twelve months.

The incurrence of any of the foregoing costs will further adversely impact our
results of operations.


                                       23
<PAGE>


Results of Operations - Three Month Period Ended December 31, 2004 Compared with
Three Month Period Ended December 31, 2003.

Airplanes Group's results for the three month period ended December 31, 2004
reflected a continuation of the difficult trading conditions for the aviation
industry which gave rise to lessees seeking a variety of rental restructurings
including rental reductions and deferrals. These restructurings will continue to
have a significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

Airplanes Group generated $46 million in cash from operations in the three month
period ended December 31, 2004 compared to $17 million in the same period of the
previous year. The increase in cash generated from operations in the three month
period ended December 31, 2004 is primarily attributable to lower interest
payments, positive maintenance cashflows, recovery of amounts under lease
restructuring agreements and was partially offset by greater aircraft downtime
and reduced rentals as a result of aircraft sales in previous periods. Cashflow
will continue to be adversely affected by the factors outlined above.

There was a net loss after taxation for the three month period ended December
31, 2004 of $276 million (Airplanes Limited: $240 million; Airplanes Trust: $36
million) compared to a net loss after taxation for the three month period ended
December 31, 2003 of $327 million (Airplanes Limited: $295 million; Airplanes
Trust: $32 million). Excluding accrued but unpaid class E note interest and
impairment charges, the movement from a loss of $36 million to a loss of $20
million for the three month period ended December 31, 2004 was primarily
attributable to an increase in profit from aircraft sales, lessee receipts under
the terms of restructuring agreements and decreased other lease costs.

Leasing Revenues

Leasing revenues for the three month period ended December 31, 2004 were $41
million (Airplanes Limited: $40 million; Airplanes Trust: $1 million) compared
with $45 million (Airplanes Limited: $43 million; Airplanes Trust: $2 million)
for the three month period ended December 31, 2003. At December 31, 2004, we had
140 of our 154 aircraft on lease (Airplanes Limited: 130 aircraft; Airplanes
Trust: 10 aircraft) compared to 155 of our 174 aircraft on lease (Airplanes
Limited: 145 aircraft; Airplanes Trust: 10 aircraft) at December 31, 2003.

Other Income

During the three month period ended December 31, 2004, Airplanes Group received
$7 million (Airplanes Limited: $7 million; Airplanes Trust: $Nil) under
agreements signed with three lessees following their emergence from bankruptcy
protection.

Impairment Provisions

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. An impairment review is required whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The
statement requires an assessment for impairment when an asset's carrying value
is greater than its estimated undiscounted future cashflows. Impairments are
measured by the excess of carrying value over fair value. Following
consideration of the independent appraisers values and estimated future
cashflows from rentals or sales proceeds to be generated by


<PAGE>


our aircraft, a SFAS 144 assessment resulted in the requirement for an
impairment provision of $10 million (Airplanes Limited: $Nil; Airplanes Trust:
$10 million) in the three month period ended December 31, 2004 compared with $71
million (Airplanes Limited: $60 million; Airplanes Trust $11 million) in the
three month period ended December 31, 2003.

Depreciation and Amortization

The charge for depreciation and amortization in the three month period ended
December 31, 2004 amounted to $20 million (Airplanes Limited: $19 million;
Airplanes Trust: $1 million) as compared with $21 million (Airplanes Limited:
$20 million; Airplanes Trust: $1 million) for the three month period ended
December 31, 2003. The reduction in the charge in the three month period ended
December 31, 2004 resulted primarily from the reduced depreciable value of the
fleet following impairment provisions made.

Net Interest Expense

Net interest expense was $274 million (Airplanes Limited: $250 million;
Airplanes Trust: $24 million), of which $38 million related to interest on the
class A to D notes and swaps and $236 million related to interest on the class E
notes, in the three month period ended December 31, 2004 compared to $217
million (Airplanes Limited: $198 million; Airplanes Trust: $19 million), of
which $37 million related to interest on the class A to D notes and swaps and
$180 million related to interest on the class E notes, in the three month period
ended December 31, 2003. The increase in the amount of interest charged was
primarily due to additional interest charged on accrued but unpaid class E note
interest of $57 million, partially offset by lower average debt and interest
rates in the three month period ended December 31, 2004.

The weighted average interest rate on the class A to D notes during the three
month period ended December 31, 2004 was 5.62% and the average debt in respect
of the class A to D notes outstanding during the period was $2,401 million. The
class E notes together with the accrued but unpaid class E note interest, accrue
interest at a rate of 20% per annum, (as adjusted by reference to the U.S.
consumer price index with effect from March 28, 1996).

The weighted average interest rate on the class A to D notes during the three
month period to December 31, 2003 was 5.87% and the average debt in respect of
the class A to D notes outstanding during the period was $2,574 million.

The difference for the three month period ended December 31, 2004 in Airplanes
Group's net interest expense of $274 million (Airplanes Limited: $250 million;
Airplanes Trust: $24 million) and cash paid in respect of interest of $14
million (Airplanes Limited: $13 million; Airplanes Trust: $1 million) is
substantially accounted for by the fact that interest on the class E notes is
accrued but unpaid and that the interest on the class B, C and D notes is now
also being accrued and not paid.

Net interest expense is stated after deducting interest income earned during the
relevant period. In the three month period ended December 31, 2004, Airplanes
Group earned interest income (including lessee default interest) of $Nil
compared with $1 million in the three month period ended December 31, 2003
(Airplanes Limited: $1 million; Airplanes Trust: $Nil).

Bad Debt Provisions

Airplanes Group's practice is to provide specifically for any amounts due but
unpaid by lessees based primarily on the amount due in excess of security held
and also taking into account the financial


                                       25
<PAGE>


strength and condition of a lessee and the economic conditions existing in the
lessee's operating environment. While a number of Airplanes Group's lessees
failed to meet their contractual obligations in the three month period ended
December 31, 2004, resulting in the requirement for additional provisions in
respect of bad and doubtful debts in respect of these lessees, the credit
exposure with regard to certain other carriers improved in the period. Overall,
there was a net release of provisions of $1 million (Airplanes Limited: $1
million; Airplanes Trust: $Nil) in respect of bad and doubtful debts in the
three month period ended December 31, 2004 compared with a release of provisions
of $2 million (Airplanes Limited: $1 million; Airplanes Trust: $1 million) for
the three month period ended December 31, 2003.

Other Lease Costs

Other lease costs, comprising aircraft related technical expenditure associated
with remarketing the aircraft, in the three month period ended December 31, 2004
amounted to $4 million (Airplanes Limited: $4 million; Airplanes Trust: $Nil)
compared with other lease costs of $8 million (Airplanes Limited: $7 million;
Airplanes Trust: $1 million) in the three month period ended December 31, 2003.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period ended
December 31, 2004 amounted to $8 million (Airplanes Limited: $8 million;
Airplanes Trust: $Nil) as compared to the expense that was incurred in the three
month period ended December 31, 2003 of $13 million (Airplanes Limited: $12
million; Airplanes Trust: $1 million).

The most significant element of selling, general and administrative expenses is
the aircraft servicing fees paid to the servicer. Substantially all of these
amounts represent asset based fees calculated as an annual percentage of agreed
values of aircraft under management pursuant to a servicing agreement. Selling,
general and administrative expenses in the three month period ended December 31,
2004 included $6 million (Airplanes Limited: $6 million; Airplanes Trust:$Nil)
relating to servicing fees, as compared to the three month period ended December
31, 2003, which included $5 million (Airplanes Limited: $5 million; Airplanes
Trust: $Nil) relating to servicing fees.

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the three month period ended December 31,
2004 was $1 million (Airplanes Limited: $1 million; Airplanes Trust: $Nil) in
respect of administrative agency and cash management fees payable to
subsidiaries of debis AirFinance Ireland, compared to the charge of $1 million
(Airplanes Limited: $1 million; Airplanes Trust $Nil) for the three month period
ended December 31, 2003.

Operating Loss on Continuing Operations

The operating loss on continuing operations for the three month period ended
December 31, 2004 was $267 million (Airplanes Limited: $233 million; Airplanes
Trust: $34 million) compared with an operating loss of $283 million for the
three month period ended December 31, 2003 (Airplanes Limited: $253 million;
Airplanes Trust: $30 million). Airplanes Limited and Airplanes Trust are
expected to continue to report substantial losses in the future.


                                       26
<PAGE>


Taxes

There was a tax charge of $2 million (Airplanes Limited: $Nil; Airplanes Trust:
$2 million) in the three month period ended December 31, 2004, as compared with
a tax charge of $1 million (Airplanes Limited: $Nil; Airplanes Trust: $1
million) for the three month period ended December 31, 2003.

Net Loss on Continuing Operations

The net loss after taxation on continuing operations for the three month period
ended December 31, 2004 was $269 million (Airplanes Limited: $233 million;
Airplanes Trust: $36 million) compared with a net loss after taxation on
continuing operations for the three month period ended December 31, 2003 of $284
million (Airplanes Limited: $253 million; Airplanes Trust: $31 million).

Discontinued Operations

Sales proceeds of $4 million (Airplanes Limited: $4 million; Airplanes Trust:
$Nil) in respect of the sale of two MD83 aircraft, were received in the three
month period ended December 31, 2004. The net book value of the aircraft sold
was $2 million (Airplanes Limited: $2 million; Airplanes Trust: $Nil). Lease
rentals of $2 million (Airplanes Limited: $2 million, Airplanes Trust: $Nil),
depreciation of $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil) and impairment charges of $10 million (Airplanes Limited: $10 million;
Airplanes Trust: $Nil) have been included in discontinued operations.

In the three month period ended December 31, 2003, the aircraft sold, along with
the aircraft classified as "held for sale" at December 31, 2004, had generated
lease revenue of $4 million (Airplanes Limited: $4 million; Airplanes Trust:
$Nil) and had incurred impairment charges of $40 million (Airplanes Limited: $40
million; Airplanes Trust: $Nil) and depreciation of $7 million (Airplanes
Limited: $6 million; Airplanes Trust: $1 million). The net loss of $43 million
(Airplanes Limited: $42 million; Airplanes Trust: $1 million) has been included
in discontinued operations in the three month period ended December 31, 2003.

Net Loss after Taxation and Discontinued Operations

The net loss after taxation and discontinued operations for the three month
period ended December 31, 2004 was $271 million (Airplanes Limited: $240
million; Airplanes Trust: $31 million) compared with a net loss after taxation
and discontinued operations for the three month period ended December 31, 2003
of $327 million (Airplanes Limited: $295 million; Airplanes Trust: $32 million).


                                       27
<PAGE>


Financial Resources and Liquidity

Commentary on Statement of Cashflows

The factors discussed above at "Recent Developments" continue to impair our
cashflows.

Liquidity

Cash balances at December 31, 2004 amounted to $103 million (Airplanes Limited:
$97 million; Airplanes Trust: $6 million) compared to cash balances at December
31, 2003 of $95 million (Airplanes Limited: $89 million; Airplanes Trust: $6
million).

Operating Activities

Net cash provided by operating activities in the three month period ended
December 31, 2004 amounted to $46 million (Airplanes Limited: $38 million;
Airplanes Trust: $8 million) compared with $17 million in the three month period
ended December 31, 2003 (Airplanes Limited: $13 million; Airplanes Trust: $4
million). This includes cash paid in respect of interest of $14 million in the
three month period ended December 31, 2004 (Airplanes Limited: $13 million;
Airplanes Trust: $1 million) compared with $30 million in the three month period
ended December 31, 2003 (Airplanes Limited: $28 million; Airplanes Trust: $2
million). The increase in cash provided by operating activities in the three
month period ended December 31, 2004 is primarily attributable to reduced
interest payments, positive maintenance cashflows and lease revenue receipts due
from lease restructurings.

Investing and Financing Activities

Cashflows provided by investing activities in the three month period ended
December 31, 2004 were $4 million (Airplanes Limited: $4 million; Airplanes
Trust: $Nil). This includes proceeds of $4 million (Airplanes Limited: $4
million; Airplanes Trust: $Nil) from the sale of two MD83 aircraft. In the three
month period ended December 31, 2003, cashflows provided by investing activities
were $1 million (Airplanes Limited: $1 million; Airplanes Trust: $Nil). This
included proceeds of $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil) from the sale of one Metro III aircraft and one A300 aircraft.

Cashflows used in financing activities in the three month period ended December
31, 2004 primarily reflect the repayment of $86 million of principal on subclass
A-6 and subclass A-8 notes by Airplanes Group (Airplanes Limited: $78 million;
Airplanes Trust: $8 million) compared with $44 million of principal repaid on
subclass A-6 notes and class B notes by Airplanes Group (Airplanes Limited: $40
million; Airplanes Trust: $4 million) in the three month period ended December
31, 2003.


                                       28
<PAGE>


Indebtedness

Airplanes Group's indebtedness consisted of class A to E notes in the amount of
$2,965 million (Airplanes Limited: $2,698 million; Airplanes Trust: $267
million) at December 31, 2004 and $3,144 million (Airplanes Limited: $2,861
million; Airplanes Trust: $283 million) at December 31, 2003. Airplanes Group's
outstanding publicly traded class A to D notes amounted to $2,374 million
(Airplanes Limited: $2,160 million; Airplanes Trust: $214 million) at December
31, 2004 and $2,553 million (Airplanes Limited: $2,323 million; Airplanes Trust:
$230 million) at December 31, 2003. Airplanes Group had $591 million class E
notes outstanding at December 31, 2004 and December 31, 2003.

Airplanes Group was due to refinance the subclass A-8 certificates and notes on
March 15, 2003. Given market conditions and the impact these conditions have had
on our performance as compared to the 2001 Base Case, a refinancing at that time
was not economically viable. Step-up interest has therefore accrued on the
subclass A-8 certificates and notes since March 15, 2003. However, due to
insufficient cashflows and the low priority of step-up interest in the priority
of payments, no step-up interest has been paid.

Prior to March 15, 2003, on each payment date the priority of the principal
amounts outstanding in respect of the various subclasses of class A certificates
and notes was subclass A-6, subclass A-9 and subclass A-8 in that order. Because
there was no refinancing of the subclass A-8 notes by March 15, 2003, the
priority of the principal amounts outstanding in respect of the various
subclasses of class A certificates and notes is now subclass A-8 and subclass
A-9 in that order (the subclass A-6 notes having been repaid on October 15,
2004).


                                       29
<PAGE>


Results of Operations - Nine Month Period Ended December 31, 2004 Compared with
Nine Month Period Ended December 31, 2003.

Airplanes Group's results for the nine month period ended December 31, 2004
reflected a continuation of the difficult trading conditions for the aviation
industry which gave rise to lessees seeking a variety of rental restructurings
including rental reductions and deferrals. These restructurings will continue to
have a significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

Airplanes Group generated $108 million in cash from operations in the nine month
period ended December 31, 2004 compared to $27 million in the same period of the
previous year. The increase in cash generated from operations in the nine month
period ended December 31, 2004 is primarily attributable to lower interest
payments and positive maintenance cashflows, partially offset by a reduction in
lease revenues due to an increased level of lease restructurings and to a lesser
extent, to greater aircraft downtime and reduced rentals as a result of aircraft
sales in previous periods. Cashflow will continue to be adversely affected by
the factors outlined above.

There was a net loss after taxation for the nine month period ended December 31,
2004 of $734 million (Airplanes Limited: $658 million; Airplanes Trust: $76
million) compared to a net loss after taxation for the nine month period ended
December 31, 2003 of $946 million (Airplanes Limited: $861 million; Airplanes
Trust: $85 million). Excluding accrued but unpaid class E note interest and
impairment charges, the movement from a loss of $87 million to a loss of $23
million for the nine month period ended December 31, 2004 was primarily
attributable to an increase in profit from aircraft sales, decreased
depreciation and other lease costs, partially offset by a reduction in lease
rentals.

Leasing Revenues

Leasing revenues for the nine month period ended December 31, 2004 were $136
million (Airplanes Limited: $130 million; Airplanes Trust: $6 million) compared
with $147 million (Airplanes Limited: $139 million; Airplanes Trust: $8 million)
for the nine month period ended December 31, 2003. The decrease in 2004 was
primarily attributable to rental reductions and the number of aircraft which
were off lease during the nine month period ended December 31, 2004. At December
31, 2004, we had 140 of our 154 aircraft on lease (Airplanes Limited: 130
aircraft; Airplanes Trust: 10 aircraft) compared to 155 of our 174 aircraft on
lease (Airplanes Limited: 145 aircraft; Airplanes Trust: 10 aircraft) at
December 31, 2003.

Other Income

During the nine month period ended December 31, 2004, Airplanes Group received
$7 million (Airplanes Limited: $7 million; Airplanes Trust: $Nil) under
agreements signed with three lessees following their emergence from bankruptcy
protection.

Impairment Provisions

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. An impairment review is required whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The
statement requires an assessment for impairment when


                                       30
<PAGE>


an asset's carrying value is greater than its estimated undiscounted future
cashflows. Impairments are measured by the excess of carrying value over fair
value. Following consideration of the independent appraisers values and
estimated future cashflows from rentals or sales proceeds, to be generated by
our aircraft a SFAS 144 assessment resulted in the requirement for an impairment
provision of $29 million (Airplanes Limited: $19 million; Airplanes Trust: $10
million) in the nine month period ended December 31, 2004 compared with $245
million (Airplanes Limited: $226 million; Airplanes Trust:$19 million) in the
nine month period ended December 31, 2003.

Depreciation and Amortization

The charge for depreciation and amortization in the nine month period ended
December 31, 2004 amounted to $61 million (Airplanes Limited: $59 million;
Airplanes Trust: $2 million) as compared with $77 million (Airplanes Limited:
$73 million; Airplanes Trust: $4 million) for the nine month period ended
December 31, 2003. The reduction in the charge in the nine month period ended
December 31, 2004 resulted primarily from the reduced depreciable value of the
fleet following the impairment provisions made in prior periods.

Net Interest Expense

Net interest expense was $775 million (Airplanes Limited: $706 million;
Airplanes Trust: $69 million), of which $110 million related to interest on the
class A to D notes and swaps and $665 million related to interest on the class E
notes, in the nine month period ended December 31, 2004 compared to $626 million
(Airplanes Limited: $570 million; Airplanes Trust: $26 million), of which $117
million related to interest on the class A to D notes and swaps and $509 million
related to interest on the class E notes, in the nine month period ended
December 31, 2003. The increase in the amount of interest charged was primarily
due to additional interest charged on accrued but unpaid class E note interest
of $156 million, partially offset by lower average debt and interest rates in
the nine month period ended December 31, 2004.

The weighted average interest rate on the class A to D notes during the nine
month period ended December 31, 2004 was 5.78% and the average debt in respect
of the class A to D notes outstanding during the period was $2,460 million. The
class E notes together with the accrued but unpaid class E note interest, accrue
interest at a rate of 20% per annum, (as adjusted by reference to the U.S.
consumer price index with effect from March 28, 1996).

The weighted average interest rate on the class A to D notes during the nine
month period to December 31, 2003 was 6.06% and the average debt in respect of
the class A to D notes outstanding during the period was $2,604 million.

The difference for the nine month period ended December 31, 2004 in Airplanes
Group's net interest expense of $775 million (Airplanes Limited: $706 million;
Airplanes Trust: $69 million) and cash paid in respect of interest of $44
million (Airplanes Limited: $41 million; Airplanes Trust: $3 million) is
substantially accounted for by the fact that interest on the class E notes is
accrued but unpaid and that the interest on the class B, C and D notes is now
also being accrued and not paid.

Net interest expense is stated after deducting interest income earned during the
relevant period. In the nine month period ended December 31, 2004, Airplanes
Group earned interest income (including lessee default interest) of $2 million
(Airplanes Limited: $2 million; Airplanes Trust; $Nil), compared with $2 million
in the nine month period ended December 31, 2003 (Airplanes Limited: $2 million;
Airplanes Trust: $Nil).


                                       31
<PAGE>


Bad Debt Provisions

Airplanes Group's practice is to provide specifically for any amounts due but
unpaid by lessees based primarily on the amount due in excess of security held
and also taking into account the financial strength and condition of a lessee
and the economic conditions existing in the lessee's operating environment.
While a number of Airplanes Group's lessees failed to meet their contractual
obligations in the nine month period ended December 31, 2004, resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these lessees, the credit exposure with regard to certain other
carriers improved in the period. Overall, there was a net release of provisions
of $6 million (Airplanes Limited: $6 million; Airplanes Trust: $Nil) in respect
of bad and doubtful debts in the nine month period ended December 31, 2004
compared with a net provision of $1 million (Airplanes Limited: $1 million;
Airplanes Trust: $Nil) for the nine month period ended December 31, 2003.

Other Lease Costs

Other lease costs comprising aircraft related technical expenditure associated
with remarketing the aircraft, in the nine month period ended December 31, 2004
amounted to $8 million (Airplanes Limited: $8 million; Airplanes Trust: $Nil)
compared with other lease costs of $23 million (Airplanes Limited: $22 million;
Airplanes Trust: $1 million) in the nine month period ended December 31, 2003.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine month period ended
December 31, 2004 amounted to $24 million (Airplanes Limited: $23 million;
Airplanes Trust: $1 million) as compared to the expense that was incurred in the
nine month period ended December 31, 2003 of $29 million (Airplanes Limited: $27
million; Airplanes Trust: $2 million).

The most significant element of selling, general and administrative expenses is
the aircraft servicing fees paid to the servicer. Substantially all of these
amounts represent asset based fees calculated as an annual percentage of agreed
values of aircraft under management pursuant to a servicing agreement. Selling,
general and administrative expenses in the nine month period ended December 31,
2004 and the nine month period ended December 31, 2003 include $18 million
(Airplanes Limited: $17 million; Airplanes Trust: $1 million) relating to
servicing fees.

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the nine month period ended December 31,
2004 was $4 million (Airplanes Limited: $4 million; Airplanes Trust: $Nil) in
respect of administrative agency and cash management fees payable to
subsidiaries of debis AirFinance Ireland, compared to the charge of $4 million
(Airplanes Limited: $4 million; Airplanes Trust: $Nil) for the nine month period
ended December 31, 2003.

Operating Loss on Continuing Operations

The operating loss on continuing operations for the nine month period ended
December 31, 2004 was $748 million (Airplanes Limited: $672 million; Airplanes
Trust: $76 million) compared with an operating loss of $854 million for the nine
month period ended December 31, 2003 (Airplanes Limited: $780 million; Airplanes
Trust: $74 million). Airplanes Limited and Airplanes Trust are expected to
continue to report substantial losses in the future.


                                       32
<PAGE>


Taxes

There was a tax charge of $3 million (Airplanes Limited: $Nil; Airplanes Trust:
$3 million) in the nine month period ended December 31, 2004, as compared with a
tax benefit of $16 million (Airplanes Limited: $13 million; Airplanes Trust: $3
million) for the nine month period ended December 31, 2003. The benefit in the
nine month period ended December 31, 2003 relates primarily to a release of
deferred tax provisions in the Irish subsidiary companies which were deemed
unnecessary due to the level of losses forward.

Net Loss on continuing operations

The net loss on continuing operations after taxation for the nine month period
ended December 31, 2004 was $751 million (Airplanes Limited: $672 million;
Airplanes Trust: $79 million) compared with a net loss on continuing operations
after taxation for the nine month period ended December 31, 2003 of $838 million
(Airplanes Limited: $767 million; Airplanes Trust: $71 million).

Discontinued Operations

Sales proceeds of $57 million (Airplanes Limited: $52 million; Airplanes Trust:
$5 million) in respect of the sale of three MD11 aircraft, three DC9-32
aircraft, five DC8-71F aircraft, two MD83 aircraft, one DHC8-300C, one B737-200A
and one A300C4-200, were received in the nine month period ended December 31,
2004. The net book value of the aircraft sold was $27 million (Airplanes
Limited: $25 million; Airplanes Trust: $2 million). These aircraft, along with
the aircraft currently classified as "held for sale", had generated lease
rentals of $5 million (Airplanes Limited: $5 million; Airplanes Trust: $Nil),
had incurred depreciation charges of $1 million (Airplanes Limited: $1 million;
Airplanes Trust: $Nil) and incurred impairment charges of $17 million (Airplanes
Limited: $17 million; Airplanes Trust: $Nil) in the nine month period ended
December 31, 2004. The net loss of $17 million (Airplanes Limited: $17 million;
Airplanes Trust: $Nil) has been included in discontinued operations.

In the nine month period ended December 31, 2003, the sixteen aircraft sold in
the nine month period ended December 31, 2004 along with the aircraft currently
classified as "held for sale", had generated lease revenue of $14 million
(Airplanes Limited: $14 million; Airplanes Trust: $Nil) and had incurred
impairment charges of $105 million (Airplanes Limited: $92 million; Airplanes
Trust: $13 million) and depreciation charges of $16 million (Airplanes Limited:
$15 million; Airplanes Trust: $1 million). Sales proceeds of $2 million
(Airplanes Limited: $2 million; Airplanes Trust: $Nil) in respect of the sale of
one DC9-51 and three Metro III aircraft and one A300 aircraft were received in
the nine month period ended December 31, 2003. The net book value of the
aircraft sold was $3 million (Airplanes Limited: $3 million; Airplanes Trust:
$Nil). The net loss of $108 million (Airplanes Limited: $94 million; Airplanes
Trust: $14 million) relating to aircraft sold, and the aircraft held for sale,
has been included in discontinued operations in the nine month period ended
December 31, 2003.

Net Loss after Taxation and Discontinued Operations

The net loss after taxation and discontinued operations for the nine month
period ended December 31, 2004 was $734 million (Airplanes Limited: $658
million; Airplanes Trust: $76 million) compared with a net loss after taxation
and discontinued operations for the nine month period ended December 31, 2003 of
$946 million (Airplanes Limited: $861 million; Airplanes Trust: $85 million).


                                       33
<PAGE>


Financial Resources and Liquidity

Commentary on Statement of Cashflows

The factors discussed above at "Recent Developments" continue to impair our
cashflows.

Liquidity

Cash balances at December 31, 2004 amounted to $103 million (Airplanes Limited:
$97 million; Airplanes Trust: $6 million) compared to cash balances at December
31, 2003 of $95 million (Airplanes Limited: $89 million; Airplanes Trust: $6
million).

Operating Activities

Net cash provided by operating activities in the nine month period ended
December 31, 2004 amounted to $108 million (Airplanes Limited: $100 million;
Airplanes Trust: $8 million) compared with $27 million in the nine month period
ended December 31, 2003 (Airplanes Limited: $20 million; Airplanes Trust: $7
million). This includes cash paid in respect of interest of $44 million
(Airplanes Limited: $40 million; Airplanes Trust: $4 million) in the nine month
period ended December 31, 2004 compared with $108 million (Airplanes Limited:
$99 million; Airplanes Trust: $9 million) in the nine month period ended
December 31, 2003. The increase in cash provided by operating activities in the
nine month period ended December 31, 2004 is primarily attributable to aircraft
sales proceeds and positive maintenance cashflows, partially offset by a
reduction in lease revenues due to lease restructurings and, to a lesser extent,
greater aircraft downtime.

Investing and Financing Activities

Cashflows provided by investing activities in the nine month period ended
December 31, 2004 were $57 million (Airplanes Limited: $52 million; Airplanes
Trust: $5 million). This includes proceeds of $56 million (Airplanes Limited:
$51 million; Airplanes Trust: $5 million) from the sale of two MD83 aircraft,
five DC8-71F aircraft, one B737-200A aircraft, three MD11 aircraft, three DC9-32
aircraft, one A300C4-200 aircraft and one DHC8 aircraft. In the nine month
period ended December 31, 2003, cashflows provided by investing activities
included the receipt of $2 million (Airplanes Limited: $2 million; Airplanes
Trust: $Nil) in relation to the sale of one A300 aircraft, one DC9-51 aircraft
and three Metro III aircraft.

Cashflows used in financing activities in the nine month period ended December
31, 2004 primarily reflect the repayment of $145 million of principal on
subclass A-6 notes and subclass A-8 notes by Airplanes Group (Airplanes Limited:
$132 million; Airplanes Trust: $13 million) compared with $74 million of
principal repaid on subclass A-6 notes and class B notes by Airplanes Group
(Airplanes Limited: $67 million; Airplanes Trust: $7 million) in the nine month
period ended December 31, 2003.


Indebtedness

Airplanes Group's indebtedness consisted of class A to E notes in the amount of
$2,965 million (Airplanes Limited: $2,698 million; Airplanes Trust: $267
million) at December 31, 2004 and $3,144 million (Airplanes Limited: $2,861
million; Airplanes Trust: $283 million) at December 31, 2003. Airplanes Group's
outstanding publicly traded class A to D notes amounted to $2,374 million


                                       34
<PAGE>


(Airplanes Limited: $2,160 million; Airplanes Trust: $214 million) at December
31, 2004 and $2,553 million (Airplanes Limited: $2,323 million; Airplanes Trust:
$230 million) at December 31, 2003. Airplanes Group had $591 million class E
notes outstanding at December 31, 2004 and December 31, 2003.

Airplanes Group was due to refinance the subclass A-8 certificates and notes on
March 15, 2003. Given market conditions and the impact these conditions have had
on our performance as compared to the 2001 Base Case, a refinancing at that time
was not economically viable. Step-up interest has therefore accrued on the
subclass A-8 certificates and notes since March 15, 2003. However, due to
insufficient cashflows and the low priority of step-up interest in the priority
of payments, no step-up interest has been paid.

Prior to March 15, 2003, on each payment date the priority of the principal
amounts outstanding in respect of the various subclasses of class A certificates
and notes was subclass A-6, subclass A-9 and subclass A-8 in that order. Because
there was no refinancing of the subclass A-8 notes by March 15, 2003, the
priority of the principal amounts outstanding in respect of the various
subclasses of class A certificates and notes is now subclass A-8 and subclass
A-9 in that order (the subclass A-6 notes having been repaid on October 15,
2004).






                                       35
<PAGE>

Comparison of Actual Cashflows versus the 2001 Base Case for the Three Month
Period from October 9, 2004 to January 18, 2005.

The discussion and analysis which follows is based on the results of Airplanes
Limited and Airplanes Trust and their subsidiaries as a single entity
(collectively "Airplanes Group").

The cashflow information set forth below was not prepared in accordance with
generally accepted accounting principles of the United States. This information
must be read in conjunction with Airplanes Group's most recent financial
information prepared in accordance with generally accepted accounting principles
of the United States. For this you should refer to Airplanes Group's Annual
Report on Form 10-K for the year ended March 31, 2004 and Reports on Form 10-Q
for the quarters ended June 30, 2004 and September 30, 2004 which are filed with
the Securities and Exchange Commission and available from http://www.sec.gov and
"Item 1. Financial Statements (Unaudited)" of this Report on Form 10-Q.

For the purposes of this report, the "Three Month Period" comprises information
from the monthly cash reports as filed at the Securities and Exchange Commission
as Forms 8-K for the relevant months ended November 15, 2004, December 15, 2004
and January 18, 2005. The financial data in these reports includes cash receipts
from October 9, 2004 (first day of the Calculation Period for the November 2004
Report) up to January 11, 2005 (last day of the Calculation Period for the
January 2005 Report). Page [47] presents the cumulative cashflow information
from March 2001 to the January 2005 payment date. This report, however, limits
its commentary to the Three Month Period.

The 2001 Base Case contained assumptions in respect of Airplanes Group's future
cashflows and expenses. Since these assumptions were developed, global economic
conditions, and particularly conditions in the commercial aviation industry,
have worsened significantly, particularly since September 11, 2001, as discussed
above under "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations - Recent Developments". Accordingly the performance of
Airplanes Group has been and we expect it to continue to be worse than the 2001
Base Case, with particular reference to those assumptions relating to aircraft
re-lease rates, aircraft values, aircraft downtime and lessee defaults.

The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments in the Three Month Period and
should be read in conjunction with the analysis on page [46].

Cash Collections

"Total Cash Collections" include Net Lease Rental, Interest Earned, Aircraft
Sales, Net Maintenance and Other Receipts (each as defined below). In the Three
Month Period, Airplanes Group generated approximately $74.5 million in Total
Cash Collections, $22.7 million less than the 2001 Base Case. This difference is
due to a combination of the factors set out below. The numbers in square
brackets below refer to the line item number shown on page [45].






                                       36
<PAGE>

[2]  Renegotiated Leases

     "Renegotiated Leases" is a measure of the loss in rental revenue caused by
     a lessee negotiating a reduction in the lease rental, in the period to the
     original contracted expiry date of the lease prior to the renegotiation of
     the terms of that lease. In the Three Month Period, the amount of revenue
     loss attributed to Renegotiated Leases was $2.2 million, as compared to
     $Nil assumed in the 2001 Base Case. This related to renegotiations with one
     Latin American lessee, one North American lessee, one European lessee and
     one Asian lessee representing 5 aircraft in total on lease to these lessees
     at December 31, 2004.

     For details of current lessee restructurings please refer to "Item 2.
     Management's Discussion and Analysis of Financial Condition and Results of
     Operations - The Lessees".

[3]  Rental Resets - Re-leasing Events Where New Lease Rate Deviated from the
     2001 Base Case

     "Rental Resets" is a measure of the difference in rental revenue when new
     lease rates are different from those assumed in the 2001 Base Case,
     including lease rate adjustments for changes in interest rates on floating
     rate leases and lease rates achieved where revenues are dependent on
     aircraft usage. The loss of rental revenue as a result of Rental Resets
     amounted to $37.5 million in the Three Month Period, as compared to $Nil
     assumed in the 2001 Base Case. This reflects current market conditions
     where an oversupply of aircraft has resulted in lower lease rates upon
     re-leasing or extension of leases than assumed in the 2001 Base Case.

[4]  Lease Rentals - Aircraft Sales

     "Lease Rentals - Aircraft Sales" represents rental revenue foregone in
     respect of aircraft sold prior to their assumed sale date in the 2001 Base
     Case, net of rental revenue received in respect of aircraft remaining on
     lease after their assumed sale date in the 2001 Base Case. In the 2001 Base
     Case, all aircraft are assumed to be sold either at the end of their useful
     economic life or, where an aircraft was subject to a lease with the lease
     expiry date falling after the end of its useful economic life, on the
     contracted lease expiry date. Since March 2001, three MD11 aircraft, two
     MD83 aircraft, three DC9-51 aircraft, one DC9-32 aircraft, six DC8-71F
     aircraft, one DHC8-300C aircraft, two B727-200A aircraft, seven B737-200A
     aircraft, three Metro-III aircraft and one A300B4-200 aircraft have been
     sold prior to their assumed sale date in the 2001 Base Case, resulting in a
     negative variance of $13.9 million in lease rentals compared to the 2001
     Base Case in the Three Month Period. Rental revenue received in respect of
     aircraft remaining on lease after their assumed sale date in the 2001 Base
     Case was $Nil for the Three Month Period.

[5]  Contracted Lease Rentals

     "Contracted Lease Rentals" represents the current contracted lease rental
     rollout which is equal to the 2001 Base Case Lease Rentals less adjustments
     for Renegotiated Leases, Rental Resets and Lease Rentals - Aircraft Sales.
     For the Three Month Period, Contracted Lease Rentals were $48.0 million,
     which was $53.6 million less than assumed in the 2001 Base Case. The
     difference is due to losses from Renegotiated Leases, Rental Resets and
     Lease Rentals - Aircraft Sales as discussed above.


                                       37
<PAGE>


[6]  Movement in Current Arrears Balance

     "Current Arrears" is the total Contracted Lease Rentals outstanding from
     current lessees at a given date but excluding any amounts classified as Bad
     Debts. There was a net decrease of $0.6 million in the Current Arrears
     balance over the Three Month Period, as compared to $Nil assumed in the
     2001 Base Case.

[7]  Net Stress-Related Costs

     "Net Stress-Related Costs" is a combination of all the factors which can
     cause actual lease rentals to vary from the Contracted Lease Rentals. The
     2001 Base Case assumed Net Stress-Related Costs equal to 6.0% of the 2001
     Base Case Lease Rentals in the Three Month Period. Net Stress-Related Costs
     incurred in the Three Month Period amounted to a net cash inflow of $11.6
     million (11.4% of Lease Rentals) compared to $6.1 million outflow assumed
     in the 2001 Base Case, a variance of $17.7 million that is due to the five
     factors described in items [8] to [12] below.

[8]  Bad Debts

     "Bad Debts" are lease rental arrears owed by lessees which have defaulted
     and which are deemed irrecoverable. Bad Debts were $Nil for the Three Month
     Period as compared to the 2001 Base Case assumption of $1.0 million (1.0%
     of Lease Rentals).

[9]  Deferred Arrears Balance

     "Deferred Arrears Balance" refers to current arrears that have been
     capitalized and restructured into a deferred balance. In the Three Month
     Period, Airplanes Group received payments totaling $4.0 million in
     accordance with these restructurings. Payments assumed to be received in
     accordance with restructurings included in the 2001 Base Case were $Nil for
     the Three Month Period.

[10] Aircraft on Ground ("AOG")

     "AOG" is defined as the 2001 Base Case Lease Rentals lost when an aircraft
     is off-lease or deemed non-revenue earning. Airplanes Group had seventeen
     aircraft AOG at various times during the Three Month Period and at December
     31, 2004, fourteen aircraft were AOG. In the Three Month Period, the 2001
     Base Case Lease Rentals loss attributed to AOG was $3.5 million (3.4% of
     Lease Rentals), as compared to $4.3 million (4.2% of Lease Rentals) assumed
     under the 2001 Base Case.

[11] Other Leasing Income

     "Other Leasing Income" consists of miscellaneous income received in
     connection with a lease other than contracted rentals, maintenance receipts
     and security deposits, such as early termination payments or default
     interest. In the Three Month Period, Other Leasing Income amounted to $11.1
     million and included the following:

     -    receipt of $2.0 million from the sale of shares received in settlement
          of a claim following the restructuring of the lease obligations of one
          Canadian lessee in connection with its bankruptcy proceedings.


                                       38
<PAGE>


     -    receipt of $8.6 million in settlement of a claim against one US lessee
          following the early termination of its lease of one B747-200SF
          aircraft as part of Chapter 11 bankruptcy proceedings. The total
          settlement received was $10.2 million, $1.6 million of which was
          allocated to contracted rentals, maintenance and default interest owed
          by the lessee up to the date of settlement of the claim.

     In the 2001 Base Case, Other Leasing Income was assumed to be $Nil in the
     Three Month Period.

[12] Repossession Costs

     "Repossession Costs" cover legal and aircraft technical costs incurred as a
     result of repossessing an aircraft. In the Three Month Period, Repossession
     Costs amounted to $Nil, as compared to $0.8 million (0.8% of Lease Rentals)
     assumed under the 2001 Base Case.

[14] Net Lease Rental

     "Net Lease Rental" is Contracted Lease Rentals less any movement in Current
     Arrears balance and Net Stress-Related Costs. In the Three Month Period,
     Net Lease Rental amounted to $60.2 million, $35.3 million less than that
     assumed in the 2001 Base Case. The variance was attributable to the
     combined effect of the factors outlined in items [2] to [4] and in items
     [6] to [12] above.

[15] Interest Earned

     "Interest Earned" relates to interest received on cash balances held in the
     Collection and Expense Accounts. Cash held in the Collection Account
     consists of the cash liquidity reserve amount ($80 million plus the
     security deposit amount, subject to available cashflows), in addition to
     the intra-month cash balances for all the rentals and maintenance payments
     collected prior to the monthly payment date. The Expense Account contains
     cash set aside to pay for expenses which are expected to be payable over
     the next month. In the Three Month Period, Interest Earned amounted to $0.4
     million, $1.3 million less than that assumed in the 2001 Base Case. The
     difference is due to a lower cash balance in the Collection Account as
     available cashflows were adequate to allocate only $60 million to the cash
     liquidity reserve amount on each payment date in the Three Month Period
     (refer to item 29A below), and a lower average reinvestment rate than
     assumed in the 2001 Base Case. The average actual reinvestment rate for the
     Three Month Period was 2.1% (excluding a $5 million guaranteed investment
     contract) as compared to the 5.2% assumed in the 2001 Base Case.

[16] Aircraft Sales

     Aircraft sales proceeds totalling $3.3 million were received in the Three
     Month Period in respect of the sale of two MD83 aircraft. In the 2001 Base
     Case, aircraft sales proceeds were assumed to be $Nil in the Three Month
     Period. In the 2001 Base Case all aircraft are assumed to be sold either at
     the end of their useful economic life or, where an aircraft was subject to
     a lease with the lease expiry date falling after the end of its useful
     economic life, on the contracted lease expiry date.


                                       39
<PAGE>


[17] Net Maintenance

     "Net Maintenance" refers to maintenance reserve revenue received less any
     maintenance reimbursements paid to lessees. In the Three Month Period,
     positive net maintenance cashflows of $10.6 million were received. The 2001
     Base Case makes no assumptions for Net Maintenance as it assumes that, over
     time, maintenance revenue will equal maintenance expenditure. However, it
     is unlikely that in any particular reporting period, maintenance revenue
     will exactly equal maintenance expenses.

CASH EXPENSES

"Total Cash Expenses" include Aircraft Operating Expenses and Selling, General
and Administrative ("SG&A") Expenses. In the Three Month Period, Total Cash
Expenses were $10.5 million compared to $13.4 million assumed in the 2001 Base
Case, a positive variance of $2.9 million. A number of factors discussed below
have given rise to this.

"Aircraft Operating Expenses" includes all operational costs related to the
leasing of aircraft including costs of insurance, re-leasing and other overhead
costs.

[20] Re-Leasing and Other Overhead Costs

     "Re-Leasing and Other Overhead Costs" consist of miscellaneous re-delivery
     and leasing costs associated with re-leasing events, costs of insurance and
     other lessee-related overhead costs. In the Three Month Period, these costs
     amounted to $3.8 million (or 3.7% of Lease Rentals) compared to $5.1
     million (or 5.0% of Lease Rentals) assumed in the 2001 Base Case. Actual
     Re-Leasing and Other Overhead Costs were lower than the 2001 Base Case
     assumption primarily due to lower than assumed transition costs on aircraft
     delivering to new lessees and lower payments made in the form of lessor
     contributions to defray certain technical costs during the term of certain
     leases.

     "SG&A Expenses" relate to fees paid to the servicer and to other service
     providers.

[21] Aircraft Servicer Fees

     "Aircraft Servicer Fees" are defined as amounts paid to the servicer in
     accordance with the terms of the servicing agreement. In the Three Month
     Period, the total Aircraft Servicer Fees paid were $5.1 million, as
     compared to $5.9 million assumed in the 2001 Base Case.

     Aircraft Servicer Fees consist of:
                                                                           $M
                                                                          ---
     Retainer Fee.......................................................  5.1
     Minimum Incentive Fee .............................................  0.0
     Core Cashflow/Sales Incentive Fee .................................  0.0
                                                                          ---
     Total Aircraft Servicer Fee........................................  5.1
                                                                          ===

     The Retainer Fee is a fixed amount per month per aircraft and changes only
     as aircraft are sold.


                                       40
<PAGE>


[23]   Other Servicer Fees and Other Overheads

       "Other Servicer Fees and Other Overheads" relate to fees and expenses
       paid to other service providers including the administrative agent, the
       cash manager, financial advisers, legal advisers and accountants and to
       the directors/controlling trustees. In the Three Month Period, Other
       Servicer Fees and Other Overheads amounted to $1.6 million, $0.8 million
       lower than an assumed expense of $2.4 million in the 2001 Base Case.

[29A]  Shortfall in Liquidity Reserve

       Airplanes Group is required to maintain a cash balance in the collection
       account under the indentures, subject to available cashflows, in an
       amount equal to the sum of:

       -      the maintenance reserve amount ($80 million); and

       -      a security deposit reserve amount.

       Under the priority of payments applicable to Airplanes Group, this cash
       balance is retained at point (iii) "First Collection Account Top-up"
       (maintenance reserve amount - $60 million) and at point (x) "Second
       Collection Account Top-up" (maintenance reserve amount - $20 million plus
       security deposit reserve amount).

       "Shortfall in Liquidity Reserve" relates to any shortfall in the funds
       allocated to the "First Collection Account Top-up" and "Second Collection
       Account Top-up" as a result of Airplanes Group not having sufficient
       balance of funds after payment of expenses and all required payments on
       the notes which rank prior to the applicable liquidity reserve amount
       under the priority of payments applicable to Airplanes Group. Since the
       May 2003 payment date there has been a depletion of the "Second
       Collection Account Top-up" and beginning on the December 15, 2003 payment
       date cashflows have been insufficient to allocate any funds to the
       "Second Collection Account Top-up". On the January 18, 2005 payment date,
       there was a shortfall in the liquidity reserve amount of $43.4 million as
       compared to a shortfall of $43.5 million on the October 15, 2004 payment
       date, representing an overall decrease of $0.1 million in the Shortfall
       in Liquidity Reserve for the Three Month Period. This decrease in the
       Shortfall in Liquidity Reserve is explained by a net reduction of $0.1
       million in the security deposit reserve amount in the Three Month Period.
       Under the 2001 Base Case, a Shortfall in Liquidity Reserve was not
       anticipated.

[30]   Interest Payments

       In the Three Month Period, interest payments to the holders of the class
       A, B, C and D notes amounted to $9.7 million which is $30.1 million lower
       than assumed under the 2001 Base Case.

       Interest payments on the floating rate class A notes amounted to $9.7
       million, $9.1 million lower than assumed under the 2001 Base Case,
       reflecting a lower than expected level of average interest rates on the
       floating rate notes, the impact of which was partly offset by a higher
       principal balance outstanding on these notes than assumed in the 2001
       Base Case. The 2001 Base Case assumed LIBOR to be 5.2% whereas the
       average monthly LIBOR rate in the Three Month Period was 2.2%. Our
       cashflows have been inadequate to pay any interest on the class B, C and
       D notes in the Three Month Period. Interest payments assumed under the
       2001


                                       41
<PAGE>


       Base Case in the Three Month Period amounted to $3.2 million, $7.1
       million and $10.7 million respectively on the class B, C and D notes.
       Interest has begun to accrue on the unpaid interest on the class B, C and
       D notes in accordance with the terms of these notes and will continue to
       accrue until the arrears of interest are paid in full. Accrued and unpaid
       interest (including interest accrued on unpaid interest) amounted to $6.0
       million, $34.8 million and $53.2 million respectively on the class B, C
       and D notes following the January 18, 2005 payment date.

       In the Three Month Period, there was a continued suspension of payments
       of the class E minimum interest amount of 1% (refer to item 33 below). No
       payments of class E minimum interest were anticipated in the 2001 Base
       Case.

       Airplanes Group's $700 million subclass A-8 notes had an expected final
       payment date of March 15, 2003. Given current market conditions and the
       impact these conditions have had on our performance, we believed that
       such a refinancing at that time was not economically viable and therefore
       it did not proceed as scheduled. In accordance with the terms of the
       subclass A-8 notes, step-up interest of 0.5% per annum began to accrue on
       these notes from March 17, 2003 (the first business day following the
       expected final payment date) and will continue to accrue until they are
       repaid in full or refinanced. Under the priority of payments applicable
       to Airplanes Group, step-up interest is payable after payment of
       expenses, interest, minimum principal and scheduled principal on class A,
       B, C and D notes and any aircraft modification payments. To the extent
       that step-up interest is not paid, it will accrue in accordance with the
       terms of the subclass A-8 notes. Available cashflows have not been
       sufficient to allow payment of step-up interest on any of the payment
       dates since March 2003 and this is expected to continue to be the case.
       Total step-up interest (including interest accrued on unpaid step-up
       interest) accrued and unpaid on the subclass A-8 notes at January 18,
       2005 was $6.6 million.

[31]   Swap and Swaption Cashflows

       Airplanes Group's net swap payments during the Three Month Period were
       $6.4 million compared to $Nil assumed in the 2001 Base Case.

[33]   Principal Payments

       In the forty-six month period from March 10, 2001 to January 18, 2005,
       total principal payments amounted to $568.9 million (comprising $517.4
       million on the class A notes and $51.5 million on the class B notes),
       $126.0 million less than assumed in the 2001 Base Case. The breakdown of
       the $126.0 million variance is set out on page [47]. In the Three Month
       Period, total principal payments amounted to $49.8 million, (comprising
       $49.8 million on the class A notes), $5.8 million greater than assumed in
       the 2001 Base Case. The breakdown of the $5.8 million variance is set out
       on page [46].

       Applying the declining value assumptions in the 1996 Base Case to the
       original March 1996 fleet appraisals and adjusting for aircraft sales,
       the total appraised value of the aircraft was assumed to be $2,391.1
       million at January 18, 2005. Our portfolio is appraised annually and the
       most recent appraisal prior to the January 18, 2005 payment date was
       obtained on January 31, 2004 and valued the current portfolio at $1,849.3
       million. Applying the declining value assumptions to this appraisal, the
       total appraised value was $1,710.8 million at January 18, 2005.


                                       42
<PAGE>


       As a consequence of the cumulative excess decline in appraised values
       experienced since March 1996, combined with overall cash performance in
       that period, we have been required to pay class A principal adjustment
       amount to the extent of available cashflows throughout the forty-six
       month period since the 2001 refinancing. However, we have not always had
       sufficient cashflows to pay class A principal adjustment amount in full
       and since the April 15, 2003 payment date, we have not had sufficient
       cashflows to pay any class A principal adjustment amount. Class A
       principal adjustment amount is intended to accelerate the principal
       amortization schedule of the class A notes when the appraised value of
       the aircraft declines at a greater rate than the decline in appraised
       values assumed in the 1996 Base Case by reference to certain loan to
       current appraised value ratios. Since the class A principal adjustment
       amount ranks ahead of the scheduled principal payments on the class C and
       D notes, and since available cashflows were not sufficient to pay all of
       the class A principal adjustment amount, scheduled principal payments on
       the class C and D notes have been deferred on each payment date during
       the forty-six month period since the 2001 refinancing. Total deferrals of
       class C and class D scheduled principal amounts amounted to $99.2 million
       and $65.9 million respectively as of January 18, 2005.

       Based on the most recent annual appraisal dated January 31, 2005, the
       decline in appraised values in the year to the February 2005 payment date
       was approximately $42.3 million more than the decline assumed in the 1996
       Base Case. The decline in appraised values in this period will result in
       an increase in the arrears of class A principal adjustment amount at the
       February 15, 2005 payment date of $41.0 million.

       To the extent that we have sufficient available funds, we are required to
       pay a minimum principal amount on the class A and B notes in order to
       maintain certain loan to initial appraised value ratios. (Since class A
       minimum principal amount is determined by reference to initial appraised
       values, it is unaffected by the annual appraisals referred to above). As
       a result of earlier payments of class A principal adjustment amounts,
       described above, we remained ahead of the required class A minimum
       principal payment schedule. However, as described above, we have not
       always had sufficient cashflows to pay class A principal adjustment
       amounts in full and since the April 15, 2003 payment date, we have not
       had sufficient cashflows to pay any class A principal adjustment amount.
       As a result, since the August 15, 2003 payment date we have no longer
       been ahead of the required class A minimum principal payment schedule.
       Therefore we had to recommence payments of minimum principal on the class
       A notes to the extent of available cashflows on that date. Our cashflows
       were insufficient to pay minimum principal on the class A notes in full
       beginning on the December 15, 2003 payment date and minimum principal
       arrears on the class A notes were $119.5 million following the January
       18, 2005 payment date. Since minimum principal on the class A notes ranks
       ahead of interest and minimum principal on the class B notes and interest
       on the class C and D notes in the priority of payments, our cashflows
       have been inadequate to pay any interest or minimum principal on the
       class B notes or any interest on the class C and D notes, beginning on
       the December 15, 2003 payment date. Minimum principal arrears on the
       class B notes were $44.4 million following the January 18, 2005 payment
       date.

       The appraised values are based upon the value of the aircraft at normal
       utilization rates in an open, unrestricted and stable market, and take
       into account long-term trends, including current expectations of
       particular models becoming obsolete more quickly, as a result of airlines
       switching to different models, manufacturers ceasing production or lease
       values for aircraft declining more rapidly than previous predictions. As
       a theoretical value, the appraised value is not indicative of market
       value and thus there is no guarantee that we would obtain the

                                       43
<PAGE>


       appraised value upon sale of any aircraft. The current market value of
       each of our aircraft is less than, and in some cases significantly less
       than the appraised value. If the current oversupply of aircraft continues
       longer term, given the age of our fleet, certain of our aircraft may
       become obsolete significantly earlier than the useful life expectancy
       assumed in the 2001 Base Case assumptions, which would negatively impact
       appraised values further. However, since we are no longer able to pay
       class A principal adjustment amount and since, as a result of our consent
       solicitation, we are no longer required to sell our aircraft at or above
       the note target price, the appraised values of our aircraft are now of
       little significance except as a basis for providing statistical
       information on the portfolio and for complying with certain technical
       provisions in the indentures.

       OTHER ISSUES

       For a discussion of our current expectations as to our future ability to
       make payments on our notes and certificates in light of our weaker than
       expected performance as well as a discussion of rating actions on the
       certificates, see "Recent Developments" above.


                                       44
<PAGE>


<TABLE>
<S>                       <C>                              <C>
Note                      Report Line Name                 Description
----                      ----------------                 -----------

                          CASH COLLECTIONS
[1]                       Lease Rentals..................  Assumptions as per the 2001 Base Case
[2]                       - Renegotiated Leases..........  Change in contracted rental cash flow caused by a renegotiated
                                                           lease
[3]                       - Rental Resets................  Re-leasing events where new lease rate deviated from the 2001
                                                           Base Case
[4]                       - Lease Rentals - Aircraft       Revenue foregone on aircraft sold prior to their assumed sale
                          Sales..........................  date in the 2001 Base Case net of revenue received on aircraft
                                                           remaining on lease after their assumed sale date in the 2001
                                                           Base Case
[5] E [1]...[4]             Contracted Lease Rentals.....  Current Contracted Lease Rentals due as at the latest
                                                           Calculation Date
[6]                       Movement in Current Arrears      Current Contracted Lease Rentals not received as at the latest
                          Balance........................  Calculation Date, excluding Bad Debts
[7]                       Less Net Stress Related Costs..
[8]                       - Bad Debts....................  Arrears owed by former lessees and deemed irrecoverable
[9]                       - Deferred Arrears Balance.....  Current arrears that have been capitalized and restructured as a
                                                           Note Payable
[10]                      - AOG..........................  Loss of rental due to an aircraft being off-lease and
                                                           non-revenue earning
[11]                      - Other Leasing Income.........  Includes lease termination/restructuring payments, rental
                                                           guarantees and late payments charges
[12]                      - Repossession.................  Legal and technical costs incurred in repossessing aircraft.
[13]  E [8]...[12]
                                                           Sub-total
[14] [5]+[6]+[13]         Net Lease Rental...............  Contracted Lease Rentals less Movement in Current Arrears
                                                           Balance and Net Stress Related Costs
[15]                      Interest Earned................  Interest earned on monthly cash balances
[16]                      Aircraft Sales.................  Proceeds, net of fees and expenses, from the sale of aircraft.
[17]                      Net Maintenance................  Maintenance Revenue Reserve received less reimbursements to
                                                           lessees
[18]                      Other Receipts.................  Receipts from GE Capital under the Tax Sharing Agreement
[19] E [14]...[18]          Total Cash Collections.......  Net Lease Rental + Interest Earned + Aircraft Sales + Net
                                                           Maintenance + Other Receipts

                          CASH EXPENSES
                          Aircraft Operating Expenses....  All operational costs related to the leasing of aircraft.
[20]                      Releasing and Other
                          Overheads......................  Costs associated with transferring an aircraft from one
                                                           lessee to another, costs of insurance and other
                                                           lessee-related overheads
                          SG&A Expenses
[21]                      Aircraft Servicer Fees.........  Monthly and annual fees paid to servicer
                          - Retainer Fee.................  Fixed amount per month per aircraft
                          - Minimum Incentive Fee........  Minimum annual fee paid to servicer for performance above an
                                                           annually agreed target.
                          - Core Cashflow/Sales Incentive  Fees (in excess of Minimum Incentive Fee above) paid to servicer for
                          Fee                              performance above an annually agreed target/on sale of an aircraft.
[22] [21]                 Sub-total
[23]                      Other Servicer Fees and Other    Administrative Agent, trustee and professional fees paid to
                          Overheads......................  other service providers and other overheads
[23A]                     Other SG&A Expenses............  Costs relating to the assumed refinancing of the subclass A-8
                                                           notes in March 2003, as assumed under the 2001 Base Case and
                                                           costs relating to the 2003 consent solicitation for
                                                           Indenture amendment
[24] [22]+[23]+[23A]      Sub-total
[25]  [20]+[24]           Total Cash Expenses............  Aircraft Operating Expenses + SG&A Expenses

                          NET CASH COLLECTIONS
[26]  [19]                Total Cash Collections.........  Line 19 above
[27]  [25]                Total Cash Expenses............  Line 25 above
[28]                      Movement in Expense Account....  Relates to reduction in accrued expense amounts
[29]                      Reduction in Liquidity Reserve.  Reduction of the miscellaneous reserve amount from $40m to $Nil
                                                           in April 2001
[29A]                     Shortfall in Liquidity Reserve.  Shortfall in the balance of funds on deposit in the collection
                                                           account below the liquidity reserve amount
[30]                      Interest Payments..............  Interest paid on all outstanding debt
[31]                      Swap payments..................  Net swap payments (paid)/received
[32] E [26]...[31]        Total

[33]                      Principal payments.............  Principal payments on debt
</TABLE>


                                       45
<PAGE>


  Airplanes Group Cashflow Performance for the Period from October 9, 2004 to
       January 18, 2005 (3 Months) Comparison of Actual Cashflows versus
                            2001 Base Case Cashflows

<TABLE>
                                                                                      % of Lease Rentals under
                                                                                         the 2001 Base Case
                                                                2001                            2001
                                                                ----                            ----
                                                    Actual   Base Case  Variance     Actual   Base Case  Variance
                                                    ------   ---------  --------     ------   ---------  --------
                CASH COLLECTIONS                          ($ Millions)

<S>             <C>                                  <C>       <C>          <C>      <C>         <C>        <C>
1               Lease Rentals                        101.6     101.6        0.0      100.0%      100.0%     0.0%
2               - Renegotiated Leases                 (2.2)      0.0       (2.2)      (2.2%)       0.0%    (2.2%)
3               - Rental Resets                      (37.5)      0.0      (37.5)     (36.9%)       0.0%   (36.9%)
4               - Lease Rentals - Aircraft Sales      13.9)      0.0      (13.9)     (13.7%)       0.0%   (13.7%)
                                                      -----      ---      ------      -------      ----   -------

5   E 1 - 4     Contracted Lease Rentals              48.0     101.6      (53.6)      47.2%      100.0%   (52.8%)
6               Movement in Current Arrears            0.6       0.0        0.6        0.6%        0.0%     0.6%
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                            0.0      (1.0)       1.0        0.0%       (1.0%)    1.0%
                - Deferred Arrears Balance             4.0       0.0        4.0        3.9%        0.0%     3.9%
10              - AOG                                 (3.5)     (4.3)       0.8       (3.4%)      (4.2%)    0.8%
11              - Other Leasing Income                11.1       0.0       11.1       10.9%        0.0%    10.9%
12              - Repossession                         0.0      (0.8)       0.8        0.0%       (0.8%)    0.8%
                                                       ---      -----       ---        ----       ------    ----
13    E 8 - 12  Sub-total                             11.6      (6.1)      17.7       11.4%       (6.0%)   17.4%
14    5+6+13    Net Lease Rental                      60.2      95.5      (35.3)      59.3%       94.0%   (34.7%)
15              Interest Earned                        0.4       1.7       (1.3)       0.4%        1.7%    (1.3%)
16              Aircraft Sales                         3.3       0.0        3.3        3.2%        0.0%     3.2%
17              Net Maintenance                       10.6       0.0       10.6       10.4%        0.0%    10.4%
18              Other Receipts                         0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                     -----     -----     ------      ------      ------  -------
19    E 14 - 18 Total Cash Collections                74.5      97.2      (22.7)      73.3%       95.7%   (22.3%)
                                                      ====      ====      ======      =====       =====   =======

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads      (3.8)     (5.1)       1.3       (3.7%)      (5.0%)    1.3%

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                        (5.1)     (5.5)       0.4       (5.0%)      (5.4%)    0.4%
                - Minimum Incentive Fee                0.0      (0.4)       0.4        0.0%       (0.4%)    0.4%
                - Core Cashflow/Sales Incentive Fee    0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                       ---       ---        ---        ----        ----     ----
22       21     Sub-total                             (5.1)     (5.9)       0.8       (5.0%)      (5.8%)    0.8%
23              Other Servicer Fees and Other         (1.6)     (2.4)       0.8       (1.6%)      (2.4%)    0.8%
                Overheads
23A             Other SG&A Expenses                    0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                     -----     -----        ---        ----        ----     ----
24   22+23+23A  Sub-total                             (6.7)     (8.3)       1.6       (6.6%)      (8.2%)    1.6%
                                                      -----    ------       ---       ------      ------    ----
25    24+20     Total Cash Expenses                  (10.5)    (13.4)       2.9      (10.3%)     (13.2%)    2.9%
                                                     ======    ======     =====      =======     =======    ====

                NET CASH COLLECTIONS
26       19     Total Cash Collections                74.5      97.2      (22.7)      73.3%       95.7%   (22.3%)
27       25     Total Cash Expenses                  (10.5)    (13.4)       2.9      (10.3%)     (13.2%)    2.9%
28              Movement in Expense Account            2.0       0.0        2.0        2.0%        0.0%     2.0%
29              Reduction in Liquidity Reserve         0.0       0.0        0.0        0.0%        0.0%     0.0%
29A             Shortfall in Liquidity Reserve        (0.1)      0.0       (0.1)      (0.1%)       0.0%    (0.1%)
30              Interest Payments                     (9.7)    (39.8)      30.1       (9.5%)     (39.2%)   29.6%
31              Swap Payments                         (6.4)      0.0       (6.4)      (6.3%)       0.0%    (6.3%)
                                                      -----      ---       -----      ------       ----    ------
32    E 26 - 31 TOTAL                                 49.8      44.0        5.8       49.0%       43.3%     5.7%
                                                      ====      ====        ===       =====       =====     ====

33              PRINCIPAL PAYMENTS
                Class A                               49.8      38.6       11.2       49.0%       38.0%    11.0%
                Class B                                0.0       5.4       (5.4)       0.0%        5.3%    (5.3%)
                                                       ---       ---       -----       ----        ----    ------
                Total                                 49.8      44.0        5.8       49.0%       43.3%     5.7%
                                                      ====      ====        ===       =====       =====     ====

                Debt Balances at January 18, 2005
                Subclass A-6                           0.0       0.0
                Subclass A-8                         628.0     700.0
                Subclass A-9                         750.0     575.0
                Class B                              226.8     203.8
                Class C                              349.8     349.8
                Class D                              395.1     395.1
                                                     -----     -----
                                                   2,349.7   2,223.7
                                                   =======   =======

</TABLE>


                                       46
<PAGE>


Airplanes Group Cashflow Performance for the Period from March 10, 2001 to
January 18, 2005 (46 Months)

<TABLE>
                       Comparison of Actual Cashflows versus 2001 Base Case Cashflows
                                                                                   % of Lease Rentals under
                                                                                      the 2001 Base Case
                                                                2001                         2001
                                                                ----                         ----
                                                    Actual   Base Case   Variance  Actual  Base Case  Variance
                                                    ------   ---------   --------  ------  ---------  --------
                CASH COLLECTIONS                           ($ Millions)
<S>                                                <C>         <C>       <C>       <C>       <C>      <C>
1               Lease Rentals                      1,598.8     1,598.8       0.0   100.0%    100.0%      0.0%
2               - Renegotiated Leases                (84.2)        0.0     (84.2)   (5.3%)     0.0%     (5.3%)
3               - Rental Resets                     (326.9)        0.0    (326.9)  (20.4%)     0.0%    (20.4%)
4               - Lease Rentals - Aircraft Sales     (36.7)        0.0     (36.7)   (2.3%)     0.0%     (2.3%)
                                                   -------     -------    ------   ------    ------      ----

5   E  1 - 4    Contracted Lease Rentals           1,151.0     1,598.8    (447.8)   72.0%    100.0%    (28.0%)
6               Movement in Current Arrears           (3.6)        0.0      (3.6)   (0.2%)     0.0%     (0.2%)
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                          (10.2)      (16.0)      5.8    (0.6%)    (1.0%)     0.4%
9               - Deferred Arrears Balance            21.4         3.1      18.3     1.3%      0.2%      1.1%
10              - AOG                               (125.0)      (67.3)    (57.7)   (7.8%)    (4.2%)    (3.6%)
11              - Other Leasing Income                24.7         0.0      24.7     1.5%      0.0%      1.5%
12              - Repossession                        (4.1)      (12.8)      8.7    (0.3%)    (0.8%)     0.5%
                                                   -------     -------    ------   ------    ------      ----
13    E 8 - 12  Sub-total                            (93.2)      (93.0)     (0.2)   (5.8%)    (5.8%)    (0.0%)
14    5+6+13    Net Lease Rental                   1,054.2     1,505.8    (451.6)   65.9%     94.2%    (28.2%)
15              Interest Earned                       10.3        26.5     (16.2)    0.6%      1.7%     (1.0%)
16              Aircraft Sales                        88.7        43.6      45.1     5.5%      2.7%      2.8%
17              Net Maintenance                       94.6         0.0      94.6     5.9%      0.0%      5.9%
18              Other Receipts                        13.8         0.0      13.8     0.9%      0.0%      0.9%
                                                   -------     -------    ------   ------    ------      ----
19   E 14 - 18  Total Cash Collections             1,261.6     1,575.9    (314.3)   78.9%     98.6%    (19.7%)
                                                   =======     =======    =======   =====     =====    =======

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads     (90.2)      (80.1)    (10.1)   (5.6%)    (5.0%)    (0.6%)

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                       (85.4)      (85.2)     (0.2)   (5.3%)    (5.3%)    (0.0%)
                - Minimum Incentive Fee               (6.0)       (5.8)     (0.2)   (0.4%)    (0.4%)    (0.0%)
                - Core Cashflow/Sales Incentive Fee   (0.2)        0.0      (0.2)    0.0%      0.0%     (0.0%)
                                                    -------        ---      -----    ----      ----     ------
22       21     Sub-total                            (91.6)      (91.0)     (0.6)   (5.7%)    (5.7%)    (0.0%)
23              Other Servicer Fees and Other        (40.8)      (38.4)     (2.4)   (2.6%)    (2.4%)    (0.2%)
                Overheads
23A             Other SG&A Expenses                   (2.0)       (4.7)      2.7    (0.1%)    (0.3%)     0.2%
                                                   -------     -------    ------   ------    ------      ----
24  22+23+23A   Sub-total                           (134.4)     (134.1)     (0.3)   (8.4%)    (8.4%)    (0.0%)
                                                    -------     -------     -----   ------    ------    ------

25     24+20    Total Cash Expenses                 (224.6)     (214.2)    (10.4)  (14.0%)   (13.4%)    (0.7%)
                                                    =======     =======    ======  =======   =======    ======

                NET CASH COLLECTIONS
26       19     Total Cash Collections             1,261.6     1,575.9    (314.3)   78.9%     98.6%    (19.7%)
27       25     Total Cash Expenses                 (224.6)     (214.2)    (10.4)  (14.0%)   (13.4%)    (0.7%)
28              Movement in Expense Account           (5.5)        0.0      (5.5)   (0.3%)     0.0%     (0.3%)
29              Reduction in Liquidity Reserve        40.0        40.0       0.0     2.5%      2.5%      0.0%
29A             Shortfall in Liquidity Reserve        43.4         0.0      43.4     2.7%      0.0%      2.7%
30              Interest Payments                   (368.3)     (678.6)    310.3   (23.0%)   (42.4%)    19.4%
31              Swap Payments                       (177.7)      (28.2)   (149.5)  (11.1%)    (1.8%)    (9.4%)
                                                    -------      ------   -------  -------    ------    ------
32   E 26 - 31  TOTAL                                568.9       694.9    (126.0)   35.6%     43.5%     (7.9%)
                                                  ========     =======    =======  ======     =====     ======

33              PRINCIPAL PAYMENTS
                Class A                              517.4       620.4    (103.0)   32.4%     38.8%     (6.4%)
                Class B                               51.5        74.5     (23.0)    3.2%      4.7%     (1.4%)
                                                    ------      ------   --------  ------   -------     ------
                Total                                568.9       694.9    (126.0)   35.6%     43.5%     (7.9%)
                                                     =====       =====    =======   =====     =====     ======

                Debt Balances at January 18, 2005
                Subclass A-6                           0.0         0.0       0.0
                Subclass A-8                         628.0       700.0     (72.0)
                Subclass A-9                         750.0       575.0     175.0
                Class B                              226.8       203.8      23.0
                Class C                              349.8       349.8       0.0
                Class D                              395.1       395.1       0.0
                                                  --------    --------  --------
                                                   2,349.7     2,223.7     126.0
                                                   =======     =======     =====
</TABLE>


                                       47
<PAGE>


<TABLE>
                                                      Mar-01                               2001
                                                      ------                               ----
                                                     Closing            Actual         Base Case
                                                     -------            ------         ---------
                                                ($ Millions)        ($ Millions)     ($ Millions)

<S>                                             <C>                 <C>              <C>
      Net Cash Collections                                               568.9             694.9

      Add Back Interest and Swap Payments                                546.0             706.8
                                                                         -----             -----

  a   Net Cash Collections                                             1,114.9           1,401.7
                                                                       =======           =======
      (excl. interest and swap payments)
  b   Swaps                                                              177.7              28.2
  c   Class A Interest                                                   157.2             348.1
  d   Class A Minimum                                                    262.5               0.0
  e   Class B Interest                                                    20.5              56.5
  f   Class B Minimum                                                     51.5              74.5
  g   Class C Interest                                                    76.0             109.3
  h   Class D Interest                                                   114.6             164.7
  i   Class A Principal Adjustment                                       254.9             620.4
  i   Class C Scheduled                                                    0.0               0.0
  k   Class D Scheduled                                                    0.0               0.0
  l   Permitted Aircraft Modifications                                     0.0               0.0
  m   Step-up Interest                                                     0.0               0.0
  n   Class E Minimum Interest                                             0.0               0.0
  o   Class B Supplemental                                                 0.0               0.0
  p   Class A Supplemental                                                 0.0               0.0
                                                                       -------             -----
      Total                                                            1,114.9           1,401.7
                                                                       =======           =======

 [1]  Interest Coverage Ratio
      Class A                                                              3.3               3.7  = a/(b+c)
      Class B                                                              N/A               3.2  = a/(b+c+d+e)
      Class C                                                              N/A               2.3  = a/(b+c+d+e+f+g)
      Class D                                                              N/A               1.8  = a/(b+c+d+e+f+g+h)

 [2]  Debt Coverage Ratio
      Class A                                                              N/A               3.7  = a/(b+c+d)
      Class B                                                              N/A               2.8  = a/(b+c+d+e+f)
      Class C                                                              N/A               N/A  = a/(b+c+d+e+f+g+h+i+j)
      Class D                                                              N/A               N/A  = a/(b+c+d+e+f+g+h+i+j+k)

      Loan to Value Ratios (in U.S. dollars)
 [3]  Adjusted Portfolio Value                       3,108.6           1,710.8           2,373.7
      Liquidity Reserve Amount of
      which
      - Cash                                           156.9              60.0             116.0
      - Accrued Expenses                                12.6              10.0               0.0
                                                     -------           -------            ------
      Subtotal                                         169.5              70.0             116.0
      Less Lessee Security Deposits                     36.9               0.0              36.0
                                                     -------           -------            ------
      Subtotal                                         132.6              70.0              80.0
                                                     -------           -------            ------
 [4]  Total Asset Value                              3,241.2           1,780.8           2,453.7
                                                     =======           =======           =======


Note Balances as at:                                March 15, 2001  January 18, 2005   January 18, 2005
                                                    --------------  ----------------   ----------------


      Class A                                        1,895.4  58.5%   1,378.0   77.4%  1,275.0  52.0%
      Class B                                          278.3  67.1%     226.8   90.1%    203.8  60.3%
      Class C                                          349.8  77.9%     349.8  109.8%    349.8  74.5%
      Class D                                          395.1  90.0%     395.1  131.9%    395.1  90.6%
                                                     -------           ------           ------
                                                     2,918.6          2,349.7          2,223.7
                                                     =======          =======          =======
</TABLE>


                                       48
<PAGE>


[1]    "Interest Coverage Ratio" is equal to Net Cash Collections (excluding
       interest and swap payments) expressed as a ratio of the interest payments
       payable on each subclass of notes plus the interest and minimum principal
       payments payable on each subclass of notes that rank senior in priority
       of payment to the relevant subclass of notes. Actual Interest Coverage
       Ratios have not been provided for the class B, C and D notes as interest
       amounts have not been paid on these notes since the December 2003 payment
       date.

[2]    "Debt Coverage Ratio" is equal to Net Cash Collections (excluding
       interest and swap payments) expressed as a ratio of the interest and
       minimum/scheduled principal payments payable on each subclass of notes
       plus the interest and minimum/scheduled principal payments payable on
       each subclass of notes that ranks equally with or senior to the relevant
       subclass of notes in the priority of payments. In respect of the class A
       notes, principal adjustment amount payments have been excluded as they
       are a function of aircraft values. Actual Debt Coverage Ratios have not
       been provided for the class A, B, C and D notes as minimum principal
       amounts on the class A and B notes have not been paid in full and no
       scheduled principal amounts have been paid on the class C and D notes in
       the period since March 2001. 2001 Base Case Debt Coverage Ratios have not
       been provided for the class C and D notes as no principal payments were
       assumed.

[3]    "Adjusted Portfolio Value" represents the base value of each aircraft in
       the portfolio as determined by the most recent appraisal multiplied by
       the depreciation factor at payment date divided by the depreciation
       factor as of the relevant appraisal date.

[4]    "Total Asset Value" is equal to total Adjusted Portfolio Value plus
       liquidity reserve amount minus lessee security deposits.


                                       49
<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risks

Interest Rate Sensitivity

Airplanes Group's principal market risk exposure is to changes in interest
rates. This exposure arises from its notes and the derivative instruments used
by Airplanes Group to manage its interest rate risk.

The terms of each subclass or class of notes, including the outstanding
principal amount as of December 31, 2004 and estimated fair value as of December
31, 2004, are as follows:

<TABLE>
                                                                                                Estimated Fair
                               Annual Interest     Principal Amount                               Value at
                                    Rate           at December 31,               Final          December 31,
                                                   ----------------                             ------------
    Class of Notes*           (Payable Monthly)          2004                Maturity Date          2004**
    ---------------           -----------------          ----                -------------          ----
                                                       $ Million                                  $ Million
<S>                         <C>                    <C>                      <C>                 <C>
    Subclass A-8            (LIBOR+.375%)                  652              March 15, 2019            574
    Subclass A-9            (LIBOR+.55%)                   750              March 15, 2019            399
    Class B                 (LIBOR+.75%)                   227              March 15, 2019             34
    Class C                 (8.15%)                        350              March 15, 2019             11
    Class D                 (10.875%)                      395              March 15, 2019              -
                                                        ------                                   --------
                                                         2,374                                      1,018
                                                         =====                                      =====
</TABLE>
---------------------

* The subclass A-6 notes were repaid on October 15, 2004.

** Although the estimated fair values of the class A to D notes outstanding have
been determined by reference to prices as at December 31, 2004 provided by an
independent third party, these fair values do not reflect the market value of
these notes at a specific time and should not be relied upon as a measure of the
value that could be realized by a noteholder upon sale.

Interest Rate Management

The leasing revenues of Airplanes Group are generated primarily from lease
rental receipts which are based on either a fixed or floating rate, or a
combination of the two. In the case of floating rate leases, an element of the
rental varies in line with changes in LIBOR, generally six-month LIBOR. Some
leases carry fixed and floating rental payments for different rental periods.
There has been an increasing tendency for fixed rate leases to be written and
leases representing approximately 98% of our portfolio by appraised value as of
January 31, 2005 are fixed rate leases.

In general, an interest rate exposure arises to the extent that Airplanes
Group's fixed and floating interest obligations in respect of the class A to D
notes do not correlate to the mix of fixed and floating rental receipts for
different rental periods. This interest rate exposure can be managed through the
use of interest rate swaps and other derivative instruments. The class A and B
notes bear floating rates of interest and the class C and class D notes bear
fixed rates of interest. The mix of fixed and floating rental receipts contains
a higher percentage of fixed rate receipts than the percentage of fixed rate
interest payments on the notes and the reset periods on floating receipts
payments are generally longer than the monthly reset periods on the floating
rate notes. Before November 17, 2003 we entered into interest rate swaps in
order to correlate the contracted fixed and floating rental receipts to the
fixed and floating interest payments on the notes. Since November 17, 2003,
however, we have ceased paying interest on our class B, C and D notes.


                                       50
<PAGE>


We have therefore reviewed and modified our hedging policy with the approval of
the rating agencies and no longer enter into hedges of the class B notes and
certificates. We believe it prudent to continue to hedge our interest rate
exposure in respect of the class A notes and certificates as the mix of fixed
and floating rental receipts does not correlate to the floating payments due on
the class A notes and certificates. Our cashflows have been insufficient to
enable any funds to be allocated to the "Second Collection Account Top-up" in
the priority of payments since December 15, 2003. We have therefore not included
this cash balance in our hedging calculations since the end of 2003.

Under the swaps, Airplanes Group pays fixed amounts and receives floating
amounts on a monthly basis. The swaps amortize having regard to a number of
factors, including the expected paydown schedule of the class A notes, the
expiry dates of the leases under which lessees are contracted to make fixed rate
rental payments and the LIBOR reset dates under the floating rate leases. At
least every three months, and in practice more frequently, debis AirFinance
Financial Services (Ireland) Limited, a subsidiary of debis AirFinance Ireland,
as Airplanes Group's administrative agent (the "Administrative Agent"), seeks to
enter into additional swaps or sell at market value or unwind part or all of the
swaps and any future swaps in order to rebalance the floating interest
obligations and the fixed and floating mix of rental receipts.

At December 31, 2004, Airplanes Group had unamortized swaps with an aggregate
notional principal balance of $1,045 million. The aggregate notional principal
balance of these swaps will reduce, by their terms, to an aggregate notional
principal balance of $940 million by March 31, 2005, to an aggregate notional
principal balance of $735 million by March 31, 2006, to an aggregate notional
principal balance of $515 million by March 31, 2007, to an aggregate notional
principal balance of $240 million by March 2008, to an aggregate notional
principal balance of $150 million by March 2009 and to an aggregate notional
principal balance of $50 million by March 2010. None of the swaps has a maturity
date extending beyond April 2010. The aggregate estimated fair market value of
the swaps at December 31, 2004 was ($16.2) million, that is the swaps were
"out-of-the-money", meaning that if the swaps were sold, Airplanes Group would
incur a loss of $16.2 million, as detailed on the next page:


                                       51
<PAGE>


                         Airplanes Group Swap Book at December 31, 2004

<TABLE>
                                                                             Estimated Fair
          Notional                                                           Market Value ($)
Swap     Amount (1)       Effective            Final        Fixed Rate        As at Dec 31,
No.      $'millions          Date          Maturity Date    Payable (2)            2004

<C>          <C>          <C>                <C>              <C>                <C>
1            20           15-May-01          15-Jan-05        4.7950%            (45,138)
2            50           21-Aug-01          15-Feb-05        4.4195%           (172,116)
3            15           15-Oct-04          15-Oct-05        4.5650%           (194,371)
4            15           17-Oct-01          15-Nov-05        3.9475%           (140,538)
5            60           15-Jul-04          15-Dec-05        2.4475%             657,306
6           105           24-Jul-01          15-Dec-05        5.2850%         (1,466,171)
7            30           17-Nov-03          15-Jan-06        5.1150%           (349,013)
8           125           20-Dec-01          15-Feb-06        4.6350%         (1,026,874)
9            10           15-May-03          15-Mar-06        2.8800%               6,698
10           25           30-Jan-02          15-Apr-06        3.5040%           (127,192)
11           60           15-Mar-02          15-Apr-06        4.0125%           (387,349)
12           10           15-Dec-03          18-Apr-06        2.9425%              22,943
13          155           15-Aug-02          15-Jul-06        5.5500%         (3,877,240)
14           0            17-Oct-05          15-Oct-06        4.9400%           (137,995)
15           65           15-Jul-04          15-May-07        5.8620%         (5,413,215)
16           60           15-Mar-04          15-May-07        5.2020%         (1,833,132)
17           60           15-Apr-03          15-May-07        3.5350%           (191,777)
18           90           15-Dec-04          15-Jun-07        4.1300%         (1,505,465)
19           90           17-Mar-03          17-Sep-07        3.8700%           (879,739)
20           0            15-May-07          15-Nov-07        4.8000%           (301,417)
21           0            17-Sep-07          17-Dec-07        4.9440%           (160,130)
22           0            15-Jul-05          15-Apr-08        3.4800%             677,865
23           0            15-Jun-05          15-Oct-09        3.8625%             421,234
24           0            15-Jul-05          15-Nov-09        4.0775%              64,987
25           0            15-Apr-05          15-Apr-10        4.0800%              69,543
        -----------                                                         --------------
          1,045                                                               (16,288,296)
        -----------                                                         --------------
</TABLE>

1)   While some of the above swaps have a fixed notional amount, many amortize
     over the period to the final maturity date.

2)   Under all swaps, Airplanes Group receives floating rate payments at one
     month LIBOR, reset monthly on an actual /360 adjusted basis.

3)   The initial amounts for swaps number 14, 20, 21, 22, 23, 24 and 25 are $10
     million, $95 million, $75 million, $45 million, $50 million, $50 million
     and $50 million respectively.

4)   Airplanes Group has also purchased an interest rate cap with a notional
     amount of $50 million.

Additional interest rate exposure will arise to the extent that lessees owing
fixed rate rental payments default and interest rates have declined between the
contract date of the lease and the date of default. This exposure can be
managed through the purchase of swaptions. If Airplanes Group purchases
swaptions, these, if exercised, will allow Airplanes Group to enter into
interest rate swap transactions under which it would pay floating amounts and
receive fixed amounts. These swaptions could be exercised in the


                                      52
<PAGE>


event of defaults by lessees owing fixed rate rental payments in circumstances
where interest rates had declined since the contract date of such leases.
Following consultation with the rating agencies in the year ended March 31,
2002, it is not currently proposed to purchase any swaptions due primarily to
the low interest rate environment and our current cashflow performance.

If we are required by the rating agencies to purchase swaptions, the premium
would be payable at two points in the priority of payments under the
indentures. Fifty percent of any swaption premium in any month is a "minimum
hedge payment" and would be payable fourth in Airplanes Group's order of
priority of payments (ahead of class A minimum principal amount). The other
fifty percent of the premium is expended as a "supplemental hedge payment" and
would be payable seventeenth in Airplanes Group's order of priority of payments
but given our current cashflow performance it is highly unlikely we would ever
be able to make such payment.

Through the use of swaps, swaptions (when applicable) and other interest rate
hedging products, Airplanes Group seeks to manage its exposure to adverse
changes in interest rates based on regular reviews of its interest rate risk.
There can be no assurance, however, that Airplanes Group's interest rate risk
management strategies will be effective in this regard.

Our indentures required that any counterparty with whom we enter into a swap
have at least a short-term unsecured debt rating of A-1+ from Standard & Poor's
and a long-term unsecured debt rating of A1 from Moody's. It was proving
increasingly difficult to find counterparties meeting these requirements and
therefore, as further described in our most recent Annual Report on Form 10-K,
as filed with the SEC, the board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust resolved to undertake a consent
solicitation in 2003 seeking, among other things, to amend the indentures so as
to reduce the required rating for a swap counterparty to a short-term unsecured
debt rating of at least A-1 from Standard & Poor's and a long-term unsecured
debt rating of at least A2 from Moody's or otherwise as approved by the Board
with the prior agreement of the rating agencies. The consent solicitation was
successful and the indentures accordingly amended in September 2003. However,
because of our financial condition, notwithstanding the changes to the
indentures, the availability of counterparties has become very limited.
Consequently we may not be able to find counterparties willing to enter into
interest rate swaps with us, and/or it may become more expensive for us to
enter into swaps with eligible counterparties. As a result we have concluded
that in such circumstances we may partially hedge the vehicle against a
significant adverse movement in interest rates through the purchase of a
limited amount of out of the money interest rate caps. During the nine month
period ended December 31, 2004 we purchased an interest rate cap with a
notional amount of $50 million.

The directors of Airplanes Limited and the controlling trustees of Airplanes
Trust are responsible for reviewing and approving the overall interest rate
management policy and transaction authority limits. Specific hedging contracts
are approved by officers of the Administrative Agent acting within the overall
policies and limits. Counterparty risk is monitored on an ongoing basis.
Counterparties are subject to the prior approval of the directors of Airplanes
Limited and the controlling trustees of Airplanes Trust. Airplanes Group is
required by the indentures to enter into swaps only with counterparties meeting


                                      53
<PAGE>


certain rating requirements as discussed more fully in our most recent Annual
Report on Form 10-K, as filed with the SEC.

The quantitative disclosure and other statements in this section are
forward-looking statements that involve risks and uncertainties. Although
Airplanes Group's policy is to limit its exposure to changes in interest rates,
it could suffer higher cashflow losses as a result of actual future changes in
interest rates. It should also be noted that Airplanes Group's future exposure
to interest rate movements will change as the composition of its lease
portfolio changes. Please refer to "Risk Factors" in the Airplanes Group Report
on Form 10-K for the year ended March 31, 2004 for more information about
risks, especially lessee credit risk, that could intensify Airplanes Group's
exposure to changes in interest rates.


                                      54
<PAGE>


Item 4. Controls and Procedures

(a)  Evaluation of disclosure controls and procedures

The Chairman of the Board of Directors of Airplanes Limited and of the
Controlling Trustees of Airplanes Trust acting on the recommendation of the
Board of Directors of Airplanes Limited and the Controlling Trustees of
Airplanes Trust, after evaluating the effectiveness of Airplanes Group's
"disclosure controls and procedures" (as defined in Exchange Act Rules
13a-15(e) and 15 (d) - 15(e)) as of the end of the period covered by this
quarterly report, has concluded that as of the end of such period, our
disclosure controls and procedures were effective based on their evaluation of
these controls and procedures required by paragraph (b) of Exchange Act Rules
13a-15 or 15d-15.

Airplanes Group's disclosure controls and procedures are designed to provide
reasonable assurance of achieving their objectives, and the Board of Directors
of Airplanes Limited and the Controlling Trustees of Airplanes Trust have
concluded that these controls and procedures are effective at the "reasonable
assurance" level. However, Airplanes Group believes that a control system, no
matter how well designed or operated, cannot provide absolute assurance that
the objectives of the control system are met, and that no evaluation of
controls can provide absolute assurance that various types of corporate
operational risks within a company, particularly one such as this that relies
exclusively on third parties for all services, will be detected in a timely
manner.

(b)  Changes in internal controls

There were no changes in the internal controls of Airplanes Group over
financial reporting identified in connection with the evaluation required by
paragraph (d) of Exchange Act Rules 13a-15 or 15(d)-15 that occurred during our
last fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.


                                      55
<PAGE>


Part II. Other Information

Item 1. Legal Proceedings

VASP
Following the default by the Brazilian airline VASP under its leases, debis
AirFinance Ireland (formerly known as GPA Group plc) sought and obtained in
November 1992 a preliminary injunction for repossession of 13 aircraft and
three spare engines, and subsequently repossessed these aircraft and engines.
Airplanes Group acquired seven of these aircraft from debis AirFinance Ireland
in March 1996, four of which remain in our portfolio and represented 1.95% of
our portfolio by appraised value as of January 31, 2005. In December 1996, the
Sao Paolo Court of Justice, Brazil, found in favor of VASP on appeal and
granted it the right to the return of the aircraft and engines or the right to
seek damages against debis AirFinance Ireland. debis AirFinance Ireland
challenged this decision and in January 2000, the Court of Justice granted a
stay of the 1996 judgment while it considered debis AirFinance Ireland's
rescission action. In April 2002, the Court of Justice found in favor of debis
AirFinance Ireland's rescission action and overturned the 1996 judgment in
favor of VASP. VASP has actively pursued appeals to this decision and in June
2004, the Superior Court of Justice found in favour of VASP, granting VASP's
special appeal with the consequent dismissal of debis AirFinance Ireland's
rescission action. debis AirFinance Ireland has indicated that it will continue
to actively pursue all available courses of action, including appeals and if
necessary initiating a new rescission action. A risk of repossession by VASP
would only arise if VASP were successful on appeal in seeking repossession of
the aircraft and the aircraft were located in Brazil. Brazilian counsel to
debis AirFinance Ireland believe that VASP may not commence a repossession
action as VASP has indicated that it may instead file a motion for damages
suffered as a result of the repossession of the aircraft. We cannot at this
point quantify the amount of this potential damages claim. Although none of our
lessees which lease any of the relevant aircraft is based in Brazil, some of
them may operate those aircraft into Brazil from time to time.

Other Matters

Two subsidiaries of Airplanes Trust, AeroUSA Inc. and AeroUSA 3 have in the
past filed U.S. federal consolidated tax returns and certain state and local
tax returns with debis AirFinance, Inc. (then known as AerFi, Inc.) and its
subsidiaries. There are no ongoing tax audits by state and local tax
authorities with respect to tax returns previously reported by debis
AirFinance, Inc. and its subsidiaries.

Since November 20, 1998, AeroUSA, Inc. and AeroUSA 3, Inc. have filed
consolidated United States federal tax returns and certain state and local tax
returns with General Electric Capital Corporation ("GE"), such returns being
filed on a calendar basis. In addition, on November 20, 1998, Airplanes Trust
entered into a tax sharing agreement with GE.


                                      56
<PAGE>


Item 2. Changes in Securities and Use of Proceeds

Not Applicable

Item 3. Defaults Upon Senior Securities

As discussed more fully in "Part 1 Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations", we have had insufficient
cashflows to be able to make any payment of interest on the class B, C and D
notes since the December 15, 2003 payment date.

In general, the rights and remedies with respect to a note event of default are
exercisable only by the trustee of and the holders of the most senior class of
notes outstanding, and then only to the extent that there is an event of
default with respect to that senior class of notes. For example, a failure to
make a required payment on a class of notes is a default only with respect to
that class of notes and the corresponding certificates. Accordingly, if, as
occurred on December 15, 2003 when we were unable to pay interest on the class
B, C and D notes, an event of default occurs with respect to a class of notes
which is not the most senior class outstanding, the holders of that class of
notes (and thus, the corresponding certificates) will not be permitted to
enforce their rights until all amounts owing under any more senior class of
notes outstanding and certain other amounts have been paid in full. The class A
notes are the most senior class of notes currently outstanding.

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

Not Applicable

Item 6. Exhibits and Reports on Form 8-K

The following exhibits are included herein:

31    Certification of Chairman pursuant to Rule 13a-14(a).

32    Section 1350 Certification

Reports on Form 8-K:
Filed on October 15, 2004, November 15, 2004 and December 15, 2004 (relating to
the monthly report to holders of the certificates).


                                      57
<PAGE>


                                   SIGNATURES

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


Date:  February 9, 2005                AIRPLANES LIMITED


                                       By: /s/ William M. McCann
                                          ------------------------------------
                                          William M. McCann
                                          Director and Principal Accounting
                                          Officer



Date:  February 9, 2005                AIRPLANES U.S. TRUST


                                       By: /s/ William M. McCann
                                          ------------------------------------
                                          William M. McCann
                                          Controlling Trustee and Principal
                                          Accounting Officer



<PAGE>


<TABLE>
                                                 AIRPLANES GROUP PORTFOLIO ANALYSIS
                                                        AT DECEMBER 31, 2005

                                                                                                    Appraised       % of Portfolio
                                                                         Aircraft       Serial        Value       by Appraised Value
          Region              Country               Lessee                 Type         Number    Jan 31, 2005    as of Jan 31, 2005
          ------              -------               ------               --------       ------    ------------    ------------------
<S>                        <C>                <C>                        <C>            <C>            <C>                <C>
Africa                     Nigeria            Bellview Airlines Ltd      B737-200A       23024          1,436              0.09%
Africa                     South Africa       Nationwide Airlines        B767-300ER      26200         39,572              2.42%
Africa                     Tunisia            Nouvelair Tunisie          A320-200          301         20,695              1.27%
Africa                     Tunisia            Nouvelair Tunisie          A320-200          348         21,796              1.33%
Africa                     Tunisia            Nouvelair Tunisie          MD83            49631          9,759              0.60%
Asia & Far East            Bangladesh         GMG Airlines               DHC8-300          307          5,078              0.31%
Asia & Far East            China              China Southern             B737-500        24897         12,098              0.74%
Asia & Far East            China              China Southern             B737-500        25182         12,569              0.77%
Asia & Far East            China              China Southern             B737-500        25183         13,228              0.81%
Asia & Far East            China              China Southern             B737-500        25188         13,242              0.81%
Asia & Far East            China              Xinjiang                   B757-200        26156         23,837              1.46%
Asia & Far East            Indonesia          Garuda                     B737-400        24683         14,537              0.89%
Asia & Far East            Indonesia          Garuda                     B737-400        24691         15,187              0.93%
Asia & Far East            Indonesia          PT Adam SkyConnection
                                                Airlines                 B737-400        26071         16,757              1.02%
Asia & Far East            Indonesia          PT Mandala Airlines        B737-200A       21685            892              0.05%
Asia & Far East            Indonesia          PT Mandala Airlines        B737-200A       22278          1,317              0.08%
Asia & Far East            Indonesia          PT Mandala Airlines        B737-200A       22803          1,922              0.12%
Asia & Far East            Indonesia          PT Mandala Airlines        B737-200A       22804          1,938              0.12%
Asia & Far East            Indonesia          PT Mandala Airlines        B737-200A       23023          2,005              0.12%
Asia & Far East            Indonesia          PT Metro Batavia           B737-200A       22802          1,276              0.08%
Asia & Far East            Indonesia          PT Metro Batavia           B737-400        24345         13,597              0.83%
Asia & Far East            Indonesia          PT Metro Batavia           B737-400        24687         14,326              0.88%
Asia & Far East            Japan              Skynet Asia                B737-400        26069         17,081              1.04%
Asia & Far East            Malaysia           AirAsia Berhad             B737-300        24905         14,705              0.90%
Asia & Far East            Malaysia           AirAsia Berhad             B737-300        24907         14,590              0.89%
Asia & Far East            Pakistan           Pakistan Int Airline       A300B4-200        269          3,555              0.22%
Asia & Far East            Philippines        Philippine Airlines        B737-400        24684         14,532              0.89%
Asia & Far East            Philippines        Philippine Airlines        B737-300        24770         12,971              0.79%
Asia & Far East            Philippines        Philippine Airlines        B737-400        26081         16,978              1.04%
Asia & Far East            South Korea        Asiana Airlines            B737-400        24520         14,471              0.89%
Asia & Far East            Taiwan             Far Eastern Air
                                                Transport                MD83            49950         10,787              0.66%
Australia & New Zealand    Australia          National Jet Systems       DHC8-100          229          2,658              0.16%
Europe                     Bulgaria           BH Air                     A320-200          294         21,026              1.29%
Europe                     Bulgaria           BH Air                     A320-200          349         22,472              1.37%
Europe                     Czech Republic     Travel Servis a.s.         B737-400        24911         15,868              0.97%
Europe                     France             Air France                 A320-200          203         20,024              1.22%
Europe                     France             Air France                 A320-200          220         20,299              1.24%
Europe                     France             Blueline                   MD83            49672          9,027              0.55%
Europe                     Hungary            SkyEurope Airlines
                                                Hungary Kft              B737-500        25185         12,917              0.79%
Europe                     Hungary            SkyEurope Airlines
                                                Hungary Kft              B737-500        25289         13,574              0.83%
Europe                     Iceland            Air Atlanta Icelandic      B767-300ER      26204         39,288              2.40%
Europe                     Iceland            Bluebird Cargo             B737-300SF      23499         11,380              0.70%
Europe                     Iceland            Bluebird Cargo             B737-300SF      23500         11,224              0.69%
Europe                     Italy              Air One SpA                B737-400        24906         15,493              0.95%
Europe                     Italy              Air One SpA                B737-400        24912         15,893              0.97%
Europe                     Italy              Air One SpA                B737-300        25179         14,922              0.91%
Europe                     Italy              Air One SpA                B737-300        25187         15,175              0.93%
Europe                     Italy              Meridiana SpA              MD83            49792          9,978              0.61%
Europe                     Italy              Meridiana SpA              MD83            49935         10,621              0.65%
Europe                     Italy              Meridiana SpA              MD83            49951         10,977              0.67%
Europe                     Netherlands        Capital Aviation
                                                Services B.V.            DHC8-300          244          4,665              0.29%
Europe                     Netherlands        Capital Aviation
                                                Services B.V.            DHC8-300          276          4,965              0.30%
Europe                     Norway             Wideroe's
                                                Flyveselskap A/S         DHC8-300          293          5,185              0.32%
Europe                     Norway             Wideroe's
                                                Flyveselskap A/S         DHC8-300          342          5,475              0.33%
Europe                     Portugal           euroAtlantic airways       B767-300ER      25411         37,577              2.30%
Europe                     Slovakia           SkyEurope Airlines a.s     B737-500        25186         12,147              0.74%
Europe                     Slovakia           SkyEurope Airlines a.s     B737-500        25191         13,569              0.83%
Europe                     Slovakia           SkyEurope Airlines a.s     B737-500        25288         13,244              0.81%
Europe                     Spain              Futura                     B737-400        24689         14,912              0.91%
Europe                     Spain              Futura                     B737-400        24690         14,996              0.92%
Europe                     Spain              Futura                     B737-400        25180         15,989              0.98%
Europe                     Spain              Spanair                    MD83            49620          9,274              0.57%
Europe                     Spain              Spanair                    MD83            49624          6,763              0.41%
Europe                     Spain              Spanair                    MD83            49626          9,074              0.55%
Europe                     Spain              Spanair                    MD83            49709          9,054              0.55%
Europe                     Spain              Spanair                    MD83            49936          9,881              0.60%
Europe                     Spain              Spanair                    MD83            49938         10,666              0.65%
Europe                     Turkey             FreeBird Airlines          MD83            49949         10,583              0.65%
Europe                     Turkey             Turk Hava Yollari          B737-400        24493         14,707              0.90%
Europe                     Turkey             Turk Hava Yollari          B737-400        24917         15,783              0.97%
Europe                     Turkey             Turk Hava Yollari          B737-400        25181         15,581              0.95%
Europe                     Turkey             Turk Hava Yollari          B737-400        25184         15,998              0.98%
Europe                     Turkey             Turk Hava Yollari          B737-400        25261         16,766              1.03%
Europe                     Turkey             Turk Hava Yollari          B737-400        26065         15,950              0.98%
Europe                     United Kingdom     Air Southwest              DHC8-300          296          5,077              0.31%
Europe                     United Kingdom     Air Southwest              DHC8-300          334          5,507              0.34%
Europe                     United Kingdom     easyJet Airline
                                                Company Limited          B737-300        23923         11,694              0.72%
Europe                     United Kingdom     Titan Airways Limited      B757-200        26151         22,977              1.41%
Latin America              Antigua            Caribbean Star Airlines    DHC8-300          232          4,569              0.28%
Latin America              Antigua            Caribbean Star Airlines    DHC8-300          266          4,902              0.30%
Latin America              Antigua            Caribbean Star Airlines    DHC8-300          267          5,086              0.31%
Latin America              Antigua            Caribbean Star Airlines    DHC8-300          298          5,041              0.31%
Latin America              Antigua            Caribbean Star Airlines    DHC8-300          300          5,230              0.32%
Latin America              Antigua            Liat                       DHC8-100          113          2,131              0.13%
Latin America              Antigua            Liat                       DHC8-100          140          2,143              0.13%
Latin America              Antigua            Liat                       DHC8-100          144          2,275              0.14%
Latin America              Antigua            Liat                       DHC8-100          270          2,644              0.16%
Latin America              Antigua            Liat                       DHC8-300          283          4,955              0.30%
Latin America              Brazil             Promodal Transportes
                                                Aereos Ltda.             DC8-71F         45970          5,163              0.32%
Latin America              Brazil             TAM Linhas Aereas          F100            11284          6,271              0.38%
Latin America              Brazil             TAM Linhas Aereas          F100            11285          6,330              0.39%
Latin America              Brazil             TAM Linhas Aereas          F100            11304          6,749              0.41%
Latin America              Brazil             TAM Linhas Aereas          F100            11305          6,762              0.41%
Latin America              Brazil             TAM Linhas Aereas          F100            11336          6,558              0.40%
Latin America              Brazil             TAM Linhas Aereas          F100            11347          6,682              0.41%
Latin America              Brazil             TAM Linhas Aereas          F100            11348          6,825              0.42%
Latin America              Brazil             TAM Linhas Aereas          F100            11371          6,656              0.41%
Latin America              Colombia           Avianca                    B767-300ER      24948         35,378              2.16%
Latin America              Colombia           Avianca                    B767-200ER      25421         26,381              1.61%
Latin America              Colombia           Avianca                    B757-200        26154         22,949              1.40%
Latin America              Colombia           Avianca                    MD83            49939          9,915              0.61%
Latin America              Colombia           Avianca                    MD83            49946         10,227              0.63%
Latin America              Colombia           Avianca                    MD83            53120         11,059              0.68%
Latin America              Colombia           Avianca                    MD83            53125         11,206              0.69%
Latin America              Colombia           Tampa                      DC8-71F         45945          3,787              0.23%
Latin America              Colombia           Tampa                      DC8-71F         45976          5,498              0.34%
Latin America              El Salvador        Taca International         ATR42-300         109          2,989              0.18%
Latin America              Mexico             Aeromexico                 MD82            49660          6,920              0.42%
Latin America              Mexico             Aeromexico                 MD82            49667          7,119              0.44%
Latin America              Mexico             Aeromexico                 MD87            49673          6,788              0.42%
Latin America              Mexico             Mexicana                   F100            11266          6,327              0.39%
Latin America              Mexico             Mexicana                   F100            11309          6,923              0.42%
Latin America              Mexico             Mexicana                   F100            11319          6,774              0.41%
Latin America              Mexico             Mexicana                   F100            11339          6,594              0.40%
Latin America              Mexico             Mexicana                   F100            11374          7,178              0.44%
Latin America              Mexico             Mexicana                   F100            11375          7,061              0.43%
Latin America              Mexico             Mexicana                   F100            11382          7,166              0.44%
Latin America              Mexico             Mexicana                   F100            11384          7,157              0.44%
Latin America              Uruguay            PLUNA Lineas Aereas
                                                Uraguayas S.A.           ATR42-300         284          3,785              0.23%
North America              Canada             AC Leasing                 A320-200          174         19,348              1.18%
North America              Canada             AC Leasing                 A320-200          175         19,364              1.18%
North America              Canada             AC Leasing                 A320-200          232         19,519              1.19%
North America              Canada             AC Leasing                 A320-200          284         20,051              1.23%
North America              Canada             AC Leasing                 A320-200          309         20,986              1.28%
North America              Canada             AC Leasing                 A320-200          404         21,769              1.33%
North America              Canada             Jetsgo Airlines            MD83            49941         10,270              0.63%
North America              Canada             Jetsgo Airlines            MD83            49943         10,869              0.66%
North America              United States of   Air Transport
                             America            International            DC8-71F         45811          5,095              0.31%
North America              United States of   Air Transport
                             America            International            DC8-71F         45813          5,047              0.31%
North America              United States of   Air Transport
                             America            International            DC8-71F         45973          4,813              0.29%
North America              United States of   Air Transport
                             America            International            DC8-71F         45978          3,848              0.24%
North America              United States of   Air Transport
                             America            International            DC8-71F         45993          4,882              0.30%
North America              United States of   Air Transport
                             America            International            DC8-71F         45994          3,911              0.24%
North America              United States of   Air Transport
                             America            International            DC8-71F         46065          4,457              0.27%
North America              United States of
                             America          Astar Air Cargo            DC8-73CF        46091          6,627              0.41%
North America              United States of
                             America          Pace Airlines              B737-300        23749         11,039              0.68%
North America              United States of
                             America          TWA Airlines LLC           MD83            49575          8,665              0.53%
Off Lease                  Off Lease          Off Lease                  ATR42-300         113          2,885              0.18%
Off Lease                  Off Lease          Off Lease                  DHC8-300C         242          4,746              0.29%
Off Lease                  Off Lease          Off Lease                  ATR42-300         249          3,449              0.21%
Off Lease                  Off Lease          Off Lease                  DHC8-100          258          2,724              0.17%
Off Lease                  Off Lease          Off Lease                  B747-200SF      21730         12,870              0.79%
Off Lease                  Off Lease          Off Lease                  B737-200A       22368          1,170              0.07%
Off Lease                  Off Lease          Off Lease                  B737-200A       22369          1,193              0.07%
Off Lease                  Off Lease          Off Lease                  B737-200A       22979          1,280              0.08%
Off Lease                  Off Lease          Off Lease                  B737-300        23177          9,631              0.59%
Off Lease                  Off Lease          Off Lease                  DC8-71F         45849          3,712              0.23%
Off Lease                  Off Lease          Off Lease                  DC8-71F         46066          3,486              0.21%
Off Lease                  Off Lease          Off Lease                  DC9-32          48128          1,025              0.06%
Off Lease                  Off Lease          Off Lease                  DC9-32          48129          1,584              0.10%
Off Lease                  Off Lease          Off Lease                  MD83            49789          9,803              0.60%
Other                      Ukraine            Ukraine International      B737-400        25190         16,129              0.99%
Other                      Ukraine            Ukraine International      B737-500        25192         12,433              0.76%
Other                      Ukraine            Ukraine International      B737-500        26075         12,636              0.77%
                                                                                                    ---------            -------
                                                                                                    1,635,078            100.00%
                                                                                                    =========            =======

As of December 31, 2004, six of the aircraft (MSN 258,22368,22369,48128,48129,49789) were subject to letters of intent for sale and
two of the aircraft (MSN 113, 23177) were subject to letters of intent for lease. As of the date of this Form 10Q, one of the
airacraft (MSN 258) has been sold, one aircraft (MSN 113) has delivered to a lessee and one of the off lease aircraft (MSN 22979)
has become subject to a letter of intent for sale.
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