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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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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 June 30, 2003                                            
| |   |  |                                                                                         
| |   |  | OR                                                                                      
| |   |  |                                                                                         
| | o |  | 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(SIC Code)Airplanes Limited
22 Grenville Street
St. Helier
Jersey, JE4 8PX
Channel Islands
(011 44 1534 609 000) |  | 13-3521640(I.R.S. Employer Identification No.)Airplanes U.S. Trust
1100 North Market Street,
Rodney Square North
Wilmington, Delaware
19890-0001
(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.

|     |  |    
|---- |  | ---
|Yesx |  | Noo

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

|     |  |    
|---- |  | ---
|Yesx |  | Noo

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                            |  | June 30, 2003
|                  |  |                                  |  |              
|Airplanes Limited |  | Ordinary Shares, $1.00 par value |  |               | 30 |               





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TABLE OF CONTENTS



|                              |                                                                                               |                                                                                                          |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|Part I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements (Unaudited)                                                     
|                              |                                                                                               | UNAUDITED CONDENSED BALANCE SHEETS                                                                      
|                              |                                                                                               | UNAUDITED CONDENSED STATEMENTS OF OPERATIONS                                                            
|                              |                                                                                               | UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE LOSS                                                     
|                              |                                                                                               | UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIT/NET LIABILITIES                                
|                              |                                                                                               | UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS                                                            
|                              |                                                                                               | Notes to the Unaudited Condensed Financial Statements                                                   
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              |                                                                                               | Introduction                                                                                            
|                              |                                                                                               | Results of Operations  Three Months Ended June 30, 2003 Compared with Three Months Ended June 30, 2002.
|                              | Item 3. Quantitative and Qualitative Disclosures about Market Risks                          
|                              | Item 4. Controls and Procedures                                                              
|Part II. Other Information   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|Exhibit 31                   
|Exhibit 32                   



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##### Table of Contents



Airplanes Limited and Airplanes U.S. Trust

Form 10-Q for the Three Month Period Ended June 30, 2003

Index

|                                                     |  |  |                                                                                       |  |   |    |  |                                                                                                                                 |  |          |  | 
|---------------------------------------------------- |  |  | ------------------------------------------------------------------------------------- |  | - | -- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|                                                     |  |  |                                                                                       |  |   |    |  |                                                                                                                                 |  | Page No.
|Part I                                               |  |  | Financial Information                                                                 |  |   |    | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 1                                               |  |  | Financial Statements (Unaudited)                                                      |  |   | 3  | 
|                                                     |  |  |                                                                                       |  |   |    | 
|                                                     |  |  |                                                                                       |  |  |    |  | Unaudited Condensed Balance Sheets  June 30, 2003 and March 31, 2003                                                           |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Unaudited Condensed Statements of Operations -
Three Months Ended June 30, 2003 and June 30, 2002                               |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Unaudited Condensed Statements of Comprehensive
Income / (Loss)  Three Months Ended June 30, 2003 and
June 30, 2002            |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Unaudited
Statements of Changes in Shareholders
Deficit / Net Liabilities  Three Months Ended June 30,
2003 and June 30, 2002 |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Unaudited Condensed Statements of Cash Flows 
Three Months Ended June 30, 2003 and June 30, 2002                               |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Notes to the Unaudited Condensed Financial Statements                                                                           |  |          |  | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 2                                               |  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  |   | 12 | 
|                                                     |  |  |                                                                                       |  |  |    |  | Introduction                                                                                                                    |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Results of Operations  Three Months Ended June 30, 2003 compared with
Three Months Ended June 30, 2002                         |  |          |  | 
|                                                     |  |  |                                                                                       |  |  |    |  | Comparison of Actual Cash flows versus the 2001 Base Case for the
Two Month Period from May 10, 2003 to July 15, 2003           |  |          |  | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 3                                               |  |  | Quantitative and Qualitative Disclosures about Market Risks                           |  |   | 44 | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 4                                               |  |  | Controls and Procedures                                                               |  |   | 48 | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Part II                                              |  |  | Other Information                                                                     |  |   |    | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 1                                               |  |  | Legal Proceedings                                                                     |  |   | 49 | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Item 6                                               |  |  | Exhibits and Reports on Form 8-K                                                      |  |   | 49 | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Signatures                                           |  |  |                                                                                       | 
|                                                     |  |  |                                                                                       |  |   |    | 
|Appendix 1 Portfolio Information as at June 30, 2003 |  |  |                                                                                       | 

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Part I. FINANCIAL INFORMATION




Item 1. Financial Statements (Unaudited)




AIRPLANES GROUP

UNAUDITED CONDENSED BALANCE SHEETS

|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |     |  
|------------------------------------------------------------------------------------------------ | ---------------------------- |  | ------------ | --- | ------------ |  | -------- | -- | ------- |  | --------- | --- | --------- |  | ------ | --- | - |  | ---- | -- | - |  | ------ | --- | -
|                                                                                                 |                              |  | March 31,    |     | June 30,    
|                                                                                                 |                              |  |              |     |             
|                                                                                                 |                              |  | 2003         |     | 2003        
|                                                                                                 |                              |  |              |     |             
|                                                                                                 |                              |  | Airplanes    |     | Airplanes    |  |          |    |         |  | Airplanes |     | Airplanes |  |        |     |  
|                                                                                                 |                              |  | Limited      |     | Trust        |  | Combined |    | Limited |  | Trust     |     | Combined 
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |          
|                                                                                                 |                              |  | ($ millions) |     | ($ millions)
|ASSETS                                                                                           |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|                                                                                                 |                              |  |              |     |             
|Cash                                                                                             |                              |  | 135          |     |              |  | 6        |    |         |  | 141       |     |           |  | 130    |     |   |  | 6    |    |   |  | 136    |    
|Accounts receivable                                                                              |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|                                                                                                 | Trade receivables            |  |              | 30  |              |  |          | 7  |         |  |           | 37  |           |  |        | 32  |   |  |      | 9  |   |  |        | 41  |  
|                                                                                                 | Allowance for doubtful debts |  |              | (14 | )            |  |          | (6 | )       |  |           | (20 | )         |  |        | (16 | ) |  |      | (7 | ) |  |        | (23 | )
|Amounts due from Airplanes Limited                                                               |                              |  |             |     |              |  | 58       |    |         |  | 58        |     |           |  |       |     |   |  | 59   |    |   |  | 59     |    
|Net investment in capital and sales
type leases                                                  |                              |  | 3            |     |              |  |         |    |         |  | 3         |     |           |  | 3      |     |   |  |     |    |   |  | 3      |    
|Aircraft, net                                                                                    |                              |  | 1,944        |     |              |  | 111      |    |         |  | 2,055     |     |           |  | 1,911  |     |   |  | 108  |    |   |  | 2,019  |    
|Other assets                                                                                     |                              |  | 1            |     |              |  |         |    |         |  | 1         |     |           |  | 3      |     |   |  |     |    |   |  | 3      |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|Total assets                                                                                     |                              |  | 2,099        |     |              |  | 176      |    |         |  | 2,275     |     |           |  | 2,063  |     |   |  | 175  |    |   |  | 2,238  |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|LIABILITIES                                                                                      |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|                                                                                                 |                              |  |              |     |             
|Accrued expenses and other liabilities                                                           |                              |  | 2,003        |     |              |  | 193      |    |         |  | 2,196     |     |           |  | 2,144  |     |   |  | 212  |    |   |  | 2,356  |    
|Amounts due from Airplanes Trust                                                                 |                              |  | 58           |     |              |  |         |    |         |  | 58        |     |           |  | 59     |     |   |  |     |    |   |  | 59     |    
|Indebtedness                                                                                     |                              |  | 2,924        |     |              |  | 285      |    |         |  | 3,209     |     |           |  | 2,919  |     |   |  | 284  |    |   |  | 3,203  |    
|Provision for maintenance                                                                        |                              |  | 262          |     |              |  | 13       |    |         |  | 275       |     |           |  | 267    |     |   |  | 13   |    |   |  | 280    |    
|Deferred income taxes                                                                            |                              |  | 13           |     |              |  | 18       |    |         |  | 31        |     |           |  |       |     |   |  | 16   |    |   |  | 16     |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|Total liabilities                                                                                |                              |  | 5,260        |     |              |  | 509      |    |         |  | 5,769     |     |           |  | 5,389  |     |   |  | 525  |    |   |  | 5,914  |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|Common Stock, $1 par value per share,
Authorised 10,000 shares; issued and
outstanding 30 shares |                              |  |             |     |              |  |         |    |         |  |          |     |           |  |       |     |   |  |     |    |   |  |       |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|Net liabilities                                                                                  |                              |  | (3,161       | )   |              |  | (333     | )  |         |  | (3,494    | )   |           |  | (3,326 | )   |   |  | (350 | )  |   |  | (3,676 | )  
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    
|                                                                                                 |                              |  | 2,099        |     |              |  | 176      |    |         |  | 2,275     |     |           |  | 2,063  |     |   |  | 175  |    |   |  | 2,238  |    
|                                                                                                 |                              |  |              |     |              |  |          |    |         |  |           |     |           |  |        |     |   |  |      |    |   |  |        |    

The accompanying notes are an integral part of the unaudited condensed financial statements

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AIRPLANES GROUP
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

|                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|------------------------------------------------ |  | --------------------------- | ---- | ------------ |  | -------- | --- | ------- |  | --------- | ---- | --------- |  |  | ---- | - |  |  | --- | - |  |  | ---- | -
|                                                 |  | Three Months Ended June 30,
|                                                 |  |                            
|                                                 |  | 2003                        |      | 2003        
|                                                 |  |                             |      |             
|                                                 |  | Airplanes                   |      | Airplanes    |  |          |     |         |  | Airplanes |      | Airplanes |  |  |      |  
|                                                 |  | Limited                     |      | Trust        |  | Combined |     | Limited |  | Trust     |      | Combined 
|                                                 |  |                             |      |              |  |          |     |         |  |           |      |          
|                                                 |  | ($ millions)                |      | ($ millions)
|Revenues                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Aircraft leasing                                 |  |                             | 99   |              |  |          | 10  |         |  |           | 109  |           |  |  | 71   |   |  |  | 4   |   |  |  | 75   |  
|Aircraft sales                                   |  |                             | 4    |              |  |          |    |         |  |           | 4    |           |  |  | 1    |   |  |  |    |   |  |  | 1    |  
|                                                 |  |                            
|Expenses                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Cost of Aircraft sold                            |  |                             | (4   | )            |  |          |    |         |  |           | (4   | )         |  |  | (2   | ) |  |  |    |   |  |  | (2   | )
|Depreciation and amortisation                    |  |                             | (34  | )            |  |          | (2  | )       |  |           | (36  | )         |  |  | (31  | ) |  |  | (2  | ) |  |  | (33  | )
|Net interest expense                             |  |                             | (154 | )            |  |          | (15 | )       |  |           | (169 | )         |  |  | (182 | ) |  |  | (18 | ) |  |  | (200 | )
|Bad and doubtful debts                           |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | (2   | ) |  |  | (1  | ) |  |  | (3   | )
|Other lease costs                                |  |                             | (21  | )            |  |          | (2  | )       |  |           | (23  | )         |  |  | (25  | ) |  |  | (1  | ) |  |  | (26  | )
|Selling, general and
administrative expenses     |  |                             | (7   | )            |  |          | (1  | )       |  |           | (8   | )         |  |  | (7   | ) |  |  | (1  | ) |  |  | (8   | )
|                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Operating loss before
provision for income taxes |  |                             | (117 | )            |  |          | (10 | )       |  |           | (127 | )         |  |  | (177 | ) |  |  | (19 | ) |  |  | (196 | )
|Income tax benefit                               |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | 13   |   |  |  | 2   |   |  |  | 15   |  
|                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net loss                                         |  |                             | (117 | )            |  |          | (10 | )       |  |           | (127 | )         |  |  | (164 | ) |  |  | (17 | ) |  |  | (181 | )
|                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  

The accompanying notes are an integral part of the unaudited condensed financial statements

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AIRPLANES GROUP
UNAUDITED CONDENSED STATEMENT OF
COMPREHENSIVE LOSS

|                                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|-------------------------------------------------------- |  | --------------------------- | ---- | ------------ |  | -------- | --- | ------- |  | --------- | ---- | --------- |  |  | ---- | - |  |  | --- | - |  |  | ---- | -
|                                                         |  | Three Months Ended June 30,
|                                                         |  |                            
|                                                         |  | 2002                        |      | 2003        
|                                                         |  |                             |      |             
|                                                         |  | Airplanes                   |      | Airplanes    |  |          |     |         |  | Airplanes |      | Airplanes |  |  |      |  
|                                                         |  | Limited                     |      | Trust        |  | Combined |     | Limited |  | Trust     |      | Combined 
|                                                         |  |                             |      |              |  |          |     |         |  |           |      |          
|                                                         |  | ($ millions)                |      | ($ millions)
|Loss for the period                                      |  |                             | (117 | )            |  |          | (10 | )       |  |           | (127 | )         |  |  | (164 | ) |  |  | (17 | ) |  |  | (181 | )
|Other Comprehensive Loss
- Net change in cashflow hedges |  |                             | (20  | )            |  |          | (2  | )       |  |           | (22  | )         |  |  | (1   | ) |  |  |    |   |  |  | (1   | )
|                                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Total Comprehensive loss                                 |  |                             | (137 | )            |  |          | (12 | )       |  |           | (149 | )         |  |  | (165 | ) |  |  | (17 | ) |  |  | (182 | )
|                                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  

The accompanying notes are an integral part of the unaudited condensed financial statements

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AIRPLANES GROUP




UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIT/NET LIABILITIES

|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |              |  |  |     |       |  |  |   |  |  |              |     |  |  |  |       | 
|------------------------- |  | -------------------------------------------------- | - | --------------- |  | ------------- | ----- | ------------ |  | ------------ | -- | ------------- |  | ------------ | ----- | ------------ |  |  | --- | ----- |  |  | - |  |  | ------------ | --- |  |  |  | ----- | 
|                          |  | Three Months Ended June 30, 2003 and June 30, 2002
|                          |  | Airplanes Limited                                  |   | Airplanes Trust |  | Combined     
|                          |  |                                                    |   |                 |  |              
|                          |  |                                                    |   |                 |  |               |       |              |  | Other        |    |               |  |              |       |              |  |  |     | Other |  |  |   |  |  | Shareholders
|                          |  | Share                                              |   | Accumulated     |  | Comprehensive |       | Shareholders |  | Accumulated  |    | Comprehensive |  | Shareholders |       | Deficit/Net 
|                          |  | Capital                                            |   | Loss            |  | Loss          |       | Deficit      |  | Loss         |    | Loss          |  | Deficit      |       | Liabilities 
|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |             
|                          |  | ($ millions)                                       |   | ($ millions)    |  | ($ millions)  |       | ($ millions) |  | ($ millions) |    | ($ millions)  |  | ($ millions) |       | ($ millions)
|Balance at March 31, 2002 |  |                                                    |  |                 |  |               | 2,454 |              |  |              | 33 |               |  |              | 2,487 |              |  |  | 270 |       |  |  | 3 |  |  |              | 273 |  |  |  | 2,760 | 
|                          |  |                                                   
|Net loss for the period   |  |                                                    |  |                 |  |               | 117   |              |  |              |   |               |  |              | 117   |              |  |  | 10  |       |  |  |  |  |  |              | 10  |  |  |  | 127   | 
|                          |  |                                                   
|Other Comprehensive Loss  |  |                                                    |  |                 |  |               |      |              |  |              | 20 |               |  |              | 20    |              |  |  |    |       |  |  | 2 |  |  |              | 2   |  |  |  | 22    | 
|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |              |  |  |     |       |  |  |   |  |  |              |     |  |  |  |       | 
|Balance at June 30, 2002  |  |                                                    |  |                 |  |               | 2,571 |              |  |              | 53 |               |  |              | 2,624 |              |  |  | 280 |       |  |  | 5 |  |  |              | 285 |  |  |  | 2,909 | 
|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |              |  |  |     |       |  |  |   |  |  |              |     |  |  |  |       | 
|Balance at March 31, 2003 |  |                                                    |  |                 |  |               | 3,090 |              |  |              | 71 |               |  |              | 3,161 |              |  |  | 326 |       |  |  | 7 |  |  |              | 333 |  |  |  | 3,494 | 
|                          |  |                                                   
|Net loss for the period   |  |                                                    |  |                 |  |               | 164   |              |  |              |   |               |  |              | 164   |              |  |  | 17  |       |  |  |  |  |  |              | 17  |  |  |  | 181   | 
|                          |  |                                                   
|Other Comprehensive Loss  |  |                                                    |  |                 |  |               |      |              |  |              | 1  |               |  |              | 1     |              |  |  |    |       |  |  |  |  |  |              |    |  |  |  | 1     | 
|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |              |  |  |     |       |  |  |   |  |  |              |     |  |  |  |       | 
|Balance at June 30, 2003  |  |                                                    |  |                 |  |               | 3,254 |              |  |              | 72 |               |  |              | 3,326 |              |  |  | 343 |       |  |  | 7 |  |  |              | 350 |  |  |  | 3,676 | 
|                          |  |                                                    |   |                 |  |               |       |              |  |              |    |               |  |              |       |              |  |  |     |       |  |  |   |  |  |              |     |  |  |  |       | 

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AIRPLANES GROUP
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|-------------------------------------------------------------------------------- |  | --------------------------- | ---- | ------------ |  | -------- | --- | ------- |  | --------- | ---- | --------- |  |  | ---- | - |  |  | --- | - |  |  | ---- | -
|                                                                                 |  | Three Months Ended June 30,
|                                                                                 |  |                            
|                                                                                 |  | 2002                        |      | 2003        
|                                                                                 |  |                             |      |             
|                                                                                 |  | Airplanes                   |      | Airplanes    |  |          |     |         |  | Airplanes |      | Airplanes |  |  |      |  
|                                                                                 |  | Limited                     |      | Trust        |  | Combined |     | Limited |  | Trust     |      | Combined 
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |          
|                                                                                 |  | ($ millions)                |      | ($ millions)
|Cash flows from operating activities                                             |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net loss                                                                         |  |                             | (117 | )            |  |          | (10 | )       |  |           | (127 | )         |  |  | (164 | ) |  |  | (17 | ) |  |  | (181 | )
|Adjustment to reconcile (net loss) to net
cash provided by operating activities: |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Depreciation                                                                     |  |                             | 34   |              |  |          | 2   |         |  |           | 36   |           |  |  | 31   |   |  |  | 2   |   |  |  | 33   |  
|Aircraft maintenance, net                                                        |  |                             | 8    |              |  |          | 1   |         |  |           | 9    |           |  |  | 5    |   |  |  |    |   |  |  | 5    |  
|Loss on disposal of aircraft                                                     |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | 1    |   |  |  |    |   |  |  | 1    |  
|Deferred income taxes                                                            |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | (13  | ) |  |  | (2  | ) |  |  | (15  | )
|Provision for bad debts                                                          |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | 2    |   |  |  | 1   |   |  |  | 3    |  
|Accrued and deferred interest expense                                            |  |                             | 111  |              |  |          | 11  |         |  |           | 122  |           |  |  | 146  |   |  |  | 15  |   |  |  | 161  |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Changes in operating assets & liabilities:                                       |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Accounts receivable                                                              |  |                             |     |              |  |          | 1   |         |  |           | 1    |           |  |  | (2   | ) |  |  | (2  | ) |  |  | (4   | )
|Intercompany account movements                                                   |  |                             | 3    |              |  |          | (3  | )       |  |           |     |           |  |  | 1    |   |  |  | (1  | ) |  |  |     |  
|Other accruals and liabilities                                                   |  |                             | 2    |              |  |          |    |         |  |           | 2    |           |  |  | (4   | ) |  |  | 4   |   |  |  |     |  
|Other assets                                                                     |  |                             | (2   | )            |  |          |    |         |  |           | (2   | )         |  |  | (3   | ) |  |  |    |   |  |  | (3   | )
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net cash provided by operating activities                                        |  |                             | 39   |              |  |          | 2   |         |  |           | 41   |           |  |  |     |   |  |  |    |   |  |  |     |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Cash flows from investing activities                                             |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Purchase/Sale of aircraft                                                        |  |                             | 3    |              |  |          |    |         |  |           | 3    |           |  |  |     |   |  |  | 1   |   |  |  | 1    |  
|Capital and sales type leases                                                    |  |                             |     |              |  |          |    |         |  |           |     |           |  |  | 1    |   |  |  |    |   |  |  | 1    |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net cash provided by investing activities                                        |  |                             | 3    |              |  |          |    |         |  |           | 3    |           |  |  | 1    |   |  |  | 1   |   |  |  | 2    |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Cash flows from financing activities                                             |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Repayment of indebtedness                                                        |  |                             | (23  | )            |  |          | (2  | )       |  |           | (25  | )         |  |  | (6   | ) |  |  | (1  | ) |  |  | (7   | )
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net cash used in financing activities                                            |  |                             | (23  | )            |  |          | (2  | )       |  |           | (25  | )         |  |  | (6   | ) |  |  | (1  | ) |  |  | (7   | )
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Net increase / (decrease) in cash                                                |  |                             | 19   |              |  |          |    |         |  |           | 19   |           |  |  | (5   | ) |  |  |    |   |  |  | (5   | )
|Cash at beginning of period                                                      |  |                             | 136  |              |  |          | 6   |         |  |           | 142  |           |  |  | 135  |   |  |  | 6   |   |  |  | 141  |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Cash at end of period                                                            |  |                             | 155  |              |  |          | 6   |         |  |           | 161  |           |  |  | 130  |   |  |  | 6   |   |  |  | 136  |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Cash paid in respect of:                                                         |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  
|Interest                                                                         |  |                             | 43   |              |  |          | 4   |         |  |           | 47   |           |  |  | 36   |   |  |  | 3   |   |  |  | 39   |  
|                                                                                 |  |                             |      |              |  |          |     |         |  |           |      |           |  |  |      |   |  |  |     |   |  |  |      |  

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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 cash flows 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 to present a fair statement of the information
presented as of June 30, 2003 and for the three month period ended
June 30, 2003. Such adjustments are of a normal, recurring nature. The
results of operations for the three month period ended June 30, 2003
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

As discussed in greater detail in Item 2. Managements Discussion
and Analysis of Financial Condition and Results of Operations, in the
three month period to June 30, 2003, we have continued to suffer from
a difficult business environment. During the past two years, there has
been a general downturn in the world economic climate, with a
consequential negative impact on the commercial aviation industry.
Global economic conditions, exacerbated by the terrorist attacks of
September 11, 2001, the military action of the U.S. and its allies in
Afghanistan, the terrorist attack in Bali, the war in Iraq, the
terrorist attack in Saudi Arabia and the outbreak of Severe Acute
Respiratory Syndrome (SARS) have adversely impacted the commercial
aviation industry.

To the extent that we have sufficient available funds, we are required
to pay a minimum principal amount on the class A notes in order to
maintain certain loan to initial appraised value ratios. At the July
15, 2003 payment date we were ahead of the required class A minimum
principal payment schedule to the extent of $9.1 million. Accordingly
no payments were due in respect of the minimum principal amount on the
class A notes.

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Our overall cash performance since September 11, 2001 has been
significantly weaker than was assumed in the base case assumptions in
our offering memorandum dated March 15, 2001 (the 2001 Base Case),
the reasons for which are discussed in Item 2. Managements
Discussions and Analysis of Financial Condition and Results of
Operations  Recent Developments. 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. We expect
we will not resume payment of class A principal adjustment amount in
the future and by the next payment date on August 15 of this year we
will no longer be ahead of the required class A minimum principal
payment schedule. Therefore we will recommence payments of minimum
principal on the class A notes to the extent of available cashflows
from this 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 order of priority, and,
given our expected cash performance we expect that, in addition to our
current inability to pay scheduled principal on the class C and D
notes, our cash flows will be inadequate to pay interest and minimum
principal on the class B notes and interest on the class C and D notes
beginning in the final quarter of 2003.

While our actual results may differ from our current expectations,
such differences as may arise are only likely to affect the timing of
when we may cease to pay interest and minimum principal on the class B
notes and interest on the class C and class D notes.

In the event that cash flows are inadequate to pay interest and
minimum principal on the class B notes and interest on the class C and
D notes, it is likely to be a long period of time before we will be
able to resume making any payments on these notes. If we fail to pay
interest when due, as is currently projected to be the case with
respect to the class B, C and D notes beginning in the final quarter
of 2003, interest will accrue on the unpaid interest. In these
circumstances, since interest (and 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 cash flows will be
used first to service interest and, to the extent possible, minimum
principal on the class A notes. To the extent that cash is available
at any subsequent time to make payments ranking below class A minimum
principal, cash flows will 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 the likelihood
of remaining cash flows over the life of Airplanes Group being
sufficient to resume any payments of class B principal or any payments
of interest or principal on the class C and, ultimately, the class D
notes is even further diminished. Thus, we may be unable to repay in
full principal on some or all of these classes of notes by their final
maturity date. In addition, to the extent that we are able to resume
making payments on these notes, payments will be made according to the
priority of payments, commencing with the then most senior class and
only making payments on more junior classes to the extent of available
cash flows. The more junior the class of notes is in the order of
priority, the greater the risk that we may be unable to repay in full
principal on that class of notes by its

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final maturity date. A failure to make payments on a class of notes
will result in failure to make payments on the corresponding class of
certificates.

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
subsidiary undertakings (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 June 30, 2003 represents the aggregate of the
outstanding class A to D notes and class E notes as set out in more
detail in Item 3. Quantitative and Qualitative Disclosures about
Market Risks (net of approximately $0.2 million of discounts on issue
and net of $13 million of class E notes subsequently cancelled as
referred to above). Airplanes Limited and Airplanes Trust have each
fully and unconditionally guaranteed each others obligations under the
relevant notes (the Guarantees).

The accompanying unaudited condensed interim financial statements of
Airplanes Limited and Airplanes Trust (pages 3 to 11) have been
prepared in accordance with United States generally accepted accounting
principles for interim financial information and in accordance with the
requirements of the

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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 cash
flows, 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, 2003, previously filed with the Securities and Exchange
Commission.

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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 June 30, 2003, we owned 176 aircraft, 157 of which were
on lease to 53 lessees in 31 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.

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:



| |  |  | 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
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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.

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General

Substantially all of our business consists of aircraft operating lease
activities. We may also engage in aircraft sales subject to certain
limitations and 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, 2003.

Recent Developments

Overview

In the three month period to June 30, 2003, we have continued to
suffer from a difficult business environment. During the past two
years, there has been a general downturn in the world economic
climate, with a consequential negative impact on the commercial
aviation industry. Global economic conditions, exacerbated by the
terrorist attacks of September 11, 2001, the military action of the
U.S. and its allies in Afghanistan, the terrorist attack in Bali, the
war in Iraq, the terrorist attack in Saudi Arabia and the outbreak of
SARS have adversely impacted the commercial aviation industry. As
previously reported the resulting reduction in passenger numbers and
consequential reduction in flight schedules by airlines has caused a
continued decline in demand for aircraft. Demand for freighter
aircraft has also fallen. Some carriers, including two US majors
(United Airlines and US Airways) and also including two of our lessees
(one Canadian and one Colombian), have filed for bankruptcy, while
others, including many of our lessees, have suffered large losses or
face severe financial difficulties. Oversupply of aircraft has
resulted in increased aircraft downtime, aircraft being parked, a fall
in market value of aircraft (especially older technology and less
fuel-efficient aircraft or models no longer in production) and lower
lease rates throughout the industry. We have ourselves experienced
increased time between redelivery and re-leasing of aircraft, a
decline in lease rates upon re-leasing or extensions of leases, and a
decline in sales prices for our aircraft. We have had to restructure
a large number of leases, resulting in rental reductions, holidays,
deferrals and the early return of aircraft. In addition, we
currently expect new Airworthiness Directives (ADs) to be issued to
improve security on aircraft, the
costs of compliance with which, to the extent that they are

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not the
responsibility of lessees under their leases or if the aircraft are
not on lease, will be our responsibility. See Compliance with
Governmental and Technical Regulation below.

Performance

For the reasons outlined above we have not been able to meet either
the base case assumptions in our original prospectus dated March 28,
1996 (the 1996 Base Case) or the 2001 Base Case assumptions. In
light of lease restructurings and a weak leasing market generally, we
are generating revenues at significantly lower levels than we had
expected and at levels which we expect will be inadequate to pay
interest and minimum principal on the class B notes and interest on
the class C and D notes beginning in the final quarter of 2003.

Specifically, as a result of the greater than expected decline in value
of the aircraft in our portfolio, we have been required to pay class A
principal adjustment amount to the extent that we have had available
cash flows in order to maintain certain loan to appraised value ratios.
We have paid class A principal adjustment amount in April and May 1998
and from February 1999 to April 2003. Since class A principal
adjustment amount ranks ahead of scheduled principal payments on the
class C and D notes, we were unable to make certain scheduled principal
payments on the class C and D notes between April 1999 and March 2000,
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.

At the July 15, 2003 payment date we were ahead of the required class A
minimum principal payment schedule to the extent of $9.1 million.
Accordingly, no payments were due in respect of the minimum principal
amount on the class A notes. However, our overall cash performance
since September 11, 2001 has been significantly weaker than was assumed
in the 2001 Base Case, the reasons for which are discussed 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. We expect we will not resume payment of class A
principal adjustment amount in the future and by the next payment date
on August 15 of this year, we will no longer be ahead of the required
class A minimum principal payment schedule. Therefore we will
recommence payments of minimum principal on the class A notes to the
extent of available cashflows from this 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 order
of priority, and, given our expected cash performance we expect that,
in addition to our current inability to pay scheduled principal on the
class C and D notes, our cash flows will be inadequate to pay interest
and minimum principal on the class B notes and interest on the class C
and D notes beginning in the final quarter of 2003.

While our actual results may differ from our current expectations,
such differences as may arise are only likely to affect the timing of
when we may cease to pay

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interest and minimum principal on the class B notes and interest on
the class C and class D notes.

In the event that cash flows are inadequate to pay interest and minimum
principal on the class B notes and interest on the class C and D notes,
it is likely to be a long period of time before we will be able to
resume making any payments on these notes. If we fail to pay interest
when due, as is currently projected to be the case with respect to the
class B, C and D notes beginning in the final quarter of 2003, interest
will accrue on the unpaid interest. In these circumstances, since
interest (and 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 cash flows will be used first to service interest
and, to the extent possible, minimum principal on the class A notes. To
the extent that cash is available at any subsequent time to make
payments ranking below class A minimum principal, cash flows will 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 the likelihood of remaining cash flows over the life
of Airplanes Group being sufficient to resume any payments of class B
principal or any payments of interest or principal on the class C and,
ultimately, the class D notes is even further diminished. Thus, we may
be unable to repay in full principal on some or all of these classes of
notes by their final maturity date. In addition, to the extent that we
are able to resume making payments on these notes, payments will be
made according to the priority of payments, commencing with the then
most senior class and only making payments on more junior classes to
the extent of available cash flows. The more junior the class of notes
is in the order of priority, the greater the risk that we may be unable
to repay in full principal on that class of notes by its final maturity
date. A failure to make payments on a class of notes will result in
failure to make payments on the corresponding class of certificates.

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 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.

This vulnerability of the various classes of notes has been reflected
in actions taken by the rating agencies which reevaluated several
structured aircraft financings in the last twelve months including
downgrades of our certificates by each of the rating agencies since
March 31, 2003.

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Set out in the table below are the current ratings of our certificates:-

|             |  |               |        |       |  |       |  |             |  |             |  |              |  |  |  | 
|------------ |  | ------------- | ------ | ----- |  | ----- |  | ----------- |  | ----------- |  | ------------ |  |  |  | 
|             |  | Outstanding   |        |       |  |       |  |             |  |             |  |              |  | 
|             |  | Principal     |        |       |  |       |  |             |  |             |  |              |  | 
|             |  | Balance as    |        |       |  |       |  |             |  |             |  |              |  | 
|             |  | at August 15, |        |       |  |       |  |             |  |             |  | Moody's (S&P
|Certificate  |  | 2003          |        | S & P |  | Fitch |  | equivalent)
|             |  |               |        |       |  |       |  |            
|Subclass A-6 |  | $             | 185.7m |       |  | AA-   |  | BBB-        |  | A2 (A)     
|Subclass A-8 |  | $             | 700.0m |       |  | A     |  | BB          |  | Baa3 (BBB-)
|Subclass A-9 |  | $             | 750.0m |       |  | A     |  | BB          |  | Ba2 (BB)   
|Class B      |  | $             | 232.1m |       |  | CCC   |  | CCC         |  | Caa2 (CCC) 
|Class C      |  | $             | 349.8m |       |  | CCC   |  | CCC         |  | Caa3 (CCC-)
|Class D      |  | $             | 395.1m |       |  | CCC   |  | CC          |  | Ca (CC)    

Standard & Poors has also placed each class and subclass of our
certificates on negative outlook.

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 on their final maturity date. 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.

Commercial Opportunities for Certain Types of our Aircraft

The market for certain aircraft models is currently very weak and is
expected to remain so. For example, we currently lease three MD-11
aircraft, representing 5.95% of our fleet by appraised value as of
January 31, 2003, to a Latin American lessee. The leases are due to
expire between March and December 2004. However, due to difficult
trading conditions for the current lessee which is in arrears, it has
been agreed with the lessee that the aircraft will be returned in
2003. We are examining all possibilities in respect of the
remarketing of the MD-11 aircraft, including, subject to the
restrictions in our indentures, the possibility of selling the
aircraft or of converting them to freighter aircraft. The current
market value of these aircraft and the cost of conversion (which would
involve substantial cash expenditure by us) means it is highly
unlikely that we would be able to sell or convert these aircraft in a
manner which would meet the indenture requirements as outline below in
-Aircraft Sales. Likewise, we are examining all opportunities for
our DC8-71F aircraft, some of which are currently non revenue-earning.
The current market value of these aircraft is such that it is highly
unlikely that we would be able to sell or scrap the aircraft at prices
which would meet the indenture requirements as outlined below in
-Aircraft Sales. Thus we may have no choice but to keep these
aircraft on the ground (and incur the costs of storage, maintenance
and insurance).

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Aircraft Sales

Our indentures restrict our ability to sell aircraft. Sales of an
aircraft are generally permitted only if the sales proceeds are at
least equal to 105% of the aggregate outstanding class A to D
principal allocable to that aircraft by reference to the most recent
appraised value (the note target price). Where note target price
cannot be achieved, sales are subject to, among other conditions, a
$50 million annual limit and a $500 million overall limit (determined
in each case by reference to the appraised value of the aircraft to be
sold at the original acquisition of the portfolio in 1996). As a
result of the market price for aircraft declining at a rate greater
than the decrease in outstanding principal of the class A to D notes
due to the factors discussed in Recent Developments, it is
increasingly difficult to achieve sales of aircraft at or above note
target price. Our ability to generate sales of aircraft at or above
note target price will further decline as we fall behind our 2001 Base
Case assumptions as to our principal repayments. As we have already
utilized the current fiscal years $50 million limit, it is becoming
more likely that this indenture restriction will present a real
impediment to the ability of the servicer to maximize cash flow from
the portfolio. For example it may be in the best economic interests
of Airplanes Group to sell a specific aircraft if a suitable
opportunity is available rather than lease it or have it non-revenue
earning and requiring outlay for storage, maintenance and insurance,
yet the indentures may prohibit this.

Consent Solicitation for Indenture Amendment

To retain flexibility in light of the changed circumstances described
above, we have resolved to seek the consent of our certificate and
noteholders to amend certain provisions of the indentures:



| |  |  | to permit us to sell aircraft, engines or parts pursuant to
any Aircraft Agreement (as defined in the indentures) without a
minimum sales price, without limitation on the value of aircraft
that can be sold annually or in the aggregate and without any
requirements that after any sale, the portfolio meets any
lessee, country or regional limitations so long as the board of
directors of Airplanes Limited or the controlling trustees of
Airplanes Trust, as applicable, have unanimously confirmed that
such a sale is in the best interests of Airplanes Group and the
noteholders and certain other conditions are met; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | to permit us to enter into swaps with a counterparty having
at the time of entry into the swap (i) a short-term unsecured
debt rating of A-1 or higher by Standard & Poors and (ii) a
long-term unsecured debt rating of A2 or higher by Moodys, or
otherwise approved by a majority of the board of directors of
Airplanes Limited and the controlling trustees of Airplanes
Trust subject to prior written confirmation from rating agencies
that entry into such swap would not result in the downgrade or
withdrawal of such rating agencys current credit rating of any
class or subclass of certificates.                      

We believe that the first proposed amendment should allow us to
generate some additional cash flows. In many cases, it may be in our
best economic interest to sell an aircraft. However we are generally
constrained by restrictions in the indentures

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which require us to sell aircraft at not less than the note target
price. As discussed above in Aircraft Sales it is becoming
increasingly difficult to obtain the note target price for sales of
aircraft. The initial appraised values are all significantly higher
than current appraised values which have continued to decline.

The initial appraised values are in all cases significantly higher than
current appraised values. In the case of the MD-80s, for example,
because the note target price could not be achieved, sales would be
subject to the $50 million annual limitation described above; however,
because the MD-80s had an initial appraised value of approximately $24
million as of October 31, 1995, sales of only two such aircraft would be
permitted within the $50 million annual limitation even though the
proceeds would not be expected to be greater than half that amount.
Thus, the annual limitation in practice permits only a few aircraft
sales each year and we have already reached the annual limit for the
fiscal year ending March 31, 2004. This means that we are faced with
costs, including storage, insurance and maintenance, in respect of
aircraft that we can neither lease in the market nor sell in accordance
with the indentures and we are unlikely to be able to recoup those costs
in the future.

The proposed amendment is intended to permit sales of aircraft where
the servicer has concluded that the best economic option for a
particular aircraft is a sale, which sale would likely be precluded
under the indentures as currently in force, because of the limitations
on sales that may be effected below note target price. The proposed
amendments will remove the limitations on price described above and
remove the requirement to comply at the time of any sale with certain
lessee, country and regional limitations under Section 5.03(a) of the
indentures. These limitations were in place to restrict us from selling
aircraft in a manner that the rating agencies at that time believed
could negatively impact their ratings analysis. We agreed to these
restrictions at the time the indentures were executed because, given
the aircraft leasing and sale market at that time and the history of
such market through the date the indentures were executed, these
restrictions were designed to protect the noteholders from the risk of
imprudent sales and sales that were inconsistent with the noteholders
investment. However, we believe, for the reasons discussed above, that
in the current market and in the market predicted for the foreseeable
future, these restrictions now negatively affect and can be expected to
continue to negatively affect the cash flow available to noteholders.

We have identified at least eight aircraft (three DC8-71Fs, two
B737-200As, and a DHC8-100A, a METRO-III and an A300B4-200) which are
potential candidates for sale, having little to no re-lease prospects
and which require expenditure for storage, maintenance and insurance.

The second proposed amendment would allow us to retain flexibility that
may reduce the cost of pursuing our hedging policy. We pursue a hedging
policy, which is approved by the board of directors of Airplanes
Limited and the controlling trustees of Airplanes Trust and the rating
agencies, to manage our interest rate risk, as described more fully in
Item 3. Quantitative and Qualitative Disclosure about Market Risks
below. The indentures require that any swap counterparty (or guarantor
thereof) at the time of entry into a swap transaction have minimum
ratings. These minimum ratings are currently an A-1+ short-term
unsecured debt rating by

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Standard & Poors and an A1 long-term unsecured debt rating by Moodys.
Since these minimum ratings were set, the unsecured debt of many
financial institutions, including some which are existing swap
counterparties, has been downgraded to below these levels. Each class
and sub-class of our certificates has also been downgraded by the
rating agencies, in some cases significantly, see Performance above.
Because the number of eligible counterparties with the requisite
ratings has declined it is now proving difficult to find counterparties
with these ratings willing to enter into swaps with us and it is likely
to be more expensive to enter into swaps if the pool of eligible
counterparties diminishes further. Although swap counterparty credit
risk is reduced by entering into swaps only with counterparties that
have the highest ratings, and reducing this rating requirement could
increase swap counterparty credit risk, this proposed amendment would
be consistent with the original rationale for the required counterparty
ratings, namely to ensure that the swaps did not impose credit risk
greater than the credit risk on the most senior certificates, initially
rated AA, but currently rated between AA- and BB.

Accordingly, the board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust intend to recommend that our
certificateholders and noteholders consent to these proposed
amendments. Under the terms of the indentures, the proposed amendments
require the consent of a majority in outstanding principal amount of
the noteholders, including the Class E noteholders, voting as a single
class. Effectively, this requires the consent of a majority in
outstanding principal amount of the certificateholders and the Class E
noteholders, voting as a single class.

Remarketing

At June 30, 2003, we had 50 aircraft scheduled to be remarketed before
June 30, 2004. These comprise 1 B737-300, 5 B737-200As, 8 DHC8s, 4
MD-83s, 7 DC8s, 2 B767s, 2 A300s, 3 A320s, 1 Metro III, 4 DC9s, 4
ATR42s, 1 B757-200, 6 B737-400s and 2 B737-500s. Furthermore, in
light of existing negotiations with certain lessees, we expect we will
also experience early redeliveries of aircraft prior to their
contractual lease expiries. As a result of the current over supply of
aircraft in the market place, we will experience difficulties in
placing certain of these aircraft. To the extent that we suffer
significant delays in placing these aircraft, we will incur
substantial downtime and new lease rates are also likely to be lower,
and in some cases materially lower, than lease rates currently
applicable.

The Lessees:

Europe

At June 30, 2003 we leased 46 aircraft which represented 31.67% of our
portfolio by appraised value at January 31, 2003 to operators in
Europe.

As of June 30, 2003, the servicer has agreed a restructuring with a
Spanish lessee, representing 3.07% of our portfolio by appraised value
at January 31, 2003, which will result in reduced rentals in return
for lease extensions.

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North America

At June 30, 2003 we leased 22 aircraft representing 16.71% of our
portfolio by appraised value as of January 31, 2003, to operators in
North America.

At June 30, 2003, we leased eight aircraft, representing 9.84% of our
portfolio by appraised value as of January 31, 2003 to one Canadian
lessee. The lessee, which has emerged from protection under the
Companies Creditors Arrangement Act (Canada), resumed making payments
in July 2003. The servicer is in negotiations with the lessee
regarding a restructuring of its leases which may result in a
reduction in lease rentals.

In the three month period ended June 30, 2003 a lessee of one aircraft
representing 0.81% of our portfolio by appraised value as of January
31, 2003 has been experiencing trading difficulties and has been in
discussion with the servicer regarding a potential restructuring of
the lease terms which is likely to result in a lease extension and
rental reduction.

During the year ended March 31, 2003, the servicer has lodged a claim
with the courts in connection with the receivables balance from a U.S.
former lessee of two B737-200A aircraft, representing 0.29% of our
portfolio by appraised value at January 31, 2003.

On August 11, 2002 one former lessee of one aircraft representing
0.17% of our portfolio by appraised value as of January 31, 2003 filed
for protection from its creditors. The aircraft was subsequently
redelivered and the servicer filed a claim with the courts during the
year ended March 31, 2003 for all amounts due.

Latin America

At June 30, 2003, lessees of 47 aircraft with respect to 21.86% of our
portfolio by appraised value as of January 31, 2003 operated in Latin
America, principally Brazil, Mexico, Colombia and Chile. 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
in the aftermath of the current global economic slowdown and the
events of September 11, 2001, which may cause further difficulties for
our lessees.

A Brazilian lessee of three MD-11 aircraft, representing 5.95% of our
portfolio by appraised value as of January 31, 2003, due to trading
difficulties, is currently in arrears. The servicer, following
discussions with the lessee has agreed to the early return of the
aircraft during 2003. The lessee is paying all current amounts as they
fall due.

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A second Brazilian lessee of eight F-100 aircraft representing 2.56%
of our portfolio by appraised value as of January 31, 2003, 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
recently grounded a significant portion of its F-100 fleet but has to
date continued to meet its obligations to us.

At June 30, 2003, a former Brazilian lessee of three B737-500
aircraft, representing 2.10% of our portfolio by appraised value at
January 31, 2003 was in arrears. The servicer agreed to the early
return of the aircraft prior to March 31, 2003, and is currently
pursuing all outstanding amounts.

At June 30, 2003, we leased ten aircraft, representing 6.70% of our
portfolio by appraised value at January 31, 2003 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 June 30, 2003, we leased six aircraft (included above) to one
Colombian lessee, representing 5.02% of our portfolio by appraised
value at January 31, 2003. The lessee is currently in arrears and
the servicer had previously agreed to a 50% deferral of rentals for
three months to be repaid over six months from January 2003. The
lessee has now emerged from chapter 11 bankruptcy protection in the US
and has recommenced making payments. However, the lessee is currently
in discussions with the servicer regarding further lease restructuring
with rental reductions combined with lease extensions being a
potential outcome.

Asia and the Far East

As at June 30, 2003, we leased 32 aircraft representing 16.29% of our
portfolio by appraised value as of January 31, 2003 to 14 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.

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 have
suffered substantial cutbacks in the number of passengers travelling
and seen the cancellation of flights. These factors may adversely
affect the ability of lessees in the region to make payments under
their leases.

Other

At June 30, 2003 we leased 8 aircraft which represented 4.49% of our
portfolio by appraised value as of January 31, 2003, to operators in
countries other than the regions listed above.

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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 2.82% of our portfolio by appraised value as
of January 31, 2003 did not meet the Stage 3 requirements as of March
31, 2003, 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 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

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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 new 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, which could
impact adversely our results of operations.

The FAA issued an AD concerning insulation for the purpose of
increasing fire safety on MD-80 and MD-11 aircraft. At June 30, 2003,
29 aircraft representing 19.40% of the portfolio by appraised value as
of January 31, 2003, were MD-11s and MD-80s. We will incur significant
costs in ensuring these aircraft comply with these standards. It is
estimated that the necessary modification of the 29 aircraft will cost
approximately $13.0 million. To date, we have completed the
modification of twelve aircraft at a cost of $5.7 million. We expect
to complete the modification of a further nine aircraft by March 31,
2004 at an estimated cost of approximately $3.8 million and to modify
the remaining eight aircraft by June 30, 2005 at an estimated cost of
$3.5 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 58 Boeing 737 aircraft, representing 34.99% of
our portfolio by appraised value at January 31, 2003, 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, which could impact adversely our results
of operations.

The FAA has issued an AD affecting all Boeing 737 aircraft, mandating
the installation of a new rudder 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. The
average cost per aircraft of these modifications is expected to be
approximately $184,000 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 58 Boeing 737 aircraft comply
with these modifications, which could impact adversely our results of
operations.

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In light of the events of September 11, 2001, the FAA has 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 before April 2003. Other aviation
authorities are expected to mandate similar requirements before
November 2003. 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 will be 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.

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Results of Operations  Three Months Ended June 30, 2003 Compared with Three Months Ended June 30, 2002.

Airplanes Groups results for the three months ended June 30, 2003
reflected a continuation of the already apparent difficult trading
conditions for the aviation industry. Continued difficult trading
conditions 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 $Nil in cash from operations in the three
months ended June 30, 2003 compared to $41 million in the same period
of the previous year. The decrease in cash generated from operations
in the three month period ended June 30, 2003 is primarily attributable
to a reduction in lease revenues due to an increased level of lease
restructurings, a one time receipt of $18.5 million from one lessee in
compensation for the early redelivery of three DC8 aircraft received in
the three months ended June 30, 2002 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
three months ended June 30, 2003 of $181 million (Airplanes Limited:
$164 million; Airplanes Trust: $17 million) compared to a net loss
after taxation for the three months ended June 30, 2002 of $127 million
(Airplanes Limited: $117 million; Airplanes Trust: $10 million).
Excluding accrued but unpaid class E note interest, the movement from a
profit of $6 million to a loss of $24 million for the three months
ended June 30, 2003 was primarily attributable to a decrease in lease
revenues as discussed below.

Leasing Revenues

Leasing revenues (which include maintenance reserve receipts which we
receive from certain of our lessees) for the three months ended June
30, 2003 were $75 million (Airplanes Limited: $71 million; Airplanes
Trust: $4 million) compared with $109 million (Airplanes Limited: $99
million; Airplanes Trust: $10 million) for the three months ended June
30, 2002. The decrease in 2003 was primarily attributable to a number
of lease restructurings including rental reductions, the number of
aircraft being off lease during the three months ended June 30, 2003
and to the reduction in the number of aircraft on lease in the period
ended June 30, 2003 as a consequence of aircraft sales in previous
periods. At June 30, 2003, we had 155 of our 176 aircraft on lease
(Airplanes Limited: 145 aircraft; Airplanes Trust: 10 aircraft)
compared to 171 of our 183 aircraft on lease (Airplanes Limited: 158
aircraft; Airplanes Trust: 13 aircraft) at June 30, 2002.

Depreciation and Amortization

The charge for depreciation and amortization in the three months ended
June 30, 2003 amounted to $33 million (Airplanes Limited: $31 million;
Airplanes Trust: $2 million) as compared with $36 million (Airplanes
Limited: $34 million; Airplanes Trust: $2 million) for the three months
ended June 30, 2002. The reduction in the charge in the three month
period ended June 30, 2003 resulted primarily from the

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reduced depreciable value of the fleet following the impairment
provisions made in the year ended March 31, 2003 and to a lesser
extent, aircraft sales in previous periods.

Aircraft Sales

Sales proceeds of $1 million (Airplanes Limited: $1 million, Airplanes
Trust: $Nil) in respect of the sale of one DC9-51 and two Metro III
aircraft were received in the three month period ended June 30, 2003.
The net book value of the aircraft sold was $2 million (Airplanes
Limited: $2 million, Airplanes Trust: $Nil). Aircraft sales proceeds of
$4 million (Airplanes Limited: $4 million, Airplanes Trust: $Nil) in
respect of the sale of two B737-200A aircraft and one DC9-51 aircraft
were received in the three months ended June 30, 2002. The net book
value of the aircraft sold was $4 million (Airplanes Limited: $4
million, Airplanes Trust: $Nil) in the period ended June 30, 2002.

Net Interest Expense

Net interest expense was $200 million (Airplanes Limited: $182 million;
Airplanes Trust: $18 million), of which $40 million related to interest
on the class A to D notes and swaps and $160 million related to
interest on the class E notes, in the three month period ended June 30,
2003 compared to $169 million (Airplanes Limited: $154 million;
Airplanes Trust: $15 million), of which $46 million related to interest
on the class A to D notes and swaps and $123 million related to
interest on the class E notes, in the three month period ended June 30,
2002. The increase in the amount of interest charged was primarily due
to additional interest charged on accrued but unpaid class E note
interest of $37 million, partially offset by lower average debt and
interest rates in the three months ended June 30, 2003.

The weighted average interest rate on the class A to D notes during the
three months ended June 30, 2003 was 6.21% and the average debt in
respect of the class A to D notes outstanding during the period was
$2,624 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 months to June 30, 2002 was 6.95% and the average debt in respect
of the class A to D notes outstanding during the period was $2,725
million.

The difference for the three months ended June 30, 2003 in Airplanes
Groups net interest expense of $200 million (Airplanes Limited: $182
million; Airplanes Trust: $18 million) and cash paid in respect of
interest of $39 million (Airplanes Limited: $36 million; Airplanes
Trust: $3 million) is substantially accounted for by the fact that
interest on the class E notes is accrued but unpaid.

Net interest expense is stated after deducting interest income earned
during the relevant period. In the three months ended June 30, 2003,
Airplanes Group earned interest income (including lessee default
interest) of $1 million (Airplanes Limited: $1 million; Airplanes
Trust: $Nil) compared with $1 million in the three months ended June
30, 2002 (Airplanes Limited: $1 million; Airplanes Trust: $Nil).

26



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##### Table of Contents



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 three month
period ended June 30, 2003, 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 provision in respect
of bad and doubtful debts in the three months ended June 30, 2003 of $3
million (Airplanes Limited: $2 million; Airplanes Trust: $1 million)
compared with no net change in provisions for the three months ended
June 30, 2002.

Other Lease Costs

Other lease costs, comprising mainly a transfer to the provision for
maintenance and aircraft related technical expenditure associated with
remarketing the aircraft, in the three months ended June 30, 2003
amounted to $26 million (Airplanes Limited: $25 million; Airplanes
Trust: $1 million) compared with other lease costs of $23 million
(Airplanes Limited: $21 million; Airplanes Trust: $2 million) in the
three months ended June 30, 2002.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period
ended June 30, 2003 amounted to $8 million (Airplanes Limited: $7
million; Airplanes Trust: $1 million). This is a comparable expense to
that incurred in the three months ended June 30, 2002 of $8 million
(Airplanes Limited: $7 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 months ended June 30, 2003 and the
three months ended June 30, 2002 include $6 million (Airplanes Limited:
$6 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 June 30, 2003 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 $2 million (Airplanes Limited: $2 million;
Airplanes Trust $Nil) for the three month period ended June 30, 2002.

27



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Operating Loss

The operating loss for the three months ended June 30, 2003 was $196
million (Airplanes Limited: $177 million; Airplanes Trust: $19 million)
compared with an operating loss of $127 million for the three months
ended June 30, 2002 (Airplanes Limited: $117 million; Airplanes Trust:
$10 million). Airplanes Limited and Airplanes Trust are expected to
continue to report substantial losses in the future.

Taxes

There was a tax benefit in the three months ended June 30, 2003, of $15
million (Airplanes Limited: $13 million; Airplanes Trust: $2 million)
as compared with no tax benefit/ charge for the three months ended June
30, 2002.

Net Loss

The net loss after taxation for the three months ended June 30, 2003
was $181 million (Airplanes Limited: $164 million; Airplanes Trust: $17
million) compared with a net loss after taxation for the three months
ended June 30, 2002 of $127 million (Airplanes Limited: $117 million;
Airplanes Trust: $10 million).

Financial Resources and Liquidity

Commentary on Statement of Cash flows

The factors discussed above at Recent Developments are causing a
significant reduction in our cash flows.

Liquidity

Cash balances at June 30, 2003 amounted to $136 million (Airplanes
Limited: $130 million; Airplanes Trust: $6 million) compared to cash
balances at June 30, 2002 of $161 million (Airplanes Limited: $155
million; Airplanes Trust: $6 million).

Operating Activities

Net cash provided by operating activities in the three months ended
June 30, 2003 amounted to $Nil (Airplanes Limited: $Nil; Airplanes
Trust: $Nil) compared with $41 million in the three months ended June
30, 2002 (Airplanes Limited: $39 million; Airplanes Trust: $2 million).
This includes cash paid in respect of interest of $39 million in the
three months ended June 30, 2003 (Airplanes Limited: $36 million;
Airplanes Trust: $3 million) compared with $47 million in the three
months ended June 30, 2002 (Airplanes Limited: $43 million; Airplanes
Trust: $4 million). The decrease in cash provided by operating
activities in the three month period ended June 30, 2003 is primarily
attributable to a reduction in lease revenues due to lease
restructurings and, to a lesser extent, greater aircraft downtime and
aircraft sales in previous periods.

28



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##### Table of Contents



Investing and Financing Activities

Cash flows provided by investing activities in the three months ended
June 30, 2003 included the receipt of $1 million (Airplanes Limited: $1
million; Airplanes Trust: $Nil) in relation to the sale of one DC9-51
aircraft and two Metro III aircraft. In the three months ended June 30,
2002, cash flows provided by investing activities included the receipt
of $4 million in relation to the sale of two B737-200A aircraft and one
DC9-51 aircraft (Airplanes Limited: $4 million; Airplanes Trust: $Nil).

Cash flows used in financing activities in the three months ended June
30, 2003 primarily reflect the repayment of $6 million of principal on
subclass A-6 notes and class B notes by Airplanes Group (Airplanes
Limited: $5 million; Airplanes Trust: $1 million) compared with $25
million of principal repaid on subclass A-6 notes and class B notes by
Airplanes Group (Airplanes Limited: $23 million; Airplanes Trust: $2
million) in the three months ended June 30, 2002. The decrease in
principal repayments is principally as a result of a decrease in cash
generated as outlined above.

Indebtedness

Airplanes Groups indebtedness consisted of class A to E notes in the
amount of $3,203 million (Airplanes Limited: $2,919 million; Airplanes
Trust: $284 million) at June 30, 2003 and $3,289 million (Airplanes
Limited: $2,997 million; Airplanes Trust: $292 million) at June 30,
2002. Airplanes Groups outstanding publicly traded class A to D notes
amounted to $2,612 million (Airplanes Limited: $2,377 million;
Airplanes Trust: $235million) at June 30, 2003 and $2,698 million
(Airplanes Limited: $2,455 million; Airplanes Trust: $243 million) at
June 30, 2002. Airplanes Group had $591 million class E notes
outstanding at June 30, 2003 and June 30, 2002.

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 cash flows 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-6, subclass A-8 and subclass
A-9 in that order.

29



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##### Table of Contents



Comparison of Actual Cash Flows versus the 2001 Base Case for the Two
Month Period from May 10, 2003 to July 15, 2003.

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, 2003 which is 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 Two 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 June 16,
2003 and July 15, 2003. The financial data in these reports includes
cash receipts from May 10, 2003 (first day of the Calculation Period for
the June 2003 Report) up to July 9, 2003 (last day of the Calculation
Period for the July 2003 Report). Page 41 presents the cumulative
cashflow information from March 2001 to the July 2003 payment date.
This report, however, limits its commentary to the Two Month Period.

The Offering Memorandum dated March 8, 2001 contained assumptions in
respect of Airplanes Groups future cash flows and expenses (the 2001
Base Case). 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 Two Month
Period and should be read in conjunction with the analysis on page 40.

Cash Collections

"Total Cash Collections include Net Lease Rental, Interest Earned,
Aircraft Sales, Net Maintenance and Other Receipts (each as defined
below). In the Two Month Period, Airplanes Group generated
approximately $46.1 million in Total Cash Collections, $20.6 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 39).

30



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##### Table of Contents





|[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 Two Month
Period, the amount of revenue loss attributed to Renegotiated Leases
was $3.6 million, as compared to $Nil assumed in the 2001 Base Case.
This related primarily to renegotiations with three Latin American
lessees, one North American lessee, three European lessees and three
Asian lessees representing 22 aircraft in total on lease to these
lessees at June 30, 2003 and 14.2% of our portfolio by appraised
value at January 31, 2003 respectively.

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 $17.3 million in
the Two 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 DC9-51 aircraft, one DC9-32
aircraft, one DC8-71F aircraft, two B727-200A aircraft, two
B737-200A aircraft and two Metro-III aircraft have been sold prior
to their assumed sale date in the 2001 Base Case, resulting in a
negative variance of $1.1 million in lease rentals compared to the
2001 Base Case in the Two Month Period. Lease rentals totaling $0.4
million were received in the Two Month Period in respect of four
DC9-32 aircraft which have remained on lease after their assumed
sale date in the 2001 Base Case.

31



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##### Table of Contents





|[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 Two Month Period, Contracted
Lease Rentals were $48.2 million, which was $21.6 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.                                                                         
|   
|[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 $1.6 million in
the Current Arrears balance over the Two 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 Two Month Period.
Net Stress-Related Costs incurred in the Two Month Period amounted
to a net cash outflow of $7.2 million (10.3% of Lease Rentals)
compared to $4.2 million outflow assumed in the 2001 Base Case, a
variance of $3.0 million that is due to the five factors described
in items [8] to [12] below.
|   
|[8] |  | Bad Debts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Bad Debtsare arrears owed by lessees which have defaulted and
which are deemed irrecoverable. Bad Debts were $Nil for the Two
Month Period as compared to the 2001 Base Case assumption of $0.7
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 Two
Month Period, Airplanes Group received payments totaling $0.1
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 Two Month Period.                                                                                                                                                                                        

32



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##### Table of Contents





|[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 twenty-six aircraft AOG at various times during the Two
Month Period and at June 30, 2003, twenty-one aircraft were AOG,
three of which were subject to a letter of intent for lease. In the
Two Month Period, the 2001 Base Case Lease Rentals loss attributed
to AOG was $7.4 million (10.6% of Lease Rentals), as compared to
$2.9 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 Two Month Period, Other Leasing Income
amounted to $0.1 million, as compared to $Nil assumed under the 2001
Base Case.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|[12] |  | Repossession Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | Repossession Costscover legal and aircraft technical costs
incurred as a result of repossessing an aircraft. In the Two Month
Period, Repossession Costs amounted to $Nil, as compared to $0.6
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 Two
Month Period, Net Lease Rental amounted to $42.6 million, $23.0
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 of $80 million
plus the security deposit amount, 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 Two Month Period, Interest Earned
amounted to $0.3 million, $0.8 million less than that assumed in the
2001 Base Case. The difference is due to a lower average
reinvestment rate than assumed in the 2001 Base Case. The average
actual reinvestment rate for the Two Month Period was 1.1%
(excluding a $5 million guaranteed investment contract) as compared
to the 5.2% assumed in the 2001 Base Case.

33



---



##### Table of Contents





|[16] |  | Aircraft Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | Aircraft sales proceeds totaling $0.4 million were received in the
Two Month Period in respect of the sale of two Metro-III aircraft.
In the 2001 Base Case, aircraft sales proceeds were assumed to be
$Nil for the Two 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 after the end of its useful economic life, on the
contracted lease expiry date.
|    
|[17] |  | Net Maintenance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|     |  | Net Maintenancerefers to maintenance reserve revenue received
less any maintenance reimbursements paid to lessees. In the Two
Month Period, positive net maintenance cashflows of $2.8 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 Two Month Period,
Total Cash Expenses were $13.8 million compared to $9.0 million assumed
in the 2001 Base Case, a negative variance of $4.8 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
Two Month Period, these costs amounted to $7.6 million (or 10.9% of
Lease Rentals) compared to $3.5 million (or 5.0% of Lease Rentals)
assumed in the 2001 Base Case. Actual Re-Leasing and Other Overhead
Costs were higher than the 2001 Base Case assumption primarily due
to higher than assumed transition costs on aircraft delivering to
new lessees and higher payments made in the form of lessor
contributions to defray certain technical costs during the term of
certain leases.

34



---



##### Table of Contents





|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 Two
Month Period, the total Aircraft Servicer Fees paid were $3.9
million, as compared to $3.9 million assumed in the 2001 Base Case.
|     
|      |  | Aircraft Servicer Fees consist of:                                                                                                                                                                                                                                       

|                                  |  |    |     | 
|--------------------------------- |  | -- | --- | 
|                                  |  | $M
|                                  |  |   
|Retainer Fee                      |  |    | 3.9 | 
|Minimum Incentive Fee             |  |    | 0.0 | 
|Core Cashflow/Sales Incentive Fee |  |    | 0.0 | 
|                                  |  |    |     | 
|Total Aircraft Servicer Fee       |  |    | 3.9 | 
|                                  |  |    |     | 



|      |  | The Retainer Fee is a fixed amount per month per aircraft and
changes only as aircraft are sold.                                                                                                                                                                                                                                                                                                                                    
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|[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 Two Month Period, Other Servicer Fees and Other Overheads
amounted to $2.3 million, $0.7 million more than an assumed expense
of $1.6 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 cash
flows, in an amount equal to the sum of:                                                                                                                                                                                                                                                           



| |  | - the maintenance reserve amount ($80 million); and
| |  | ---------------------------------------------------
|
| |  | - a security deposit reserve amount.               



| |  | Under the schedule of required payment priorities 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) Section 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 liquidity
reserve amount under the schedule of required payment

35



---



##### Table of Contents





|     |  | priorities applicable to Airplanes Group. On the July 15, 2003
payment date, there was a shortfall in the liquidity reserve amount
of $0.6 million as compared to a shortfall of $2.1 million on the
May 15, 2003 payment date, representing an overall reduction of
$1.5 million in the Shortfall in Liquidity Reserve for the Two
Month Period. Under the 2001 Base Case, a Shortfall in Liquidity
Reserve was not anticipated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|[30] |  | Interest Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|     |  | In the Two Month Period, interest payments to the holders of the
class A, B, C and D notes amounted to $17.4 million which is $11.5
million lower than assumed under the 2001 Base Case. The variance
reflects a lower than expected level of average interest rates on
the floating rate class A and B notes, the impact of which was
partly offset by a higher principal balance outstanding on the
subclass A-6 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 Two Month Period was 1.2%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|     |  | In the Two 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 has begun 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 schedule of required
payment priorities 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 cash flows have not been
sufficient to allow payment of step-up interest on any of the
payment dates since March of this year 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 July 15, 2003 was $1.2 million.
|    
|[31] |  | Swap and Swaption Cashflows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|     |  | Airplanes Groups net swap payments during the Two Month Period
were $8.0 million higher than the $0.8 million assumed in the 2001
Base Case due to lower than anticipated interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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##### Table of Contents





|[33] |  | Principal Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | In the twenty-eight month period from March 10, 2001 to July 15,
2003, total principal payments amounted to $299.5 million,
(comprising $254.9 million on the class A notes and $44.6 million
on the class B notes), $123.7 million less than assumed in the 2001
Base Case. The breakdown of the $123.7 million variance is set out
on page 41. In the Two Month Period, total principal payments
amounted to $3.6 million, (comprising $3.6 million on the class B
notes), $24.4 million less than assumed in the 2001 Base Case. The
breakdown of the $24.4 million variance is set out on page 40.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|     |  | 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
$2,961.5 million at July 15, 2003. Our portfolio is appraised
annually and the most recent appraisal was obtained on January 31,
2003 and valued the current portfolio at $2,419.7 million. Applying
the declining value assumptions to this appraisal, the total
appraised value was $2,342.0 million at July 15, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|     |  | As a consequence of the cumulative excess decline in appraised
values experienced since March 1996, combined with overall cash
performance in that period, Airplanes Groups available cashflows
after payment of expenses, interest and class A and B minimum
principal amounts, have been redirected in accordance with the
priority of payments to pay class A principal adjustment amount
throughout the twenty-eight month period since the 2001 refinancing.
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 principal adjustment amount on the class A notes ranks ahead of
the scheduled principal payments on the class C and D notes, and
since available cash flows 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 twenty-eight month period. Total deferrals of class C and
class D scheduled principal amounts amounted to $61.0 million and
$36.2 million respectively as of July 15, 2003. The class A
principal adjustment amount outstanding was $336.0 million as of
July 15, 2003.
|    
|     |  | There has been a decline of 12.66% in the appraised value of our
fleet in the year to January 31, 2003, which is $170 million greater
than the decline assumed in our 2001 Base Case assumptions. 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 appraised value upon sale of any aircraft,
since we might sell at a low point in the business cycle and since                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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| |  | appraised values are forward-looking. 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.                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 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 Item 2. Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Recent Developments  Performance.

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|                      |  |                                                |  |                                                                                                                                                                                                    
|--------------------- |  | ---------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 Sales               |  | Revenue foregone on aircraft sold prior to their assumed sale 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]sum of[1]...[4]    |  | Contracted Lease Rentals                       |  | Current Contracted Lease Rentals due as at the latest Calculation Date                                                                                                                             
|[6]                   |  | Movement in Current Arrears
Balance            |  | Current Contracted Lease Rentals not received as at the latest
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 payments, rental guarantees and late
payments charges                                                                                                                   
|[12]                  |  | - Repossession                                 |  | Legal and technical costs incurred in repossessing aircraft.                                                                                                                                       
|[13]sum of[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]sum of[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...
SG&A Expenses |  | Costs associated with transferring an aircraft from one lessee to
another, costs of insurance and other lessee-related overheads                                                                   
|                      |  |                                                |  |                                                                                                                                                                                                    
|[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
Fee            |  | Fees (in excess of Minimum Incentive Fee above) paid to servicer for
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 other                                                                                                                                  
|                      |  | Overheads                                      |  | 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                                                                             
|[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]sum of[26]...[31] |  | Total                                          |  |                                                                                                                                                                                                    
|                      |  |                                                |  |                                                                                                                                                                                                    
|[33]                  |  | PRINCIPAL PAYMENTS                             |  | Principal payments on debt                                                                                                                                                                         

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Airplanes Group Cash Flow Performance for the Period from May 10, 2003 to July 15, 2003 (2 Months)

Comparison of Actual Cash Flows versus 2001 Base Case Cash Flows

| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | --- |  |  |  | -------------- |  |  | --------------------------------------- |  | ------ | ------- | --------- |  | -------- | ------- | ------ |  | --------- | ----- | ------------------------------------------ |  |  | ----- | ---- |  |  | ----- | -- |  |  | ----- | --
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       | % of Lease Rentals underthe 2001 Base Code
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  | 2001     |         |        |  |           |       |                                            |  |  |       | 2001 |  |  |       |   
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |   
| |     |  |  |  |                |  |  |                                         |  | Actual |         | Base Case |  | Variance |         | Actual |  | Base Case |       | Variance                                  
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                           
| |     |  |  |  |                |  |  | CASH COLLECTIONS                        |  | $M     |         |           |  | $M       |         |        |  | $M        |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 1   |  |  |  |                |  |  | Lease Rentals                           |  |        | 69.8    |           |  |          | 69.8    |        |  |           | 0.0   |                                            |  |  | 100.0 | %    |  |  | 100.0 | %  |  |  | 0.0   | % 
| | 2   |  |  |  |                |  |  | - Renegotiated Leases                   |  |        | (3.6    | )         |  |          | 0.0     |        |  |           | (3.6  | )                                          |  |  | (5.2  | %)   |  |  | 0.0   | %  |  |  | (5.2  | %)
| | 3   |  |  |  |                |  |  | - Rental Resets                         |  |        | (17.3   | )         |  |          | 0.0     |        |  |           | (17.3 | )                                          |  |  | (24.8 | %)   |  |  | 0.0   | %  |  |  | (24.8 | %)
| | 4   |  |  |  |                |  |  | - Lease Rentals  Aircraft Sales        |  |        | (0.7    | )         |  |          | 0.0     |        |  |           | (0.7  | )                                          |  |  | (1.0  | %)   |  |  | 0.0   | %  |  |  | (1.0  | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 5   |  |  |  | sum of 1 - 4   |  |  | Contracted Lease Rentals                |  |        | 48.2    |           |  |          | 69.8    |        |  |           | (21.6 | )                                          |  |  | 69.1  | %    |  |  | 100.0 | %  |  |  | (30.9 | %)
| | 6   |  |  |  |                |  |  | Movement in Current Arrears Balance     |  |        | 1.6     |           |  |          | 0.0     |        |  |           | 1.6   |                                            |  |  | 2.3   | %    |  |  | 0.0   | %  |  |  | 2.3   | % 
| | 7   |  |  |  |                |  |  | less Net Stress Related Costs           |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 8   |  |  |  |                |  |  | - Bad Debts                             |  |        | 0.0     |           |  |          | (0.7    | )      |  |           | 0.7   |                                            |  |  | 0.0   | %    |  |  | (1.0  | %) |  |  | 1.0   | % 
| | 9   |  |  |  |                |  |  | - Deferred Arrears Balance              |  |        | 0.1     |           |  |          | 0.0     |        |  |           | 0.1   |                                            |  |  | 0.1   | %    |  |  | 0.0   | %  |  |  | 0.1   | % 
| | 10  |  |  |  |                |  |  | - AOG                                   |  |        | (7.4    | )         |  |          | (2.9    | )      |  |           | (4.5  | )                                          |  |  | (10.6 | %)   |  |  | (4.2  | %) |  |  | (6.4  | %)
| | 11  |  |  |  |                |  |  | - Other Leasing Income                  |  |        | 0.1     |           |  |          | 0.0     |        |  |           | 0.1   |                                            |  |  | 0.1   | %    |  |  | 0.0   | %  |  |  | 0.1   | % 
| | 12  |  |  |  |                |  |  | - Repossession                          |  |        | 0.0     |           |  |          | (0.6    | )      |  |           | 0.6   |                                            |  |  | 0.0   | %    |  |  | (0.8  | %) |  |  | 0.9   | % 
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 13  |  |  |  | sum of 8 - 12  |  |  | Sub-total                               |  |        | (7.2    | )         |  |          | (4.2    | )      |  |           | (3.0  | )                                          |  |  | (10.3 | %)   |  |  | (6.0  | %) |  |  | (4.3  | %)
| | 14  |  |  |  | 5+6+13         |  |  | Net Lease Rental                        |  |        | 42.6    |           |  |          | 65.6    |        |  |           | (23.0 | )                                          |  |  | 61.0  | %    |  |  | 94.0  | %  |  |  | (33.0 | %)
| | 15  |  |  |  |                |  |  | Interest Earned                         |  |        | 0.3     |           |  |          | 1.1     |        |  |           | (0.8  | )                                          |  |  | 0.4   | %    |  |  | 1.6   | %  |  |  | (1.1  | %)
| | 16  |  |  |  |                |  |  | Aircraft Sales                          |  |        | 0.4     |           |  |          | 0.0     |        |  |           | 0.4   |                                            |  |  | 0.6   | %    |  |  | 0.0   | %  |  |  | 0.6   | % 
| | 17  |  |  |  |                |  |  | Net Maintenance                         |  |        | 2.8     |           |  |          | 0.0     |        |  |           | 2.8   |                                            |  |  | 4.0   | %    |  |  | 0.0   | %  |  |  | 4.0   | % 
| | 18  |  |  |  |                |  |  | Other Receipts                          |  |        | 0.0     |           |  |          | 0.0     |        |  |           | 0.0   |                                            |  |  | 0.0   | %    |  |  | 0.0   | %  |  |  | 0.0   | % 
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 19  |  |  |  | sum of 14 - 18 |  |  | Total Cash Collections                  |  |        | 46.1    |           |  |          | 66.7    |        |  |           | (20.6 | )                                          |  |  | 66.0  | %    |  |  | 95.6  | %  |  |  | (29.5 | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | CASH EXPENSES                           |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Aircraft Operating Expenses             |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 20  |  |  |  |                |  |  | - Re-leasing and other overheads        |  |        | (7.6    | )         |  |          | (3.5    | )      |  |           | (4.1  | )                                          |  |  | (10.9 | %)   |  |  | (5.0  | %) |  |  | (5.9  | %)
| |     |  |  |  |                |  |  | SG&A Expenses                           |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 21  |  |  |  |                |  |  | Aircraft Servicer Fees                  |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | - Retainer Fee                          |  |        | (3.9    | )         |  |          | (3.6    | )      |  |           | (0.3  | )                                          |  |  | (5.6  | %)   |  |  | (5.2  | %) |  |  | (0.4  | %)
| |     |  |  |  |                |  |  | - Minimum Incentive Fee                 |  |        | 0.0     |           |  |          | (0.3    | )      |  |           | 0.3   |                                            |  |  | 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                               |  |        | (3.9    | )         |  |          | (3.9    | )      |  |           | 0.0   |                                            |  |  | (5.6  | %)   |  |  | (5.6  | %) |  |  | 0.0   | % 
| | 23  |  |  |  |                |  |  | Other Servicer Fees and Other Overheads |  |        | (2.3    | )         |  |          | (1.6    | )      |  |           | (0.7  | )                                          |  |  | (3.3  | %)   |  |  | (2.3  | %) |  |  | (1.0  | %)
| | 23A |  |  |  |                |  |  | Other SG&A Expenses                     |  |        | 0.0     |           |  |          | 0.0     |        |  |           | 0.0   |                                            |  |  | 0.0   | %    |  |  | 0.0   | %  |  |  | 0.0   | % 
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 24  |  |  |  | 22+23+23A      |  |  | Sub-total                               |  |        | (6.2    | )         |  |          | (5.5    | )      |  |           | (0.7  | )                                          |  |  | (8.9  | %)   |  |  | (7.9  | %) |  |  | (1.0  | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 25  |  |  |  | 24+20          |  |  | Total Cash Expenses                     |  |        | (13.8   | )         |  |          | (9.0    | )      |  |           | (4.8  | )                                          |  |  | (19.8 | %)   |  |  | (12.9 | %) |  |  | (6.9  | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | NET CASH COLLECTIONS                    |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 26  |  |  |  | 19             |  |  | Total Cash Collections                  |  |        | 46.1    |           |  |          | 66.7    |        |  |           | (20.6 | )                                          |  |  | 66.0  | %    |  |  | 95.6  | %  |  |  | (29.5 | %)
| | 27  |  |  |  | 25             |  |  | Total Cash Expenses                     |  |        | (13.8   | )         |  |          | (9.0    | )      |  |           | (4.8  | )                                          |  |  | (19.8 | %)   |  |  | (12.9 | %) |  |  | (6.9  | %)
| | 28  |  |  |  |                |  |  | Movement in Expense Account             |  |        | (1.0    | )         |  |          | 0.0     |        |  |           | (1.0  | )                                          |  |  | (1.4  | %)   |  |  | 0.0   | %  |  |  | (1.4  | %)
| | 29  |  |  |  |                |  |  | Reduction in Liquidity Reserve          |  |        | 0.0     |           |  |          | 0.0     |        |  |           | 0.0   |                                            |  |  | 0.0   | %    |  |  | 0.0   | %  |  |  | 0.0   | % 
| | 29A |  |  |  |                |  |  | Shortfall in Liquidity Reserve          |  |        | (1.5    | )         |  |          | 0.0     |        |  |           | (1.5  | )                                          |  |  | (2.1  | %)   |  |  | 0.0   | %  |  |  | (2.1  | %)
| | 30  |  |  |  |                |  |  | Interest Payments                       |  |        | (17.4   | )         |  |          | (28.9   | )      |  |           | 11.5  |                                            |  |  | (24.9 | %)   |  |  | (41.4 | %) |  |  | 16.5  | % 
| | 31  |  |  |  |                |  |  | Swap Payments                           |  |        | (8.8    | )         |  |          | (0.8    | )      |  |           | (8.0  | )                                          |  |  | (12.6 | %)   |  |  | (1.1  | %) |  |  | (11.5 | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 32  |  |  |  | sum of 26 - 31 |  |  | TOTAL                                   |  |        | 3.6     |           |  |          | 28.0    |        |  |           | (24.4 | )                                          |  |  | 5.2   | %    |  |  | 40.1  | %  |  |  | (34.9 | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| | 33  |  |  |  |                |  |  | PRINCIPAL PAYMENTS                      |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Subclass A-6                            |  |        | 0.0     |           |  |          | 24.5    |        |  |           | (24.5 | )                                          |  |  | 0.0   | %    |  |  | 35.1  | %  |  |  | (35.1 | %)
| |     |  |  |  |                |  |  | Class B                                 |  |        | 3.6     |           |  |          | 3.5     |        |  |           | 0.1   |                                            |  |  | 5.2   | %    |  |  | 5.0   | %  |  |  | 0.2   | % 
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Total                                   |  |        | 3.6     |           |  |          | 28.0    |        |  |           | (24.4 | )                                          |  |  | 5.2   | %    |  |  | 40.1  | %  |  |  | (34.9 | %)
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Debt Balances at July 15, 2003          |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Subclass A-6                            |  |        | 190.5   |           |  |          | 65.2    |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Subclass A-8                            |  |        | 700.0   |           |  |          | 700.0   |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Subclass A-9                            |  |        | 750.0   |           |  |          | 750.0   |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Class B                                 |  |        | 233.7   |           |  |          | 235.3   |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Class C                                 |  |        | 349.8   |           |  |          | 349.8   |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  | Class D                                 |  |        | 395.1   |           |  |          | 395.1   |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  |                                         |  |        | 2,619.1 |           |  |          | 2,495.4 |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   
| |     |  |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |       |                                            |  |  |       |      |  |  |       |    |  |  |       |   

40



---



##### Table of Contents



Airplanes Group Cash Flow Performance for the Period from March 10, 2001 to July 15, 2003 (28 Months)

Comparison of Actual Cash Flows versus 2001 Base Case Cash Flows

| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | --- | - |  |  | -------------- |  |  | --------------------------------------- |  | ------ | ------- | --------- |  | -------- | ------- | ------ |  | --------- | ------ | -------- |  | ------------------------ | ----- | ---- |  |  | ----- | -- |  |  | ----- | --
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  | % of Lease Rentals under
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  | the 2001 Base Case      
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                         
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  | 2001     |         |        |  |           |        |          |  |                          |       | 2001 |  |  |       |   
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |   
| |     |   |  |  |                |  |  |                                         |  | Actual |         | Base Case |  | Variance |         | Actual |  | Base Case |        | Variance
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |         
| |     |   |  |  |                |  |  | CASH COLLECTIONS                        |  | $      | M       |           |  | $        | M       |        |  | $         | M      |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 1   |   |  |  |                |  |  | Lease Rentals                           |  |        | 983.7   |           |  |          | 983.7   |        |  |           | 0.0    |          |  |                          | 100.0 | %    |  |  | 100.0 | %  |  |  | 0.0   | % 
| | 2   |   |  |  |                |  |  | - Renegotiated Leases                   |  |        | (65.8   | )         |  |          | 0.0     |        |  |           | (65.8  | )        |  |                          | (6.7  | %)   |  |  | 0.0   | %  |  |  | (6.7  | %)
| | 3   |   |  |  |                |  |  | - Rental Resets                         |  |        | (125.7  | )         |  |          | 0.0     |        |  |           | (125.7 | )        |  |                          | (12.8 | %)   |  |  | 0.0   | %  |  |  | (12.8 | %)
| | 4   |   |  |  |                |  |  | - Lease Rentals  Aircraft Sales        |  |        | (5.7    | )         |  |          | 0.0     |        |  |           | (5.7   | )        |  |                          | (0.6  | %)   |  |  | 0.0   | %  |  |  | (0.6  | %)
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 5   |   |  |  | sum of 1 - 4   |  |  | Contracted Lease Rentals                |  |        | 786.5   |           |  |          | 983.7   |        |  |           | (197.2 | )        |  |                          | 80.0  | %    |  |  | 100.0 | %  |  |  | (20.0 | %)
| | 6   |   |  |  |                |  |  | Movement in Current Arrears Balance     |  |        | (5.2    | )         |  |          | 0.0     |        |  |           | (5.2   | )        |  |                          | (0.5  | %)   |  |  | 0.0   | %  |  |  | (0.5  | %)
| | 7   |   |  |  |                |  |  | less Net Stress Related Costs           |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 8   |   |  |  |                |  |  | - Bad Debts                             |  |        | (8.2    | )         |  |          | (9.9    | )      |  |           | 1.7    |          |  |                          | (0.8  | %)   |  |  | (1.0  | %) |  |  | 0.2   | % 
| | 9   |   |  |  |                |  |  | - Deferred Arrears Balance              |  |        | 6.8     |           |  |          | 3.1     |        |  |           | 3.7    |          |  |                          | 0.7   | %    |  |  | 0.3   | %  |  |  | 0.4   | % 
| | 10  |   |  |  |                |  |  | - AOG                                   |  |        | (59.3   | )         |  |          | (41.4   | )      |  |           | (17.9  | )        |  |                          | (6.0  | %)   |  |  | (4.2  | %) |  |  | (1.8  | %)
| | 11  |   |  |  |                |  |  | - Other Leasing Income                  |  |        | 11.9    |           |  |          | 0.0     |        |  |           | 11.9   |          |  |                          | 1.2   | %    |  |  | 0.0   | %  |  |  | 1.2   | % 
| | 12  |   |  |  |                |  |  | - Repossession                          |  |        | (4.1    | )         |  |          | (7.9    | )      |  |           | 3.8    |          |  |                          | (0.4  | %)   |  |  | (0.8  | %) |  |  | 0.4   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 13  |   |  |  | sum of 8 - 12  |  |  | Sub-total                               |  |        | (52.9   | )         |  |          | (56.1   | )      |  |           | 3.2    |          |  |                          | (5.4  | %)   |  |  | (5.7  | %) |  |  | 0.3   | % 
| | 14  |   |  |  | 5+6+13         |  |  | Net Lease Rental                        |  |        | 728.4   |           |  |          | 927.6   |        |  |           | (199.2 | )        |  |                          | 74.0  | %    |  |  | 94.3  | %  |  |  | (20.3 | %)
| | 15  |   |  |  |                |  |  | Interest Earned                         |  |        | 8.6     |           |  |          | 16.2    |        |  |           | (7.6   | )        |  |                          | 0.9   | %    |  |  | 1.6   | %  |  |  | (0.8  | %)
| | 16  |   |  |  |                |  |  | Aircraft Sales                          |  |        | 28.7    |           |  |          | 29.3    |        |  |           | (0.6   | )        |  |                          | 2.9   | %    |  |  | 3.0   | %  |  |  | (0.1  | %)
| | 17  |   |  |  |                |  |  | Net Maintenance                         |  |        | 42.1    |           |  |          | 0.0     |        |  |           | 42.1   |          |  |                          | 4.3   | %    |  |  | 0.0   | %  |  |  | 4.3   | % 
| | 18  |   |  |  |                |  |  | Other Receipts                          |  |        | 8.3     |           |  |          | 0.0     |        |  |           | 8.3    |          |  |                          | 0.8   | %    |  |  | 0.0   | %  |  |  | 0.8   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 19  |   |  |  | sum of 14 - 18 |  |  | Total Cash Collections                  |  |        | 816.1   |           |  |          | 973.1   |        |  |           | (157.0 | )        |  |                          | 83.0  | %    |  |  | 98.9  | %  |  |  | (16.0 | %)
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | CASH EXPENSES                           |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Aircraft Operating Expenses             |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 20  |   |  |  |                |  |  | - Re-leasing and other overheads        |  |        | (50.3   | )         |  |          | (49.3   | )      |  |           | (1.0   | )        |  |                          | (5.1  | %)   |  |  | (5.0  | %) |  |  | (0.1  | %)
| |     |   |  |  |                |  |  | SG&A Expenses                           |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 21  |   |  |  |                |  |  | Aircraft Servicer Fees                  |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | - Retainer Fee                          |  |        | (51.9   | )         |  |          | (52.2   | )      |  |           | 0.3    |          |  |                          | (5.3  | %)   |  |  | (5.3  | %) |  |  | 0.0   | % 
| |     |   |  |  |                |  |  | - Minimum Incentive Fee                 |  |        | (4.5    | )         |  |          | (3.5    | )      |  |           | (1.0   | )        |  |                          | (0.5  | %)   |  |  | (0.4  | %) |  |  | (0.1  | %)
| |     |   |  |  |                |  |  | - Core Cashflow/Sales Incentive Fee     |  |        | (0.2    | )         |  |          | 0.0     |        |  |           | (0.2   | )        |  |                          | 0.0   | %    |  |  | 0.0   | %  |  |  | 0.0   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 22  |   |  |  | 21             |  |  | Sub-total                               |  |        | (56.6   | )         |  |          | (55.7   | )      |  |           | (0.9   | )        |  |                          | (5.8  | %)   |  |  | (5.7  | %) |  |  | (0.1  | %)
| | 23  |   |  |  |                |  |  | Other Servicer Fees and Other Overheads |  |        | (26.2   | )         |  |          | (24.1   | )      |  |           | (2.1   | )        |  |                          | (2.7  | %)   |  |  | (2.4  | %) |  |  | (0.2  | %)
| | 23A |   |  |  |                |  |  | Other SG&A Expenses                     |  |        | 0.0     |           |  |          | (4.7    | )      |  |           | 4.7    |          |  |                          | 0.0   | %    |  |  | (0.5  | %) |  |  | 0.5   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 24  |   |  |  | 22+23+23A      |  |  | Sub-total                               |  |        | (82.8   | )         |  |          | (84.5   | )      |  |           | 1.7    |          |  |                          | (8.4  | %)   |  |  | (8.6  | %) |  |  | 0.2   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 25  |   |  |  | 24+20          |  |  | Total Cash Expenses                     |  |        | (133.1  | )         |  |          | (133.8  | )      |  |           | 0.7    |          |  |                          | (13.5 | %)   |  |  | (13.6 | %) |  |  | 0.1   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | NET CASH COLLECTIONS                    |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 26  |   |  |  | 19             |  |  | Total Cash Collections                  |  |        | 816.1   |           |  |          | 973.1   |        |  |           | (157.0 | )        |  |                          | 83.0  | %    |  |  | 98.9  | %  |  |  | (16.0 | %)
| | 27  |   |  |  | 25             |  |  | Total Cash Expenses                     |  |        | (133.1  | )         |  |          | (133.8  | )      |  |           | 0.7    |          |  |                          | (13.5 | %)   |  |  | (13.6 | %) |  |  | 0.1   | % 
| | 28  |   |  |  |                |  |  | Movement in Expense Account             |  |        | (6.5    | )         |  |          | 0.0     |        |  |           | (6.5   | )        |  |                          | (0.7  | %)   |  |  | 0.0   | %  |  |  | (0.7  | %)
| | 29  |   |  |  |                |  |  | Reduction in Liquidity Reserve          |  |        | 40.0    |           |  |          | 40.0    |        |  |           | 0.0    |          |  |                          | 4.1   | %    |  |  | 4.1   | %  |  |  | 0.0   | % 
| | 29A |   |  |  |                |  |  | Shortfall in Liquidity Reserve          |  |        | 0.6     |           |  |          | 0.0     |        |  |           | 0.6    |          |  |                          | 0.1   | %    |  |  | 0.0   | %  |  |  | 0.1   | % 
| | 30  |   |  |  |                |  |  | Interest Payments                       |  |        | (300.2  | )         |  |          | (429.9  | )      |  |           | 129.7  |          |  |                          | (30.5 | %)   |  |  | (43.7 | %) |  |  | 13.2  | % 
| | 5.1 | % |  |  |                |  |  | Swap Payments                           |  |        | (117.4  | )         |  |          | (26.2   | )      |  |           | (91.2  | )        |  |                          | (11.9 | %)   |  |  | (2.7  | %) |  |  | (9.3  | %)
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 32  |   |  |  | sum of 26 - 31 |  |  | TOTAL                                   |  |        | 299.5   |           |  |          | 423.2   |        |  |           | (123.7 | )        |  |                          | 30.4  | %    |  |  | 43.0  | %  |  |  | (12.6 | %)
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| | 33  |   |  |  |                |  |  | PRINCIPAL PAYMENTS                      |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Subclass A-6                            |  |        | 254.9   |           |  |          | 380.2   |        |  |           | (125.3 | )        |  |                          | 25.9  | %    |  |  | 38.6  | %  |  |  | (12.7 | %)
| |     |   |  |  |                |  |  | Class B                                 |  |        | 44.6    |           |  |          | 43.0    |        |  |           | 1.6    |          |  |                          | 4.5   | %    |  |  | 4.4   | %  |  |  | 0.2   | % 
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Total                                   |  |        | 299.5   |           |  |          | 423.2   |        |  |           | (123.7 | )        |  |                          | 30.4  | %    |  |  | 43.0  | %  |  |  | (12.6 | %)
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Debt Balances at July 15, 2003          |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Subclass A-6                            |  |        | 190.5   |           |  |          | 65.2    |        |  |           | 125.3  |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Subclass A-8                            |  |        | 700.0   |           |  |          | 700.0   |        |  |           | 0.0    |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Subclass A-9                            |  |        | 750.0   |           |  |          | 750.0   |        |  |           | 0.0    |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Class B                                 |  |        | 233.7   |           |  |          | 235.3   |        |  |           | (1.6   | )        |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Class C                                 |  |        | 349.8   |           |  |          | 349.8   |        |  |           | 0.0    |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  | Class D                                 |  |        | 395.1   |           |  |          | 395.1   |        |  |           | 0.0    |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  |                                         |  |        | 2,619.1 |           |  |          | 2,495.4 |        |  |           | 123.7  |          |  |                          |       |      |  |  |       |    |  |  |       |   
| |     |   |  |  |                |  |  |                                         |  |        |         |           |  |          |         |        |  |           |        |          |  |                          |       |      |  |  |       |    |  |  |       |   

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| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| | --- |  |  | -------------------------------------- |  | ------- | ------- | ------ |  | --------- | ------- | ---- |  |  | ------- |  |  |  | ------------------------- | 
| |     |  |  |                                        |  | Mar-01  |         |        |  |           |         | 2001 |  |  |         | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         | 
| |     |  |  |                                        |  | Closing |         | Actual |  | Base Case |         |      |  | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  | 
| |     |  |  |                                        |  | $m      |         | $m     |  | $m        |         |      |  | 
| |     |  |  | Net Cash Collections                   |  |         |         |        |  |           | 299.5   |      |  |  | 423.2   |  |  |  |                           | 
| |     |  |  | Add Back Interest and Swap Payments    |  |         |         |        |  |           | 417.6   |      |  |  | 456.1   |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| | a   |  |  | Net Cash Collections                   |  |         |         |        |  |           | 717.1   |      |  |  | 879.3   |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | (excl. interest and swap payments)     |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| | b   |  |  | Swaps                                  |  |         |         |        |  |           | 117.4   |      |  |  | 26.2    |  |  |  |                           | 
| | c   |  |  | Class A Interest                       |  |         |         |        |  |           | 114.4   |      |  |  | 226.7   |  |  |  |                           | 
| | d   |  |  | Class A Minimum                        |  |         |         |        |  |           | 0.0     |      |  |  | 0.0     |  |  |  |                           | 
| | e   |  |  | Class B Interest                       |  |         |         |        |  |           | 19.0    |      |  |  | 36.4    |  |  |  |                           | 
| | f   |  |  | Class B Minimum                        |  |         |         |        |  |           | 44.6    |      |  |  | 43.0    |  |  |  |                           | 
| | g   |  |  | Class C Interest                       |  |         |         |        |  |           | 66.5    |      |  |  | 66.5    |  |  |  |                           | 
| | h   |  |  | Class D Interest                       |  |         |         |        |  |           | 100.3   |      |  |  | 100.3   |  |  |  |                           | 
| | i   |  |  | Class A Principal Adjustment           |  |         |         |        |  |           | 254.9   |      |  |  | 380.2   |  |  |  |                           | 
| | 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                                  |  |         |         |        |  |           | 717.1   |      |  |  | 879.3   |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| | [1] |  |  | Interest Coverage Ratio                |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | Class A                                |  |         |         |        |  |           | 3.1     |      |  |  | 3.5     |  |  |  | =a/(b+c)                  | 
| |     |  |  | Class B                                |  |         |         |        |  |           | 2.9     |      |  |  | 3.0     |  |  |  | =a/(b+c+d+e)              | 
| |     |  |  | Class C                                |  |         |         |        |  |           | 2.0     |      |  |  | 2.2     |  |  |  | =a/(b+c+d+e+f+g)          | 
| |     |  |  | Class D                                |  |         |         |        |  |           | 1.6     |      |  |  | 1.8     |  |  |  | =a/(b+c+d+e+f+g+h)        | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         | 
| | [2] |  |  | Debt Coverage Ratio                    |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | Class A                                |  |         |         |        |  |           | 3.1     |      |  |  | 3.5     |  |  |  | =a/(b+c+d)                | 
| |     |  |  | Class B                                |  |         |         |        |  |           | 2.4     |      |  |  | 2.6     |  |  |  | =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 |        |  |           | 2,342.0 |      |  |  | 2,673.9 |  |  |  |                           | 
| |     |  |  | Liquidity Reserve Amount               |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | Of which  Cash                        |  |         | 156.9   |        |  |           | 109.9   |      |  |  | 116.0   |  |  |  |                           | 
| |     |  |  | - Accrued Expenses                     |  |         | 12.6    |        |  |           | 11.0    |      |  |  | 0.0     |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | Subtotal                               |  |         | 169.5   |        |  |           | 120.9   |      |  |  | 116.0   |  |  |  |                           | 
| |     |  |  | Less Lessee Security Deposits          |  |         | 36.9    |        |  |           | 29.9    |      |  |  | 36.0    |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| |     |  |  | Subtotal                               |  |         | 132.6   |        |  |           | 91.0    |      |  |  | 80.0    |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 
| | [4] |  |  | Total Asset Value                      |  |         | 3,241.2 |        |  |           | 2,433.0 |      |  |  | 2,753.9 |  |  |  |                           | 
| |     |  |  |                                        |  |         |         |        |  |           |         |      |  |  |         |  |  |  |                           | 

|                     |  |                |         |               |  |               |      |   |  |  |         |  |  |  |       |   |  |  |         |  |  |  |      |  
|-------------------- |  | -------------- | ------- | ------------- |  | ------------- | ---- | - |  |  | ------- |  |  |  | ----- | - |  |  | ------- |  |  |  | ---- | -
|Note Balances as at: |  | March 15, 2001 |         | July 15, 2003 |  | July 15, 2003
|                     |  |                |         |               |  |              
|Class A              |  |                | 1,895.4 |               |  |               | 58.5 | % |  |  | 1,640.5 |  |  |  | 67.4  | % |  |  | 1,515.2 |  |  |  | 55.0 | %
|Class B              |  |                | 278.3   |               |  |               | 67.1 | % |  |  | 233.7   |  |  |  | 77.0  | % |  |  | 235.3   |  |  |  | 63.6 | %
|Class C              |  |                | 349.8   |               |  |               | 77.9 | % |  |  | 349.8   |  |  |  | 91.4  | % |  |  | 349.8   |  |  |  | 76.3 | %
|Class D              |  |                | 395.1   |               |  |               | 90.0 | % |  |  | 395.1   |  |  |  | 107.6 | % |  |  | 395.1   |  |  |  | 90.6 | %
|                     |  |                |         |               |  |               |      |   |  |  |         |  |  |  |       |   |  |  |         |  |  |  |      |  
|                     |  |                | 2,918.6 |               |  |               |      |   |  |  | 2,619.1 |  |  |  |       |   |  |  | 2,495.4 |  |  |  |      |  
|                     |  |                |         |               |  |               |      |   |  |  |         |  |  |  |       |   |  |  |         |  |  |  |      |  

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|[1] |  | Interest Coverage Ratio is equal to Net Cash Collections (excluding
interest and swap payments) expressed as a ratio of the interest
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.                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|[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. Debt Coverage
Ratios have not been provided for the class C and D notes as no
scheduled principal amounts have been paid on these notes in the
period since March 2001.
|   
|[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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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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 June 30, 2003 and estimated fair value as of
June 30, 2003, are as follows:

|               |  |                   |  |                  |     |               |       |                |  |  |     |                |  |  |       | 
|-------------- |  | ----------------- |  | ---------------- | --- | ------------- | ----- | -------------- |  |  | --- | -------------- |  |  | ----- | 
|               |  | Annual Interest   |  |                  |     |               |       |                |  |  |     | Estimated Fair
|               |  | Rate              |  | Principal Amount |     | Final         |       | Value at      
|Class of Notes |  | (Payable Monthly) |  | at June 30, 2003 |     | Maturity Date |       | June 30, 2003*
|               |  |                   |  |                  |     |               |       |               
|               |  |                   |  |                  |     | $ Million     |       |                |  |  |     | $ Million     
|Subclass A-6   |  | (LIBOR+.34%)      |  |                  | 190 |               |       | March 15, 2019 |  |  | 171 |               
|Subclass A-8   |  | (LIBOR+.375%)     |  |                  | 700 |               |       | March 15, 2019 |  |  | 588 |               
|Subclass A-9   |  | (LIBOR+.55%)      |  |                  | 750 |               |       | March 15, 2019 |  |  | 615 |               
|Class B        |  | (LIBOR+.75%)      |  |                  | 234 |               |       | March 15, 2019 |  |  | 57  |               
|Class C        |  | (8.15%)           |  |                  | 350 |               |       | March 15, 2019 |  |  | 44  |               
|Class D        |  | (10.875%)         |  |                  | 395 |               |       | March 15, 2019 |  |  | 16  |               
|               |  |                   |  |                  |     |               |       |                |  |  |     |                |  |  |       | 
|               |  |                   |  |                  |     |               | 2,619 |                |  |  |     |                |  |  | 1,491 | 
|               |  |                   |  |                  |     |               |       |                |  |  |     |                |  |  |       | 



---

|* |  | Although the estimated fair values of the class A to D notes
outstanding have been determined by reference to prices as at June 30,
2003 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 payments which are based on either 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
97% of our portfolio by appraised value as of January 31, 2003 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 payments 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 payments contains a
higher percentage of fixed rate payments than the percentage of fixed
rate interest payments on the notes. One reason for this is the fact
that the reset periods on floating rental payments are generally longer
than the monthly reset periods on the floating rate notes. In order to
correlate the contracted fixed and floating rental payments to the
fixed and floating interest payments on the notes, Airplanes Group
enters into interest rate swaps (the swaps).

Under the swaps, Airplanes Group pays fixed amounts and receives
floating amounts on a monthly basis. The swaps amortize having regard
to the expected paydown schedule of the class A and class B notes, the
expiry dates of the leases under which lessees are contracted

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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 fixed and floating
mix of interest obligations and the fixed and floating mix of rental
payments.

We have reviewed and modified our hedging policy with the approval of
the rating agencies and will not enter into any further hedges of the
class B notes and certificates as we anticipate ceasing payments of
interest on these notes and certificates in the final quarter of 2003.
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. We also expect
that by the end of 2003, our cashflows will be insufficient to enable
any funds to be allocated to the Second Collection Account Top-up in
the priority of payments. Therefore, we are no longer including this
cash balance in our hedging calculations from the end of 2003.

At June 30, 2003, Airplanes Group had unamortized swaps with an
aggregate notional principal balance of $1,465 million. The aggregate
notional principal balance of these swaps will reduce, by their terms,
to $1,170 million by March 31, 2004, to an aggregate notional principal
balance of $700 million by March 31, 2005, to an aggregate notional
principal balance of $495 million by March 31, 2006, to an aggregate
notional principal balance of $275 million by March 31, 2007 and to an
aggregate notional principal balance of $90 million by March 2008. None
of the swaps have a maturity date extending beyond April 2008. The
aggregate estimated fair market value of the swaps at June 30, 2003 was
($83.4) million, that is the swaps were out-of-the-money, such that
if sold, Airplanes Group would incur a loss of $83.4 million, as
detailed below:

Airplanes Group Swap Book at June 30, 2003

|     |  |            |    |  |  |      |  |           |  |           |  |              |        |                    |        |                |            |   |            |   |  |  |  | 
|---- |  | ---------- | -- |  |  | ---- |  | --------- |  | --------- |  | ------------ | ------ | ------------------ | ------ | -------------- | ---------- | - | ---------- | - |  |  |  | 
|     |  | Notional   |    |  |  |      |  |           |  |           |  | Final        |        | Fixed              |        | Estimated Fair
|Swap |  | Amount (i) |    |  |  |      |  | Effective |  | Maturity  |  | Rate         |        | Market Value ($)  
|No.  |  | $'millions |    |  |  |      |  | Date      |  | Date      |  | Payable (ii) |        | as at Jun 30, 2003
|     |  |            |    |  |  |      |  |           |  |           |  |              |        |                   
|1    |  |            | 40 |  |  |      |  |           |  | 15-Jul-99 |  | 15-Aug-03    |        |                    | 6.2900 | %              |            |   | (275,811   | )
|2    |  |            | 10 |  |  |      |  |           |  | 18-Jan-00 |  | 15-Oct-03    |        |                    | 6.4650 | %              |            |   | (179,877   | )
|3    |  |            | 25 |  |  |      |  |           |  | 17-Aug-99 |  | 15-Nov-03    |        |                    | 6.3300 | %              |            |   | (462,419   | )
|4    |  |            | 25 |  |  |      |  |           |  | 15-Dec-00 |  | 15-Nov-03    |        |                    | 7.3625 | %              |            |   | (660,059   | )
|5    |  |            | 5  |  |  |      |  |           |  | 26-Apr-00 |  | 15-Nov-03    |        |                    | 6.6875 | %              |            |   | (166,046   | )
|6    |  |            | 30 |  |  |      |  |           |  | 20-Sep-00 |  | 15-Nov-03    |        |                    | 6.5625 | %              |            |   | (700,105   | )
|7    |  |            | 5  |  |  |      |  |           |  | 15-Nov-00 |  | 15-Nov-03    |        |                    | 6.5775 | %              |            |   | (115,479   | )
|8    |  |            | 10 |  |  |      |  |           |  | 15-Feb-01 |  | 15-Nov-03    |        |                    | 5.2750 | %              |            |   | (178,424   | )
|9    |  |            | 45 |  |  |      |  |           |  | 24-Mar-00 |  | 15-Dec-03    |        |                    | 6.8450 | %              |            |   | (1,304,260 | )
|10   |  |            | 20 |  |  |      |  |           |  | 15-Jan-03 |  | 15-Dec-03    |        |                    | 1.4825 | %              |            |   | (64,687    | )
|11   |  |            | 15 |  |  |      |  |           |  | 15-May-00 |  | 15-Jan-04    |        |                    | 7.2995 | %              |            |   | (548,817   | )
|12   |  |            | 10 |  |  |      |  |           |  | 26-Jun-00 |  | 15-Feb-04    |        |                    | 6.9775 | %              |            |   | (247,224   | )
|13   |  |            | 35 |  |  |      |  |           |  | 15-Aug-00 |  | 15-Feb-04    |        |                    | 6.7700 | %              |            |   | (1,352,695 | )
|14   |  |            | 0  |  |  | (iv) |  | 15-Jul-03 |  | 15-Mar-04 |  |              | 0.9700 | %                  |        |                | 81,210     |  
|15   |  |            | 15 |  |  |      |  |           |  | 18-Aug-00 |  | 15-Apr-04    |        |                    | 6.7700 | %              |            |   | (595,391   | )
|16   |  |            | 15 |  |  |      |  |           |  | 15-Nov-01 |  | 15-Apr-04    |        |                    | 4.8900 | %              |            |   | (449,127   | )
|17   |  |            | 60 |  |  |      |  |           |  | 30-Apr-02 |  | 15-Apr-04    |        |                    | 3.3700 | %              |            |   | (679,013   | )
|18   |  |            | 40 |  |  |      |  |           |  | 15-Aug-02 |  | 15-Apr-04    |        |                    | 2.1600 | %              |            |   | (336,844   | )
|19   |  |            | 25 |  |  |      |  |           |  | 17-Apr-01 |  | 15-May-04    |        |                    | 6.8290 | %              |            |   | (1,223,843 | )
|20   |  |            | 20 |  |  |      |  |           |  | 12-Oct-00 |  | 15-Jul-04    |        |                    | 6.5850 | %              |            |   | (1,059,153 | )
|21   |  |            | 65 |  |  |      |  |           |  | 17-Jun-02 |  | 15-Jul-04    |        |                    | 3.7700 | %              |            |   | (1,856,384 | )
|22   |  |            | 35 |  |  |      |  |           |  | 17-Sep-01 |  | 15-Sep-04    |        |                    | 5.7125 | %              |            |   | (1,999,372 | )
|23   |  |            | 30 |  |  |      |  |           |  | 17-Jun-02 |  | 15-Oct-04    |        |                    | 3.5800 | %              |            |   | (959,924   | )
|24   |  |            | 0  |  |  | (iv) |  | 15-Jul-03 |  | 15-Nov-04 |  |              | 5.7650 | %                  |        |                | (1,435,085 | )

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|   |  |  |       |  |  |      |  |           |  |           |  |           |        |   |        |   |            |   |             |   |  |  |             |  
|-- |  |  | ----- |  |  | ---- |  | --------- |  | --------- |  | --------- | ------ | - | ------ | - | ---------- | - | ----------- | - |  |  | ----------- | -
|25 |  |  | 25    |  |  |      |  |           |  | 15-Apr-02 |  | 15-Dec-04 |        |   | 5.3975 | % |            |   | (1,070,808  | )
|26 |  |  | 30    |  |  |      |  |           |  | 15-Apr-03 |  | 15-Dec-04 |        |   | 4.2350 | % |            |   | (1,138,024  | )
|27 |  |  | 45    |  |  |      |  |           |  | 15-May-01 |  | 15-Jan-05 |        |   | 4.7950 | % |            |   | (2,268,846  | )
|28 |  |  | 145   |  |  |      |  |           |  | 21-Aug-01 |  | 15-Feb-05 |        |   | 4.4195 | % |            |   | (3,488,581  | )
|29 |  |  | 0     |  |  | (iv) |  | 15-Oct-04 |  | 17-Oct-05 |  |           | 4.5650 | % |        |   | (175,371   | )
|30 |  |  | 30    |  |  |      |  |           |  | 17-Oct-01 |  | 15-Nov-05 |        |   | 3.9475 | % |            |   | (1,817,298  | )
|31 |  |  | 95    |  |  |      |  |           |  | 24-Jul-01 |  | 15-Dec-05 |        |   | 5.2850 | % |            |   | (7,806,104  | )
|32 |  |  | 0     |  |  | (iv) |  | 17-Nov-03 |  | 17-Jan-06 |  |           | 5.1150 | % |        |   | (1,518,674 | )
|33 |  |  | 200   |  |  |      |  |           |  | 20-Dec-01 |  | 15-Feb-06 |        |   | 4.6350 | % |            |   | (12,021,458 | )
|34 |  |  | 10    |  |  |      |  |           |  | 15-May-03 |  | 15-Mar-06 |        |   | 2.8800 | % |            |   | (380,280    | )
|35 |  |  | 25    |  |  |      |  |           |  | 30-Jan-02 |  | 15-Apr-06 |        |   | 3.5040 | % |            |   | (1,343,922  | )
|36 |  |  | 130   |  |  |      |  |           |  | 15-Mar-02 |  | 15-Apr-06 |        |   | 4.0125 | % |            |   | (4,224,759  | )
|37 |  |  | 0     |  |  | (iv) |  | 15-Dec-03 |  | 18-Apr-06 |  |           | 2.9425 | % |        |   | (499,359   | )
|38 |  |  | 55    |  |  |      |  |           |  | 15-Aug-02 |  | 15-Jul-06 |        |   | 5.5500 | % |            |   | (10,339,382 | )
|39 |  |  | 0     |  |  | (iv) |  | 17-Oct-05 |  | 15-Oct-06 |  |           | 4.9400 | % |        |   | (189,311   | )
|40 |  |  | 0     |  |  | (iv) |  | 15-Jul-04 |  | 15-May-07 |  |           | 5.8620 | % |        |   | (7,578,162 | )
|41 |  |  | 0     |  |  | (iv) |  | 15-Mar-04 |  | 15-May-07 |  |           | 5.2020 | % |        |   | (3,550,093 | )
|42 |  |  | 60    |  |  |      |  |           |  | 15-Apr-03 |  | 15-May-07 |        |   | 3.5350 | % |            |   | (2,693,577  | )
|43 |  |  | 35    |  |  |      |  |           |  | 17-Mar-03 |  | 17-Sep-07 |        |   | 3.8700 | % |            |   | (4,236,856  | )
|44 |  |  | 0     |  |  | (iv) |  | 15-May-07 |  | 15-Nov-07 |  |           | 4.8000 | % |        |   | (301,979   | )
|45 |  |  | 0     |  |  | (iv) |  | 17-Sep-07 |  | 17-Dec-07 |  |           | 4.9440 | % |        |   | (157,273   | )
|46 |  |  | 0     |  |  | (iv) |  | 15-Jul-05 |  | 15-Apr-08 |  |           | 3.4800 | % |        |   | 186,942    |  
|   |  |  |       |  |  |      |  |           |  |           |  |           |        |   |        |   |            |   |             |   |  |  |             |  
|   |  |  | 1,465 |  |  |      |  |           |  |           |  |           |        |   |        |   |            |   |             |   |  |  | (83,382,004 | )
|   |  |  |       |  |  |      |  |           |  |           |  |           |        |   |        |   |            |   |             |   |  |  |             |  



---

|(i)   |  | While some of the above swaps have a fixed notional amount, many
amortize over the period to the final maturity date.                                                                                                                                  
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  |  | Each of the above swaps is calculated on a monthly fixed
actual/360 adjusted basis.                                                                                                                                                                    
|     
|(iii) |  | Under all swaps, Airplanes Group receives floating rate payments
at one month LIBOR, which resets monthly on an actual /360
adjusted basis.                                                                                                            
|     
|(iv)  |  | The initial amounts for swaps number 14, 24, 29, 32, 37, 39, 40,
41, 44, 45, and 46 are $135 million, $15 million, $15 million, $30
million, $30 million, $10 million, $65 million, $20 million, $95
million, $75 million and $45 million respectively.

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 received
fixed amounts. These swaptions could be exercised in the 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 cash flow performance.

Because not all lessees making fixed rate rental payments are expected
to default and not all lessee defaults are expected to occur following
a decline in interest rates, if Airplanes Group were to decide to
purchase swaptions, it would purchase swaptions in aggregate in a
notional amount less than the full extent of the exposure associated
with the lessees making fixed rate rental payments. This notional
amount (the target hedge) will be varied from time to time to
reflect, among other things, changes in the mix of payment bases under
future leases and in the prevailing level of interest rates.

The payment of the premium for any of these swaptions may be made at
two points in the priority of payments under the indentures. Fifty
percent of any swaption premium in any

46



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##### Table of Contents



month is a minimum hedge payment and is paid fourth in Airplanes
Groups order of priority of payments. The other fifty percent of the
premium is expended as a supplemental hedge payment and is paid
seventeenth in Airplanes Groups order of priority of payments.

If there are not sufficient amounts available for distribution and a
supplemental hedge payment would not be made in any month, then
Airplanes Group would reduce the aggregate notional amount of the
swaptions bought in that month to reflect the amount that can be bought
for the premium payable as a minimum hedge payment. As a result of the
outstanding class A principal adjustment amount, no supplemental hedge
payments can be made until there are sufficient cash flows in any given
month to satisfy all obligations ranking senior to the supplemental
hedge payment under the terms of the notes.

If at any time there are outstanding swaptions, the Administrative
Agent may also sell at market value or unwind part or all of the
outstanding swaptions, for example, to reflect any decreases in the
target hedge. In the period from March 28, 1996 to March 31, 2002,
Airplanes Group purchased swaptions for interest rate swaps with an
aggregate notional principal balance of $659 million and sold swaptions
with an aggregate notional principal balance of $589 million and
swaptions with an aggregate notional principal of $70 million matured.
The net aggregate notional principal balance of swaptions at June 30,
2003 therefore amounted to $Nil.

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. In particular, because of our current
financial condition, we may have difficulty finding counterparties.
Some of our counterparties have also ceased to be eligible
counterparties because they have been downgraded.

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 certain rating requirements.

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 or if it
issues new subclasses of refinancing notes with different interest rate
provisions from the notes. Please refer to Risk Factors in the
Airplanes Group Report on Form 10-K for the year ended March 31, 2003
for more information about risks, especially lessee credit risk, that
could intensify Airplanes Groups exposure to changes in interest
rates.

47



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##### Table of Contents






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 15d) as of a date (the Evaluation
Date) as of the end of the period covered by this quarterly report,
has concluded that as of the Evaluation Date, 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.

(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 15d-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.

48



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##### Table of Contents






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 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 1.98% of our portfolio by appraised value
as of June 30, 2003. In December 1996, the High Court in Sao Paolo,
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 High Court granted a stay of the
1996 judgment while it considered debis AirFinance Irelands rescission
action. In April 2002, the High Court 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.
debis AirFinance Ireland has indicated that it will continue to
actively pursue all available courses of action, including defending
appeals to superior courts which may seek to overturn the High Court
decision of April 2002. A risk of repossession would only arise if VASP
were successful on appeal in seeking repossession of the aircraft and
the aircraft were located in Brazil. 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 ongoing tax audits by certain
state and local tax authorities with respect to tax returns previously
reported by debis AirFinance, Inc. and its subsidiaries. debis
AirFinance believes that none of these audits will have a material
adverse impact upon the liquidity, results of operations or the
financial conditions of AeroUSA, Inc.

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.




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).

49



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##### Table of Contents



|   |  |                           
|-- |  | --------------------------
|32 |  | Section 1350 Certification

Reports on Form 8-K:

Filed on April 11, 2003, May 13, 2003 and June 12, 2003 (relating to
the monthly report to holders of the certificates) and April 1, 2003,
May 12, 2003 and June 6, 2003 (relating to ratings actions).

50



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##### Table of Contents






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: August 14, 2003 |  | AIRPLANES LIMITED   
|                      |  |                      |  |                                  
|                      |  | By:                  |  | /s/ William M. McCann            
|                      |  |                      |  |                                  
|                      |  |                      |  | William M. McCann                
|                      |  |                      |  | Director and Principal           
|                      |  |                      |  | Accounting Officer               
|                      |  |                      |  |                                  
|Date: August 14, 2003 |  | AIRPLANES U.S. TRUST
|                      |  |                      |  |                                  
|                      |  | By:                  |  | /s/ William M. McCann            
|                      |  |                      |  |                                  
|                      |  |                      |  | William M. McCann                
|                      |  |                      |  | Controlling Trustee and Principal
|                      |  |                      |  | Accounting Officer               





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##### Table of Contents



APPENDIX

Particulars of the Portfolio as of June 30, 2003 are contained in the table below

AIRPLANES GROUP PORTFOLIO ANALYSIS

|       |  |                |  |                            |  |               |  |             |  |        |       |                  |  |                    |        | 
|------ |  | -------------- |  | -------------------------- |  | ------------- |  | ----------- |  | ------ | ----- | ---------------- |  | ------------------ | ------ | 
|       |  |                |  |                            |  |               |  |             |  |        |       |                  |  | Apprasied Value at
|       |  |                |  |                            |  |               |  |             |  | Serial |       | January 31, 2003
|Region |  | Country        |  | Lessee                     |  | Aircraft Type |  | Engine Type |  | Number |       | ($000's)        
|       |  |                |  |                            |  |               |  |             |  |        |       |                 
|Africa |  | Tunisia        |  | Nouvelair Tunisie          |  | A320-200      |  | CFM56-5A3   |  |        | 348   |                  |  |                    | 24,258 | 
|       |  | Tunisia        |  | Nouvelair Tunisie          |  | MD83          |  | JT8D-219    |  |        | 49631 |                  |  |                    | 12,534 | 
|       |  | Tunisia        |  | Nouvelair Tunisie          |  | MD83          |  | JT8D-219    |  |        | 49672 |                  |  |                    | 11,487 | 
|Asia   |  | Australia      |  | National Jet Systems       |  | DHC8-100      |  | PW121       |  |        | 229   |                  |  |                    | 4,539  | 
|       |  | Bangladesh     |  | GMG Airlines               |  | DHC8-300      |  | PW123       |  |        | 307   |                  |  |                    | 6,389  | 
|       |  | China          |  | China Southern             |  | B737-500      |  | CFM56-3C1   |  |        | 24897 |                  |  |                    | 15,803 | 
|       |  | China          |  | China Southern             |  | B737-500      |  | CFM56-3C1   |  |        | 25182 |                  |  |                    | 16,771 | 
|       |  | China          |  | China Southern             |  | B737-500      |  | CFM56-3C1   |  |        | 25183 |                  |  |                    | 17,479 | 
|       |  | China          |  | China Southern             |  | B737-500      |  | CFM56-3C1   |  |        | 25188 |                  |  |                    | 17,554 | 
|       |  | China          |  | Shandong Airlines Co. Ltd  |  | B737-300QC    |  | CFM56-3B1   |  |        | 23499 |                  |  |                    | 14,476 | 
|       |  | China          |  | Shandong Airlines Co. Ltd  |  | B737-300QC    |  | CFM56-3B1   |  |        | 23500 |                  |  |                    | 13,932 | 
|       |  | China          |  | Xinjiang                   |  | B757-200      |  | RB211-535E4 |  |        | 26156 |                  |  |                    | 31,404 | 
|       |  | Indonesia      |  | Garuda                     |  | B737-400      |  | CFM56-3C1   |  |        | 24683 |                  |  |                    | 20,100 | 
|       |  | Indonesia      |  | Garuda                     |  | B737-400      |  | CFM56-3C1   |  |        | 24691 |                  |  |                    | 20,463 | 
|       |  | Indonesia      |  | Merpati Nusantara Airlines |  | B737-200A     |  | JT8D-15     |  |        | 22368 |                  |  |                    | 2,072  | 
|       |  | Indonesia      |  | Merpati Nusantara Airlines |  | B737-200A     |  | JT8D-15     |  |        | 22369 |                  |  |                    | 1,733  | 
|       |  | Indonesia      |  | PT Mandala Airlines        |  | B737-200A     |  | JT8D-17     |  |        | 21685 |                  |  |                    | 2,198  | 
|       |  | Indonesia      |  | PT Mandala Airlines        |  | B737-200A     |  | JT8D-15     |  |        | 22278 |                  |  |                    | 2,472  | 
|       |  | Indonesia      |  | PT Mandala Airlines        |  | B737-200A     |  | JT8D-17A    |  |        | 22803 |                  |  |                    | 3,387  | 
|       |  | Indonesia      |  | PT Mandala Airlines        |  | B737-200A     |  | JT8D-17A    |  |        | 22804 |                  |  |                    | 3,490  | 
|       |  | Indonesia      |  | PT Mandala Airlines        |  | B737-200A     |  | JT8D-17A    |  |        | 23023 |                  |  |                    | 3,540  | 
|       |  | Indonesia      |  | PT Metro Batavia           |  | B737-200A     |  | JT8D-15     |  |        | 22397 |                  |  |                    | 2,937  | 
|       |  | Indonesia      |  | PT Metro Batavia           |  | B737-200A     |  | JT8D-17A    |  |        | 22407 |                  |  |                    | 1,890  | 
|       |  | Indonesia      |  | PT Metro Batavia           |  | B737-200A     |  | JT8D-17A    |  |        | 22802 |                  |  |                    | 3,502  | 
|       |  | Indonesia      |  | PT Metro Batavia           |  | B737-400      |  | CFM56-3C1   |  |        | 24345 |                  |  |                    | 18,060 | 
|       |  | Indonesia      |  | PT Metro Batavia           |  | B737-400      |  | CFM56-3C1   |  |        | 24687 |                  |  |                    | 18,888 | 
|       |  | Malaysia       |  | Air Asia Sdn. Bhd          |  | B737-300      |  | CFM56-3C1   |  |        | 24905 |                  |  |                    | 18,506 | 
|       |  | Malaysia       |  | Air Asia Sdn. Bhd          |  | B737-300      |  | CFM56-3C1   |  |        | 24907 |                  |  |                    | 18,421 | 
|       |  | Pakistan       |  | Pakistan Int Airline       |  | A300B4-200    |  | CF6-50C2    |  |        | 269   |                  |  |                    | 4,898  | 
|       |  | Philippines    |  | Philippine Airlines        |  | B737-300      |  | CFM56-3B1   |  |        | 24770 |                  |  |                    | 16,556 | 
|       |  | Philippines    |  | Philippine Airlines        |  | B737-400      |  | CFM56-3C1   |  |        | 24684 |                  |  |                    | 19,471 | 
|       |  | Philippines    |  | Philippine Airlines        |  | B737-400      |  | CFM56-3C1   |  |        | 26081 |                  |  |                    | 22,855 | 
|       |  | South Korea    |  | Asiana Airlines            |  | B737-400      |  | CFM56-3C1   |  |        | 24493 |                  |  |                    | 18,460 | 
|       |  | South Korea    |  | Asiana Airlines            |  | B737-400      |  | CFM56-3C1   |  |        | 24520 |                  |  |                    | 18,829 | 
|       |  | Taiwan         |  | Far Eastern Air Transport  |  | MD83          |  | JT8D-219    |  |        | 49950 |                  |  |                    | 13,015 | 
|Europe |  | Czech Republic |  | Travel Servis a.s          |  | B737-400      |  | CFM56-3C1   |  |        | 24911 |                  |  |                    | 21,063 | 
|       |  | France         |  | Air France                 |  | A320-200      |  | CFM56-5A3   |  |        | 203   |                  |  |                    | 23,810 | 
|       |  | France         |  | Air France                 |  | A320-200      |  | CFM56-5A3   |  |        | 220   |                  |  |                    | 24,558 | 
|       |  | Hungary        |  | Malev                      |  | B737-400      |  | CFM56-3C1   |  |        | 26069 |                  |  |                    | 22,221 | 
|       |  | Hungary        |  | Malev                      |  | B737-400      |  | CFM56-3C1   |  |        | 26071 |                  |  |                    | 22,446 | 
|       |  | Iceland        |  | Air Atlanta                |  | B767-300ER    |  | PW4060      |  |        | 26204 |                  |  |                    | 47,594 | 
|       |  | Italy          |  | Air One SpA                |  | B737-300      |  | CFM56-3C1   |  |        | 25179 |                  |  |                    | 19,595 | 
|       |  | Italy          |  | Air One SpA                |  | B737-300      |  | CFM56-3C1   |  |        | 25187 |                  |  |                    | 19,617 | 
|       |  | Italy          |  | Air One SpA                |  | B737-400      |  | CFM56-3C1   |  |        | 24906 |                  |  |                    | 19,154 | 
|       |  | Italy          |  | Air One SpA                |  | B737-400      |  | CFM56-3C1   |  |        | 24912 |                  |  |                    | 19,308 | 
|       |  | Italy          |  | Eurofly S.P.A              |  | MD83          |  | JT8D-219    |  |        | 49390 |                  |  |                    | 10,549 | 
|       |  | Italy          |  | Meridiana SpA              |  | MD83          |  | JT8D-219    |  |        | 49792 |                  |  |                    | 13,533 | 
|       |  | Italy          |  | Meridiana SpA              |  | MD83          |  | JT8D-219    |  |        | 49935 |                  |  |                    | 13,243 | 





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##### Table of Contents



|              |  |                |  |                               |  |               |  |             |  |        |       |                  |  |                    |        | 
|------------- |  | -------------- |  | ----------------------------- |  | ------------- |  | ----------- |  | ------ | ----- | ---------------- |  | ------------------ | ------ | 
|              |  |                |  |                               |  |               |  |             |  |        |       |                  |  | Apprasied Value at
|              |  |                |  |                               |  |               |  |             |  | Serial |       | January 31, 2003
|Region        |  | Country        |  | Lessee                        |  | Aircraft Type |  | Engine Type |  | Number |       | ($000's)        
|              |  |                |  |                               |  |               |  |             |  |        |       |                 
|              |  | Italy          |  | Meridiana SpA                 |  | MD83          |  | JT8D-219    |  |        | 49951 |                  |  |                    | 14,581 | 
|              |  | Netherlands    |  | Schreiner Airways             |  | DHC8-300      |  | PW123       |  |        | 232   |                  |  |                    | 5,701  | 
|              |  | Netherlands    |  | Schreiner Airways             |  | DHC8-300      |  | PW123       |  |        | 244   |                  |  |                    | 5,855  | 
|              |  | Netherlands    |  | Schreiner Airways             |  | DHC8-300      |  | PW123       |  |        | 276   |                  |  |                    | 6,132  | 
|              |  | Netherlands    |  | Schreiner Airways             |  | DHC8-300      |  | PW123       |  |        | 298   |                  |  |                    | 6,518  | 
|              |  | Netherlands    |  | Schreiner Airways             |  | DHC8-300      |  | PW123       |  |        | 300   |                  |  |                    | 6,439  | 
|              |  | Norway         |  | Wideroes Flyveselskap a/s    |  | DHC8-300      |  | PW123       |  |        | 293   |                  |  |                    | 6,365  | 
|              |  | Norway         |  | Wideroes Flyveselskap a/s    |  | DHC8-300      |  | PW123       |  |        | 342   |                  |  |                    | 6,861  | 
|              |  | Spain          |  | Futura                        |  | B737-400      |  | CFM56-3C1   |  |        | 24689 |                  |  |                    | 19,922 | 
|              |  | Spain          |  | Futura                        |  | B737-400      |  | CFM56-3C1   |  |        | 24690 |                  |  |                    | 19,708 | 
|              |  | Spain          |  | Futura                        |  | B737-400      |  | CFM56-3C1   |  |        | 25180 |                  |  |                    | 22,019 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49620 |                  |  |                    | 12,205 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49624 |                  |  |                    | 11,586 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49626 |                  |  |                    | 12,037 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49709 |                  |  |                    | 11,598 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49936 |                  |  |                    | 13,142 | 
|              |  | Spain          |  | Spanair                       |  | MD83          |  | JT8D-219    |  |        | 49938 |                  |  |                    | 13,780 | 
|              |  | Turkey         |  | FreeBird Airlines             |  | MD83          |  | JT8D-219    |  |        | 49949 |                  |  |                    | 14,967 | 
|              |  | Turkey         |  | Orbit Ekspres Havayollari A.S |  | A300C4-200    |  | CF6-50C2    |  |        | 83    |                  |  |                    | 7,973  | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-400      |  | CFM56-3C1   |  |        | 24917 |                  |  |                    | 21,152 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-400      |  | CFM56-3C1   |  |        | 25181 |                  |  |                    | 21,122 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-400      |  | CFM56-3C1   |  |        | 25184 |                  |  |                    | 21,747 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-400      |  | CFM56-3C1   |  |        | 25261 |                  |  |                    | 21,653 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-400      |  | CFM56-3C1   |  |        | 26065 |                  |  |                    | 21,892 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-500      |  | CFM56-3C1   |  |        | 25288 |                  |  |                    | 17,688 | 
|              |  | Turkey         |  | Turk Hava Yollari             |  | B737-500      |  | CFM56-3C1   |  |        | 25289 |                  |  |                    | 17,164 | 
|              |  | United Kingdom |  | Go Fly Limited                |  | B737-300      |  | CFM56-3B2   |  |        | 23923 |                  |  |                    | 16,116 | 
|              |  | United Kingdom |  | MyTravel Airways              |  | A320-200      |  | CFM56-5A3   |  |        | 294   |                  |  |                    | 25,352 | 
|              |  | United Kingdom |  | MyTravel Airways              |  | A320-200      |  | CFM56-5A3   |  |        | 301   |                  |  |                    | 24,849 | 
|              |  | United Kingdom |  | MyTravel Airways              |  | A320-200      |  | CFM56-5A3   |  |        | 349   |                  |  |                    | 24,858 | 
|              |  | United Kingdom |  | Titan Airways Limited         |  | ATR42-300     |  | PW120       |  |        | 109   |                  |  |                    | 3,529  | 
|              |  | United Kingdom |  | Titan Airways Limited         |  | ATR42-300     |  | PW120       |  |        | 113   |                  |  |                    | 3,446  | 
|              |  | United Kingdom |  | Titan Airways Limited         |  | B757-200      |  | RB211-535E4 |  |        | 26151 |                  |  |                    | 31,591 | 
|Latin America |  | Antigua        |  | Caribbean Star Airlines       |  | DHC8-300      |  | PW123       |  |        | 267   |                  |  |                    | 6,550  | 
|              |  | Antigua        |  | Liat                          |  | DHC8-100      |  | PW120-A     |  |        | 113   |                  |  |                    | 3,319  | 
|              |  | Antigua        |  | Liat                          |  | DHC8-100      |  | PW120-A     |  |        | 140   |                  |  |                    | 3,498  | 
|              |  | Antigua        |  | Liat                          |  | DHC8-100      |  | PW120-A     |  |        | 144   |                  |  |                    | 3,492  | 
|              |  | Antigua        |  | Liat                          |  | DHC8-100      |  | PW120-A     |  |        | 270   |                  |  |                    | 4,083  | 
|              |  | Antigua        |  | Liat                          |  | DHC8-300      |  | PW123       |  |        | 283   |                  |  |                    | 6,230  | 
|              |  | Bermuda        |  | Hawk Aviation                 |  | B737-200A     |  | JT8D-17A    |  |        | 23024 |                  |  |                    | 3,042  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11284 |                  |  |                    | 6,969  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11285 |                  |  |                    | 7,094  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11304 |                  |  |                    | 7,793  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11305 |                  |  |                    | 7,800  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11336 |                  |  |                    | 8,163  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11347 |                  |  |                    | 8,326  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11348 |                  |  |                    | 7,897  | 
|              |  | Brazil         |  | TAM Linhas Aereas             |  | F100          |  | TAY650-15   |  |        | 11371 |                  |  |                    | 7,973  | 
|              |  | Brazil         |  | VARIG                         |  | MD11          |  | CF6-80C2D1F |  |        | 48499 |                  |  |                    | 46,887 | 
|              |  | Brazil         |  | VARIG                         |  | MD11          |  | CF6-80C2D1F |  |        | 48500 |                  |  |                    | 47,872 | 
|              |  | Brazil         |  | VARIG                         |  | MD11          |  | CF6-80C2D1F |  |        | 48501 |                  |  |                    | 49,184 | 
|              |  | Colombia       |  | Avianca                       |  | B757-200      |  | RB211-535E4 |  |        | 26154 |                  |  |                    | 30,805 | 
|              |  | Colombia       |  | Avianca                       |  | B767-200ER    |  | PW4060      |  |        | 25421 |                  |  |                    | 36,627 | 
|              |  | Colombia       |  | Avianca                       |  | MD83          |  | JT8D-219    |  |        | 49939 |                  |  |                    | 12,127 | 
|              |  | Colombia       |  | Avianca                       |  | MD83          |  | JT8D-219    |  |        | 49946 |                  |  |                    | 12,689 | 
|              |  | Colombia       |  | Avianca                       |  | MD83          |  | JT8D-219    |  |        | 53120 |                  |  |                    | 14,044 | 
|              |  | Colombia       |  | Avianca                       |  | MD83          |  | JT8D-219    |  |        | 53125 |                  |  |                    | 15,175 | 

A-2



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##### Table of Contents



|          |  |                          |  |                                  |  |               |  |             |  |        |       |                  |  |                    |        | 
|--------- |  | ------------------------ |  | -------------------------------- |  | ------------- |  | ----------- |  | ------ | ----- | ---------------- |  | ------------------ | ------ | 
|          |  |                          |  |                                  |  |               |  |             |  |        |       |                  |  | Apprasied Value at
|          |  |                          |  |                                  |  |               |  |             |  | Serial |       | January 31, 2003
|Region    |  | Country                  |  | Lessee                           |  | Aircraft Type |  | Engine Type |  | Number |       | ($000's)        
|          |  |                          |  |                                  |  |               |  |             |  |        |       |                 
|          |  | Colombia                 |  | Tampa                            |  | DC8-71F       |  | CFM56-2C1   |  |        | 45849 |                  |  |                    | 9,639  | 
|          |  | Colombia                 |  | Tampa                            |  | DC8-71F       |  | CFM56-2C1   |  |        | 45945 |                  |  |                    | 9,990  | 
|          |  | Colombia                 |  | Tampa                            |  | DC8-71F       |  | CFM56-2C1   |  |        | 45976 |                  |  |                    | 11,546 | 
|          |  | Colombia                 |  | Tampa                            |  | DC8-71F       |  | CFM56-2C1   |  |        | 46066 |                  |  |                    | 9,543  | 
|          |  | Mexico                   |  | Aeromexico                       |  | DC9-32        |  | JT8D-17     |  |        | 48125 |                  |  |                    | 1,613  | 
|          |  | Mexico                   |  | Aeromexico                       |  | DC9-32        |  | JT8D-17     |  |        | 48126 |                  |  |                    | 1,872  | 
|          |  | Mexico                   |  | Aeromexico                       |  | DC9-32        |  | JT8D-17     |  |        | 48127 |                  |  |                    | 1,463  | 
|          |  | Mexico                   |  | Aeromexico                       |  | DC9-32        |  | JT8D-17     |  |        | 48128 |                  |  |                    | 1,763  | 
|          |  | Mexico                   |  | Aeromexico                       |  | DC9-32        |  | JT8D-17     |  |        | 48129 |                  |  |                    | 2,004  | 
|          |  | Mexico                   |  | Aeromexico                       |  | MD82          |  | JT8D-217    |  |        | 49660 |                  |  |                    | 10,098 | 
|          |  | Mexico                   |  | Aeromexico                       |  | MD82          |  | JT8D-217A   |  |        | 49667 |                  |  |                    | 10,202 | 
|          |  | Mexico                   |  | Aeromexico                       |  | MD87          |  | JT8D-219    |  |        | 49673 |                  |  |                    | 9,318  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11266 |                  |  |                    | 7,146  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11309 |                  |  |                    | 7,899  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11319 |                  |  |                    | 7,715  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11339 |                  |  |                    | 8,210  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11374 |                  |  |                    | 9,048  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11375 |                  |  |                    | 8,330  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11382 |                  |  |                    | 9,248  | 
|          |  | Mexico                   |  | Mexicana                         |  | F100          |  | TAY650-15   |  |        | 11384 |                  |  |                    | 9,035  | 
|          |  | Netherlands Antilles     |  | Dutch Caribbean Airline          |  | DHC8-300C     |  | PW123       |  |        | 230   |                  |  |                    | 6,047  | 
|          |  | Netherlands Antilles     |  | Dutch Caribbean Airline          |  | DHC8-300C     |  | PW123       |  |        | 242   |                  |  |                    | 5,981  | 
|          |  | Trinidad & Tobago        |  | BWIA West Indies Airways Limited |  | MD83          |  | JT8D-219    |  |        | 49789 |                  |  |                    | 13,610 | 
|N America |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 174   |                  |  |                    | 23,124 | 
|          |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 175   |                  |  |                    | 23,652 | 
|          |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 232   |                  |  |                    | 23,219 | 
|          |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 284   |                  |  |                    | 24,282 | 
|          |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 309   |                  |  |                    | 23,870 | 
|          |  | Canada                   |  | Air Canada                       |  | A320-200      |  | CFM56-5A1   |  |        | 404   |                  |  |                    | 26,523 | 
|          |  | Canada                   |  | Air Canada                       |  | B767-300ER    |  | PW4060      |  |        | 24948 |                  |  |                    | 44,881 | 
|          |  | Canada                   |  | Air Canada                       |  | B767-300ER    |  | PW4060      |  |        | 26200 |                  |  |                    | 48,641 | 
|          |  | Canada                   |  | Jetsgo Airlines                  |  | MD83          |  | JT8D-219    |  |        | 49941 |                  |  |                    | 14,168 | 
|          |  | Canada                   |  | Jetsgo Airlines                  |  | MD83          |  | JT8D-219    |  |        | 49943 |                  |  |                    | 13,437 | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45811 |                  |  |                    | 9,864  | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45813 |                  |  |                    | 9,285  | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45973 |                  |  |                    | 10,250 | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45978 |                  |  |                    | 9,161  | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45993 |                  |  |                    | 9,344  | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 45994 |                  |  |                    | 8,891  | 
|          |  | United States of America |  | BAX Global                       |  | DC8-71F       |  | CFM56-2C1   |  |        | 46065 |                  |  |                    | 9,493  | 
|          |  | United States of America |  | DHL Airways                      |  | DC8-73CF      |  | CFM56-2C1   |  |        | 46091 |                  |  |                    | 13,251 | 
|          |  | United States of America |  | Frontier Airlines, Inc.          |  | B737-300      |  | CFM56-3B1   |  |        | 23177 |                  |  |                    | 13,191 | 
|          |  | United States of America |  | Pace Airlines                    |  | B737-300      |  | CFM56-3B2   |  |        | 23749 |                  |  |                    | 15,351 | 
|          |  | United States of America |  | Polar Air Cargo                  |  | B747-200SF    |  | JT9D-7Q     |  |        | 21730 |                  |  |                    | 19,522 | 
|          |  | United States of America |  | TWA Airlines LLC                 |  | MD83          |  | JT8D-219    |  |        | 49575 |                  |  |                    | 11,021 | 
|Off Lease |  | Off Lease                |  | Off Lease                        |  | A300B4-200    |  | CF6-50C2    |  |        | 131   |                  |  |                    | 4,935  | 
|          |  | Off Lease                |  | Off Lease                        |  | ATR42-300     |  | PW120       |  |        | 249   |                  |  |                    | 4,327  | 
|          |  | Off Lease                |  | Off Lease                        |  | ATR42-300     |  | PW121       |  |        | 284   |                  |  |                    | 4,744  | 
|          |  | Off Lease                |  | Off Lease                        |  | B737-200A     |  | JT8D-15     |  |        | 21735 |                  |  |                    | 3,059  | 
|          |  | Off Lease                |  | Off Lease                        |  | B737-200A     |  | JT8D-15     |  |        | 22979 |                  |  |                    | 3,993  | 
|          |  | Off Lease                |  | Off Lease                        |  | B737-500      |  | CFM56-3C1   |  |        | 25185 |                  |  |                    | 16,565 | 
|          |  | Off Lease                |  | Off Lease                        |  | B737-500      |  | CFM56-3C1   |  |        | 25191 |                  |  |                    | 18,036 | 
|          |  | Off Lease                |  | Off Lease                        |  | DC8-71F       |  | CFM56-2C1   |  |        | 45946 |                  |  |                    | 8,888  | 
|          |  | Off Lease                |  | Off Lease                        |  | DC8-71F       |  | CFM56-2C1   |  |        | 45971 |                  |  |                    | 9,952  | 
|          |  | Off Lease                |  | Off Lease                        |  | DC8-71F       |  | CFM56-2C1   |  |        | 45996 |                  |  |                    | 10,346 | 
|          |  | Off Lease                |  | Off Lease                        |  | DC8-71F       |  | CFM56-2C1   |  |        | 45997 |                  |  |                    | 10,345 | 
|          |  | Off Lease                |  | Off Lease                        |  | DC8-71F       |  | CFM56-2C1   |  |        | 45998 |                  |  |                    | 10,421 | 

A-3



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##### Table of Contents



|       |  |            |  |                                   |  |               |  |             |  |        |       |                  |  |                    |           | 
|------ |  | ---------- |  | --------------------------------- |  | ------------- |  | ----------- |  | ------ | ----- | ---------------- |  | ------------------ | --------- | 
|       |  |            |  |                                   |  |               |  |             |  |        |       |                  |  | Apprasied Value at
|       |  |            |  |                                   |  |               |  |             |  | Serial |       | January 31, 2003
|Region |  | Country    |  | Lessee                            |  | Aircraft Type |  | Engine Type |  | Number |       | ($000's)        
|       |  |            |  |                                   |  |               |  |             |  |        |       |                 
|       |  | Off Lease  |  | Off Lease                         |  | DHC8-100      |  | PW121       |  |        | 258   |                  |  |                    | 4,111     | 
|       |  | Off Lease  |  | Off Lease                         |  | DHC8-300      |  | PW123       |  |        | 266   |                  |  |                    | 6,389     | 
|       |  | Off Lease  |  | Off Lease                         |  | DHC8-300      |  | PW123       |  |        | 296   |                  |  |                    | 6,172     | 
|       |  | Off Lease  |  | Off Lease                         |  | DHC8-300      |  | PW123       |  |        | 334   |                  |  |                    | 6,627     | 
|       |  | Off Lease  |  | Off Lease                         |  | MD83          |  | JT8D-219    |  |        | 49442 |                  |  |                    | 11,243    | 
|       |  | Off Lease  |  | Off Lease                         |  | METRO-III     |  | TPE331-11   |  |        | 705   |                  |  |                    | 853       | 
|       |  | Off Lease  |  | Off Lease  LOI Euro Atlantic (1) |  | B767-300ER    |  | PW4060      |  |        | 25411 |                  |  |                    | 48,288    | 
|       |  | Off Lease  |  | Off Lease  LOI Promodal (1)      |  | DC8-71F       |  | CFM56-2C1   |  |        | 45970 |                  |  |                    | 11,459    | 
|       |  | Off Lease  |  | Off Lease  LOI Sky Europe (1)    |  | B737-500      |  | CFM56-3C1   |  |        | 25186 |                  |  |                    | 16,497    | 
|Other  |  | Kazakhstan |  | Air Kazakhstan                    |  | B737-200A     |  | JT8D-15     |  |        | 22090 |                  |  |                    | 2,086     | 
|       |  | Kazakhstan |  | Air Kazakhstan                    |  | B737-200A     |  | JT8D-15     |  |        | 22453 |                  |  |                    | 2,402     | 
|       |  | Ukraine    |  | Ukraine International             |  | B737-400      |  | CFM56-3C1   |  |        | 25190 |                  |  |                    | 21,986    | 
|       |  | Ukraine    |  | Ukraine International             |  | B737-500      |  | CFM56-3C1   |  |        | 25192 |                  |  |                    | 17,286    | 
|       |  | Ukraine    |  | Ukraine International             |  | B737-500      |  | CFM56-3C1   |  |        | 26075 |                  |  |                    | 16,689    | 
|       |  |            |  |                                   |  |               |  |             |  |        |       |                  |  |                    |           | 
|       |  |            |  |                                   |  |               |  |             |  |        |       |                  |  |                    | 2,419,687 | 
|       |  |            |  |                                   |  |               |  |             |  |        |       |                  |  |                    |           | 

Note:



---

|(1) |  | These aircraft are subject to LOI for lease and scheduled for delivery after June 30, 2003.
|--- |  | -------------------------------------------------------------------------------------------

A-4