SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ---------

                                   FORM 10-Q

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

                For the quarterly period ended December 31, 2003

                                       OR

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

             For the transition period from _________ to __________

                       Commission file number 33-99970-01


           Airplanes Limited                    Airplanes U.S. Trust
      Exact Name of Registrants as specified in memorandum of association
                              or trust agreement

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

                 7359                              13-3521640
              (SIC Code)                (I.R.S. Employer Identification No.)
           Airplanes Limited                   Airplanes U.S. Trust
          22 Grenville Street                1100 North Market Street,
              St. Helier                       Rodney Square North
            Jersey, JE4 8PX                    Wilmington, Delaware
            Channel Islands                         19890-0001
         (011 44 1534 609 000)                   (1-302-651-1000)
            (Addresses and telephone numbers, including area codes,
                 of Registrants' principal executive offices)

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

                        Yes [X]                  No [ ]

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

                        Yes [X]                  No [ ]


                     APPLICABLE ONLY TO CORPORATE ISSUERS:

 Indicate the number of shares outstanding of each of the issuer's classes of
 common stock, as of the latest practicable date. Outstanding at Issuer Class
                               December 31, 2003

                                                             Outstanding at
Issuer                             Class                    December 31, 2003
------                             -----                    -----------------

Airplanes Limited      Ordinary Shares, $1.00 par value            30


<PAGE>


                   Airplanes Limited and Airplanes U.S. Trust

          Form 10-Q for the Three Month Period Ended December 31, 2003

                                     Index

Part I.  Financial Information                                        Page No.

Item 1.  Financial Statements (Unaudited)                                 3

         - Unaudited Condensed Balance Sheets - December 31,
           2003 and March 31, 2003
         - Unaudited Condensed Statements of Operations - Three
           Months Ended December 31, 2003 and December 31, 2002
         - Unaudited Condensed Statements of Operations - Nine
           Months Ended December 31, 2003 and December 31, 2002
         - Unaudited Condensed Statements of Comprehensive
           Income/(Loss) - Three Months Ended December 31,
           2003 and December 31, 2002
         - Unaudited Condensed Statements of Comprehensive
           Income/(Loss) - Nine Months Ended December 31, 2003
           and December 31, 2002
         - Unaudited Statements of Changes in Shareholders
           Deficit/Net Liabilities - Nine Months Ended December
           31, 2003 and December 31, 2002
         - Unaudited Condensed Statements of Cashflows - Nine
           Months Ended December 31, 2003 and December 31, 2002
         - Notes to the Unaudited Condensed Financial Statements

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                             15

         - Introduction
         - Results of Operations - Three Months Ended December 31,
           2003 compared with Three Months Ended December 31, 2002
         - Comparison of Actual Cashflows versus the 2001 Base Case
           for the Three Month Period from October 9, 2003 to
           January 15, 2004

Item 3.  Quantitative and Qualitative Disclosures about Market Risks     53

Item 4.  Controls and Procedures                                         57

Part II. Other Information

Item 1.  Legal Proceedings                                               58

Item 2.  Changes in Securities and use of Proceeds                       59

Item 3.  Defaults Upon Senior Securities                                 59

Item 4.  Submission of Matters to a Vote of Security Holders             59

Item 6.  Exhibits and Reports on Form 8-K                                59

Signatures

Appendix 1    Portfolio Information as at December 31, 2003


                                       2
<PAGE>


Part I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

<TABLE>

                                                              AIRPLANES GROUP

                                                       UNAUDITED CONDENSED BALANCE SHEETS


                                                 March 31,                                December 31,
                                     ----------------------------------  -----------------------------------
                                                   2003                                2003
                                     ----------------------------------  -----------------------------------
                                     Airplanes   Airplanes               Airplanes   Airplanes
                                      Limited      Trust      Combined    Limited     Trust      Combined
                                     ----------  ----------  ----------------------  ---------  ------------
                                                 ($millions)                         ($millions)
ASSETS

<S>                                        <C>           <C>       <C>          <C>         <C>          <C>
Cash                                       135           6         141          89          6            95
Accounts receivable
    Trade receivables                       30           7          37          25          4            29
    Allowance for doubtful debts           (14)         (6)        (20)        (15)        (3)          (18)
Amounts due from Airplanes Limited           -          58          58           -         49            49
Net investment in capital and sales
     type leases                             3           -           3           2          -             2
Aircraft, Held for Use                   1,944         111       2,055       1,531         73         1,604
Aircraft, Held for Sale                      -           -           -           3          -             3
Other assets                                 1           -           1           2          -             2
                                     ---------  ----------  ----------  ----------  ---------  ------------
Total assets                             2,099         176       2,275       1,637        129         1,766
                                     =========  ==========  ==========  ==========  =========  ============

LIABILITIES

Accrued expenses and other liabilities   2,003         193       2,196       2,447        238         2,685
Amounts due to Airplanes Trust              58           -          58          49          -            49
Indebtedness                             2,924         285       3,209       2,859        278         3,137
Provision for maintenance                  262          13         275         276         13           289
Deferred income taxes                       13          18          31           -         15            15
                                     ---------  ----------  ----------  ----------  ---------  ------------
Total liabilities                        5,260         509       5,769       5,631        544         6,175
                                     ---------  ----------  ----------  ----------  ---------  ------------
Common Stock, $1 par value per share,
Authorised 10,000 shares; issued and
outstanding 30 shares.                       -           -           -           -          -             -
                                     ---------  ----------  ----------  ----------  ---------  ------------
Net liabilities                         (3,161)       (333)     (3,494)     (3,994)      (415)       (4,409)
                                     ---------  ----------  ----------  ----------  ---------  ------------
                                     ---------  ----------  ----------  ----------  ---------  ------------
                                         2,099         176       2,275       1,637        129         1,766
                                     =========  ==========  ==========  ==========  =========  ============


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

                                       3

<PAGE>

<TABLE>

                                                    AIRPLANES GROUP

                                        UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

                                               Three Months Ended December 31,
                                ----------------------------------------------------------------
                                             2002                            2003
                                ------------------------------  --------------------------------
                                Airplanes  Airplanes            Airplanes  Airplanes
                                Limited     Trust     Combined  Limited     Trust     Combined
                                ---------  --------- --------------------  ---------  ----------
                                           ($millions)                     ($millions)

<S>                                   <C>         <C>      <C>        <C>         <C>        <C>
Revenues
Aircraft leasing                      77          4        81         59          3          62
Aircraft sales                         1          -         1          1          -           1

Expenses
Cost of Aircraft sold                  -          -         -         (1)         -          (1)
Impairment Provision                 (74)        (2)      (76)      (100)       (11)       (111)
Depreciation and amortisation        (34)        (2)      (36)       (26)        (2)        (28)
Net interest expense                (167)       (17)     (184)      (198)       (19)       (217)
Bad and doubtful debts                 4          -         4          1          1           2
Other lease costs                    (17)        (1)      (18)       (19)        (2)        (21)
Selling, general and administrative
   expenses                           (9)        (1)      (10)       (12)        (1)        (13)
                                ---------  --------- ---------  ---------  ---------  ----------
Operating loss before
provision for  income taxes         (219)       (19)     (238)      (295)       (31)       (326)

Income tax charge                      -          -         -          -         (1)         (1)

                                ---------  --------- ---------  ---------  ---------  ----------
Net loss                            (219)       (19)     (238)      (295)       (32)       (327)
                                =========  ========= =========  =========  =========  ==========

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

                                       4

<PAGE>

<TABLE>

                                                    AIRPLANES GROUP

                                         UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

                                                 Nine Months Ended December 31,
                                -----------------------------------------------------------------
                                             2002                            2003
                                -------------------------------  --------------------------------
                                Airplanes  Airplanes             Airplanes  Airplanes
                                 Limited     Trust     Combined    Limited    Trust      Combined
                                ---------  ---------  ---------- ---------  ---------  -----------
                                           ($millions)                     ($millions)
<S>                                  <C>         <C>       <C>       <C>         <C>         <C>
Revenues
Aircraft leasing                     265         18        283       194         10          204
Aircraft sales                         5          -          5         2          -            2

Expenses
Cost of Aircraft sold                 (4)         -         (4)       (3)         -           (3)
Impairment Provision                 (74)        (2)       (76)     (318)       (32)        (350)
Depreciation and amortisation       (101)        (6)      (107)      (88)        (5)         (93)
Net interest expense                (482)       (48)      (530)     (570)       (56)        (626)
Bad and doubtful debts                (2)        (1)        (3)       (1)         -           (1)
Other lease costs                    (58)        (5)       (63)      (63)        (3)         (66)
Selling, general and administrative
   expenses                          (24)        (2)       (26)      (27)        (2)         (29)
                                ---------  ---------  ---------  --------  ---------  -----------
Operating loss before
provision for  income taxes         (475)       (46)      (521)     (874)       (88)        (962)

Income tax benefit                     1          2          3        13          3           16

                                ---------  ---------  ---------  --------  ---------  -----------
Net loss                            (474)       (44)      (518)     (861)       (85)        (946)
                                =========  =========  =========  ========  =========  ===========


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

                                       5

<PAGE>

<TABLE>

                                                            AIRPLANES GROUP

                                    UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

                                                       Three Months Ended December 31,
                                    ----------------------------------------------------------------
                                                 2002                            2003
                                    ------------------------------  --------------------------------
                                    Airplanes  Airplanes            Airplanes  Airplanes
                                    Limited     Trust     Combined  Limited     Trust     Combined
                                    ---------  --------- --------------------  --------- -----------
                                               ($millions)                     ($millions)
<S>                                     <C>         <C>      <C>        <C>         <C>        <C>
Loss for the period                     (219)       (19)     (238)      (295)       (32)       (327)

Other Comprehensive (Loss) / Gain

 - Net change in cashflow hedges           4          1         5         13          2          15
                                    ---------  --------- ---------  ---------  --------- -----------
Total Comprehensive loss                (215)       (18)     (233)      (282)       (30)       (312)
                                    =========  ========= =========  =========  ========= ===========

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

</TABLE>

                                       6

<PAGE>

<TABLE>
                                                           AIRPLANES GROUP

                                   UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

                                                     Nine Months Ended December 31,
                                    ----------------------------------------------------------------
                                                2002                            2003
                                    ------------------------------  --------------------------------
                                    Airplanes Airplanes             Airplanes Airplanes
                                    Limited    Trust      Combined  Limited    Trust      Combined
                                    --------- ---------  ---------- ---------- ---------  -----------
                                              ($millions)                     ($millions)
<S>                                     <C>        <C>       <C>        <C>        <C>         <C>
Loss for the period                     (474)      (44)      (518)      (861)      (85)        (946)

Other Comprehensive (Loss) / Gain

 - Net change in cashflow hedges         (47)       (4)       (51)        28         3           31

                                    --------- ---------  ---------  --------- ---------  -----------
Total Comprehensive loss                (521)      (48)      (569)      (833)      (82)        (915)
                                    ========= =========  =========  ========= =========  ===========


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

                                       7

<PAGE>
<TABLE>
                                                           AIRPLANES GROUP

                               UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES

                                       Nine Months Ended December 31, 2003 and December 31, 2002

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

<S>                          <C>        <C>             <C>       <C>            <C>           <C>         <C>          <C>
Balance at March 31, 2002       -       2,454           33        2,487          270             3           273          2,760

Net loss for the period         -         474            -          474           44             -            44            518

Other Comprehensive
   Loss / (Gain)                -           -           47           47            -             4             4             51
                           ------  ----------  -----------    ---------   ----------    ----------       -------   ------------
Balance at December 31,
   2002                         -       2,928           80        3,008          314             7           321          3,329
                           ======  ==========  ===========    =========   ==========    ==========       =======   ============


Balance at March 31, 2003       -       3,090           71        3,161          326             7           333          3,494

Net loss for the period         -         861            -          861           85             -            85            946

Other Comprehensive Loss /
    (Gain)                      -           -          (28)         (28)           -            (3)           (3)           (31)
                            ------ ---------- -----------     ---------   ----------    ----------       -------   ------------
Balance at December 31,
   2003                         -       3,951           43        3,994          411             4           415          4,409
                           ======  ==========  ===========    =========   ==========    ==========       =======  ============

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

                                       8

<PAGE>

<TABLE>
                                                                     AIRPLANES GROUP

                                                       UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS



                                                            Nine Months Ended December 31,
                                          ---------------------------------------------------------------
                                                       2002                            2003
                                          ------------------------------  -------------------------------
                                          Airplanes  Airplanes            Airplanes  Airplanes
                                          Limited     Trust     Combined  Limited     Trust     Combined
                                          ---------  ---------  --------- ---------  ---------  ---------
                                                     ($millions)                     ($millions)
<S>                                           <C>         <C>      <C>        <C>         <C>       <C>
Cash flows from operating activities
Net loss                                      (474)       (44)     (518)      (861)       (85)      (946)
Adjustment to reconcile (net loss)
to net cash provided by operating activities:
Depreciation                                   101          6       107         88          5         93
Impairment Charge                               74          2        76        318         32        350
Aircraft maintenance, net                       17          3        20         16          2         18
Loss on disposal of aircraft                    (1)         -        (1)         1          -          1
Deferred income taxes                           (1)        (2)       (3)       (13)        (3)       (16)
Provision for bad debts                          2          1         3          1          -          1
Accrued and deferred interest expense          361         36       397        473         47        520

Changes in operating assets & liabilities:
Accounts receivable                              1         (1)        -          5          -          5
Intercompany account movements                  (4)         4         -         (8)         8          -
Other accruals and liabilities                  (1)        (2)       (3)         1          -          1
Other assets                                     -          4         4         (1)         1          -
                                         ---------  ---------  --------  ---------  ---------  ---------
Net cash provided by operating activities       75          7        82         20          7         27
                                         =========  =========  ========  =========  =========  =========

Cash flows from investing activities
Purchase/Sale of aircraft                        3          -         3          -          -          -
Capital and sales type leases                    2          -         2          1          -          1

Net cash provided by                     ---------  ---------  --------  ---------  ---------  ---------
investing activities                             5          -         5          1          -          1
                                         =========  =========  ========  =========  =========  =========

Cash flows from financing activities
Repayment of indebtedness                      (82)        (7)      (89)       (67)        (7)       (74)

                                         ---------  ---------  --------  ---------  ---------  ---------
Net cash used in financing activities          (82)        (7)      (89)       (67)        (7)       (74)
                                         =========  =========  ========  =========  =========  =========

Net increase / (decrease) in cash               (2)         -        (2)       (46)         -        (46)

Cash at beginning of period                    136          6       142        135          6        141
                                         ---------  ---------  --------  ---------  ---------  ---------

Cash at end of period                          134          6       140         89          6         95
                                         =========  =========  ========  =========  =========  =========

Cash paid in respect of:
Interest                                       124         12       136         99          9        108
                                         =========  =========  ========  =========  =========  =========

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

                                       9
<PAGE>

<PAGE>


                                Airplanes Group

Notes to the Unaudited Condensed Financial Statements

1.   Basis of Preparation

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

The accompanying financial statements for Airplanes Limited and Airplanes Trust
reflect all adjustments which in the opinion of management are necessary to
present a fair statement of the information presented as of December 31, 2003
and for the three month period ended December 31, 2003. Such adjustments are of
a normal, recurring nature. The results of operations for the three and nine
month periods ended December 31, 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
December 31, 2003 we have continued to suffer from a difficult business
environment. During the past three 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 war in Iraq, continued threat of terrorist
attacks and the outbreak, in early 2003, of Severe Acute Respiratory Syndrome
("SARS") have adversely impacted the commercial aviation industry.

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


                                      10
<PAGE>


Condition and Results of Operations - Recent Developments." 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. Due to the fact that the appraised value of our fleet
has declined more rapidly than was assumed in the 2001 Base Case, we have been
required to make additional payments on the class A notes (class A principal
adjustment amounts) to the extent of available cashflows in order to meet
certain loan to current appraised value ratios. As a result of earlier payments
of class A principal adjustment amounts, we remained ahead of the required
class A minimum principal payment schedule. However, we have not always had
sufficient cashflows to pay class A principal adjustment amounts in full and
since the April 15, 2003 payment date, we have not had sufficient cashflows to
pay any class A principal adjustment amount. As a result, since the payment
date on August 15, 2003 we have no longer been ahead of the required class A
minimum principal payment schedule. Therefore we had to recommence payments of
minimum principal on the class A notes to the extent of available cashflows on
that date. Insufficient cashflows also resulted in a partial depletion of the
"Second Collection Account Top-up" beginning on the May 15, 2003 payment date.
The recommencement of class A minimum principal payments resulted in
accelerated depletion of the "Second Collection Account Top-up" beginning on
the August 15, 2003 payment date and our cashflows were insufficient to
allocate any funds to the "Second Collection Account Top-up" beginning on the
December 15, 2003 payment date. Our cashflows were insufficient to pay minimum
principal on the class A notes in full beginning on that payment date and
minimum principal arrears on the class A notes were $1.0 million following the
January 15, 2004 payment date. We have continued to pay interest on the class A
notes in full. Since minimum principal on the class A notes ranks ahead of
interest and minimum principal on the class B notes and interest on the class C
and D notes in the priority of payments, our cashflows have been inadequate to
pay any interest or minimum principal on the class B notes or any interest on
the class C and D notes, beginning on the December 15, 2003 payment date.
Scheduled principal payments on the class C and D notes continue to be
deferred.

We may not be able to resume making payments of interest or principal on the
class B, C and D notes. Given our failure to pay interest when due on these
notes beginning on the December 15, 2003 payment date, interest has begun to
accrue on the unpaid interest in accordance with the terms of the notes and
will continue to accrue until all interest arrears are paid in full. Since
interest (and minimum principal) on the class A notes is payable prior to
payment of interest and minimum/scheduled principal on the class B, C and D
notes (and all other amounts of principal on the class B, C and D notes),
available cashflows will be used first to service interest and, to the extent
possible, minimum principal on the class A notes. The minimum principal arrears
on the class A notes on each payment date have been and will continue to be
carried over to the next payment date causing the amount payable to increase
over time, making it more difficult to make payments in full. Even if cash was
available at any subsequent time to make payments ranking below class A minimum
principal, cashflows would first be used to pay interest on the class B notes,
which would then include all the accrued interest from the period when no
payments were made on these notes. Thus the likelihood of remaining cashflows
over the life of Airplanes Group being sufficient to resume any payments


                                      11
<PAGE>


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.

If we were able to resume making payments on the class B, C and D notes,
payments would 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 cashflows. The more junior the class of notes is in the
order of priority, the greater the risk that we would be unable to make further
payments on that class of notes. Our failure to make payments on a class of
notes results in failure to make payments on the corresponding class of
certificates.

As a result of the continued significant downturn in the aviation market, there
has been a decline of 15.21% in the appraised value of our fleet in the year to
January 31, 2004, being $176 million greater than the decline assumed in
setting the payment schedules on our notes (see "Item 2 Management's Discussion
and Analysis of Financial Condition and Results of Operations - Comparison of
Actual Cashflows versus the 2001 Base Case"). This has resulted in an increase
in the arrears of class A principal adjustment amount at February 17, 2004 from
$343.5 million to $451.2 million. However, payments of minimum principal on the
class A notes, as discussed above, are not affected by the annual appraisals.

During September 2003, we successfully completed a solicitation of consents
from certificate holders, as announced in our Consent Solicitation Statement
dated September 5, 2003 and as explained below. Valid and binding consents to
the proposed amendments to the indentures were received from holders
representing 78% of the aggregate principal amount of the outstanding
certificates and the class E notes as of the record date. The supplemental
indentures were executed and became effective on September 23, 2003.

To retain flexibility in light of the changed circumstances, we amended 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.

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. The statement requires an assessment for impairment when an
asset's carrying value is greater than its fair value. Impairments are measured
by the excess of carrying value over fair value. For certain aircraft the
estimated discounted future cashflows were lower than the corresponding
independent appraised values. The appraised values were determined based on the
assumption that there is an "open unrestricted stable market environment with a
reasonable balance of supply and demand". Since this assumption may not be
appropriate in the current market environment, in respect of each aircraft
estimated discounted cash flows were determined as a more accurate indication
of fair value. Following consideration of


                                      12
<PAGE>


the estimated future cashflows from rentals or sales proceeds, to be generated
by our aircraft, which have decreased significantly, a SFAS 144 assessment
resulted in the requirement for an impairment provision of $111 million
(Airplanes Limited: $100 million; Airplanes Trust: $11 million) in the three
month period ended December 31, 2003.

We currently have two aircraft subject to Letter of Intent for sale for $3
million, and the sale is expected to close in the next quarter. Therefore we
have classified these aircraft as "Aircraft, Held for Sale" and they are stated
at Net Realisable Value.

There was a tax benefit in the nine months ended December 31, 2003 of $16
million which arose principally from a release of deferred tax provisions
deemed unnecessary due to losses forward and forecasted losses.

2.   Securitization Transaction

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

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

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

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

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

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


                                      13
<PAGE>


Indebtedness at December 31, 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").

3.   Contingent Liabilities

Guarantees

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

Foreign Taxation

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


The accompanying unaudited condensed interim financial statements of Airplanes
Limited and Airplanes Trust (pages 3 to 14) have been prepared in accordance
with United States generally accepted accounting principles for interim
financial information and in accordance with the requirements of this Report on
Form 10-Q. Consequently, they do not include all the disclosure normally
required by United States generally accepted accounting principles. For further
information regarding Airplanes Group and its financial condition, results of
operations and cashflows, you should refer to the audited financial statements
and notes thereto included in Airplanes Group's annual Report on Form 10-K for
the year ended March 31, 2003 previously filed with the Securities and Exchange
Commission.


                                      14
<PAGE>


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

Introduction

We are in the business of leasing aircraft to aircraft operators around the
world. At December 31, 2003, we owned 174 aircraft, 155 of which were on lease
to 59 lessees in 33 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:

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

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

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


                                      15
<PAGE>


General

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

This quarterly Report on Form 10-Q contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties. Statements in this document which
are not historical facts are hereby identified as "forward-looking statements"
for the purpose of the safe harbour provided by Section 21E of the Securities
Exchange Act of 1934 ("Exchange Act"). In most cases, you can identify these
forward looking statements by such terms as "may", "should", "expect", "plan",
"believe", "estimate", "potential", "continue" or similar terms that relate to
the future or express uncertainty. Our actual results and business experience
could differ materially from those anticipated in these forward looking
statements. In evaluating these statements, you should specifically consider
various factors, including risk factors disclosed in our Annual Report on Form
10-K for the year ended March 31, 2003.

Recent Developments

Overview

In the three month period to December 31, 2003, we have continued to suffer
from a difficult business environment. During the past three 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 war in Iraq, the
continued threat of terrorist attacks and the outbreak, in early 2003, 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 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 decreasing revenues resulting from
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, rental holidays, rental deferrals and the early


                                      16
<PAGE>


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 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 were
inadequate to pay minimum principal on the class A notes in full or to pay any
interest or minimum principal on the class B notes or any interest on the class
C and D notes, beginning on the December 15, 2003 payment date.

Specifically, as a result of the greater than expected decline in the appraised
value of the aircraft in our portfolio, we have been required to pay class A
principal adjustment amount to the extent of available cashflows in order to
maintain certain loan to current appraised value ratios. We had sufficient
cashflows to pay 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. As a result of the continued significant downturn in the
aviation market, there has been a decline of 15.21% in the appraised value of
our fleet in the year to January 31, 2004, being $176 million greater than the
decline assumed in setting the payment schedules on our notes (see - Comparison
of Actual Cashflows versus the 2001 Base Case). This has resulted in an
increase in the arrears of class A principal adjustment amount at February 17,
2004 from $343.5 million to $451.2 million. However, payments of minimum
principal on the class A notes, as discussed below, are not affected by the
annual appraisals.

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. 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. As a result of earlier
payments of class A principal adjustment amounts, described above we remained
ahead of the required class A minimum principal payment schedule. However,
since the April 15, 2003 payment date, we have not had sufficient cashflows to
pay any class A principal adjustment amount. As a result, since the payment
date on August 15, 2003 we have no longer been ahead of the required class A
minimum principal payment schedule. Therefore we had to recommence payments of
minimum principal on the class A notes to the extent of available cashflows on
that date. Insufficient cashflows also resulted in a partial depletion of the
"Second


                                      17
<PAGE>


Collection Account Top-up" beginning on the May 15, 2003 payment date. The
recommencement of class A minimum principal payments resulted in accelerated
depletion of the "Second Collection Account Top-up" beginning on the August 15,
2003 payment date and our cashflows were insufficient to allocate any funds to
the "Second Collection Account Top-up" beginning on the December 15, 2003
payment date. Our cashflows were insufficient to pay minimum principal on the
class A notes in full beginning on that payment date and minimum principal
arrears on the class A notes were $1.0 million following the January 15, 2004
payment date. We have continued to pay interest on the class A notes in full.
Since minimum principal on the class A notes ranks ahead of interest and
minimum principal on the class B notes and interest on the class C and D notes
in the priority of payments, our cashflows have been inadequate to pay any
interest or minimum principal on the class B notes or any interest on the class
C and D notes, beginning on the December 15, 2003 payment date. Scheduled
principal payments on the class C and D notes continue to be deferred.

We may not be able to resume making payments of interest or principal on the
class B, C and D notes. Given our failure to pay interest when due on these
notes beginning on the December 15, 2003 payment date, interest has begun to
accrue on the unpaid interest in accordance with the terms of the notes and
will continue to accrue until all interest arrears are paid in full. Since
interest (and minimum principal) on the class A notes is payable prior to
payment of interest and minimum/scheduled principal on the class B, C and D
notes (and all other amounts of principal on the class B, C and D notes),
available cashflows will be used first to service interest and, to the extent
possible, minimum principal on the class A notes. The minimum principal arrears
on the class A notes on each payment date have been and will continue to be
carried over to the next payment date causing the amount payable to increase
over time, making it more difficult to make payments in full. Even if cash was
available at any subsequent time to make payments ranking below class A minimum
principal, cashflows would first be used to pay interest on the class B notes,
which would then include all the accrued interest from the period when no
payments were made on these notes. Thus the likelihood of remaining cashflows
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.

If we were able to resume making payments on the class B, C and D notes,
payments would 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 cashflows. The more junior the class of notes is in the
order of priority, the greater the risk that we would be unable to make further
payments on that class of notes. Our failure to make payments on a class of
notes results 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


                                      18
<PAGE>


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.

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

                    Outstanding
                    Principal
                    Balance as
                    at January 15,                                Moody's (S&P
Certificate         2004                S & P        Fitch        equivalent)
-----------         ----                -----        -----        -----------
Subclass A-6        $114.9m             AA-          BBB-         A2 (A)
Subclass A-8        $700.0m             A            BB           Baa3 (BBB-)
Subclass A-9        $750.0m             BBB-         BB           Ba2 (BB)
Class B             $226.8m             D            CCC          Caa2 (CCC)
Class C             $349.8m             D            CCC          Caa3 (CCC-)
Class D             $395.1m             D            CC           Ca (CC)

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 had leased three MD-11 aircraft, representing
5.79% of our fleet by appraised value as of January 31, 2004, to a Latin
American lessee. The leases were due to expire between March and December 2004.
However, due to difficult trading conditions for the lessee, which was in
arrears, it was agreed with the lessee that the aircraft would be returned in
2003, and all three of these aircraft were returned. We are examining all
possibilities in respect of the remarketing of the MD-11 aircraft, including
the possibility of selling the aircraft or of converting them to freighter
aircraft. Likewise, we are examining all opportunities for our DC8-71F
aircraft, some of which are currently non revenue-earning. The current market
value of both aircraft types is significantly below their appraised values.


                                      19
<PAGE>


Aircraft Sales

Prior to the successful completion of the consent solicitation as outlined
below, our indentures restricted our ability to sell aircraft. Sales of an
aircraft were generally permitted only if the sales proceeds were 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 could not be achieved, sales were subject to,
among other conditions, a $50 million annual limit and a $500 million overall
limit (determined in each case by reference to the initial appraised value -
the appraised value of the aircraft upon its original acquisition 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 was 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 would have further declined as we
fall further behind our 2001 Base Case assumptions as to our principal
repayments. As we had already utilized the current fiscal year's $50 million
limit, and as some aircraft such as the MD-11s have initial appraised values in
excess of $50 million, it was becoming more likely that this indenture
restriction would present a real impediment to the ability of the servicer to
maximize cash flow from the portfolio. For example, it may be in our best
economic interests to sell a specific aircraft at a price below note target
price if a suitable opportunity becomes available rather than lease it or have
it non-revenue earning and requiring outlay for storage, maintenance and
insurance, yet the indentures previously prohibited this. We currently have two
aircraft subject to Letter of Intent for sale, and the sale is expected to
close in the next quarter. Therefore we have classified these aircraft as
"Aircraft, Held for Sale" and they are stated at Net Realisable Value.

Consent Solicitation for Indenture Amendment

During September 2003, we successfully completed a solicitation of consents
from certificate holders, as announced in our Consent Solicitation Statement
dated September 5, 2003 and as explained below. Valid and binding consents to
the proposed amendments to the indentures were received from holders
representing 78% of the aggregate principal amount of the outstanding
certificates and the class E notes as of the record date. The supplemental
indentures were executed and became effective on September 23, 2003.

To retain flexibility in light of the changed circumstances described above, we
amended certain provisions of the indentures:

     o    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,


                                      20
<PAGE>


          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

     o    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 the first amendment will allow us to generate some additional
cashflows in circumstances where we determine that it is in our best economic
interest to sell an aircraft. The constraints imposed by the indentures prior
to their amendment, as discussed above, restricted, or in some cases, prevented
us from selling aircraft.

We have identified at least thirty six aircraft (nine DC8-71Fs, twelve
B737-200As, five DC9-32s, three MD-11s and seven other aircraft) 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 allows 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 required that any swap
counterparty (or guarantor thereof) at the time of entry into a swap
transaction have minimum ratings. These minimum ratings were previously an A-1+
short-term unsecured debt rating by 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 was likely to be more expensive to enter into
swaps if the pool of eligible counterparties diminished 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 amendment is
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 BBB-.


                                      21
<PAGE>


Amendment to Concentration Limits

The type and age of aircraft in our portfolio means that the markets for many
of our aircraft are more likely to be in the developing markets. The indentures
contain concentration limits including with respect to the country or region
where lessees are based. We have recently sought and received rating agency
approval for three additional leases to African operators which, in the absence
of such approval, would have resulted in a breach of the approved concentration
limit for Africa of 5% by appraised value. One of these additional aircraft has
been delivered in the three months ended December 31, 2003, a second aircraft
is currently expected to be delivered in April 2004 and the lease of the third
aircraft is not now expected to proceed. Assuming the second aircraft is
delivered this would raise the total exposure in Africa to 7.04% by appraised
value as of January 31, 2004.

Remarketing

At December 31, 2003, we had 53 aircraft scheduled to be remarketed before
December 31, 2004. These comprise 4 B737-200As, 1 B737-300, 4 B737-400s, 2
B737-500s, 5 DHC8s, 8 MD-83s, 1 MD-87, 3 MD-11s, 13 DC8s, 1 A300, 2 A320s, 5
DC9s, 3 ATR42s and 1 B757-200. Furthermore, in light of negotiations with
certain lessees, we may 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 December 31, 2003 we leased 50 aircraft which represented 35.93% of our
portfolio by appraised value at January 31, 2004 to operators in Europe.

At December 31, 2003 a Turkish lessee of one A300 aircraft was in arrears.
Default notices have been issued by the servicer and discussions continue
regarding the payment of arrears.

As of December 31, 2003, the servicer has agreed a restructuring with a Spanish
lessee, representing 3.11% of our portfolio by appraised value at January 31,
2004, which resulted in reduced rentals in return for lease extensions.

North America

At December 31, 2003 we leased 20 aircraft representing 12.79% of our portfolio
by appraised value as of January 31, 2004, to operators in North America.

At December 31, 2003, we leased six aircraft, representing 6.27% of our
portfolio by appraised value as of January 31, 2004 to one Canadian lessee. The
lessee, which is still under the protection of the Companies Creditors
Arrangement Act (Canada), resumed making payments in July 2003 and continues to
do so. The


                                      22
<PAGE>


servicer has agreed a restructuring of the leases resulting in a reduction in
lease rentals. The court has approved the entry by the lessee into this
restructuring.

In the three month period ended December 31, 2003 a lessee of one aircraft
representing 0.79% of our portfolio by appraised value as of January 31, 2004
has been experiencing trading difficulties and has concluded discussions with
the servicer regarding a restructuring of the lease terms resulting in a lease
extension and rental reduction. Given the continuing financial instability of
the lessee's parent company which filed for Chapter 11 bankruptcy protection on
January 30, 2004 , this account continues to be closely monitored by the
servicer. The lessee has continued to make payments in accordance with its
lease agreement.

During the year ended March 31, 2003, the servicer lodged a claim with the
courts in connection with the receivables balance from a U.S. former lessee of
two B737-200A aircraft, representing 0.23% of our portfolio by appraised value
at January 31, 2004.

On August 11, 2002 one former lessee of one aircraft representing 0.16% of our
portfolio by appraised value as of January 31, 2004 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 December 31, 2003, lessees of 45 aircraft with respect to 16.62% of our
portfolio by appraised value as of January 31, 2004 operated in Latin America,
principally Brazil, Mexico and Colombia. The prospects for lessee operations in
these countries depend in part on the general level of political stability and
economic activity and policies in those countries. Further developments in the
political systems or economies of these countries or the implementation of
future governmental policies in these countries may materially affect these
lessees' operations.

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

A former Brazilian lessee of three MD-11 aircraft, representing 5.79% of our
portfolio by appraised value as of January 31, 2004, is currently in arrears,
due to trading difficulties. The servicer, following discussions with the
lessee agreed to the early return of the aircraft during 2003. All aircraft
have been returned. The servicer is in discussions with the lessee regarding
all outstanding amounts.

A second Brazilian lessee of eight F-100 aircraft representing 2.62% of our
portfolio by appraised value as of January 31, 2004, 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 grounded some of its F-100 fleet but has to date
continued to meet its obligations to us.


                                      23
<PAGE>


At December 31, 2003, a former Brazilian lessee of three B737-500 aircraft,
representing 2.15% of our portfolio by appraised value at January 31, 2004 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 December 31, 2003, we leased ten aircraft, representing 6.59% of our
portfolio by appraised value at January 31, 2004 to two Colombian lessees.
Continued weakness in the value of the Colombian Peso, as well as general
deterioration in the Colombian economy, may mean that these lessees will be
unable to generate sufficient revenues in the Colombian currency to pay the
U.S. dollar denominated rental payments under the leases.

At December 31, 2003, we leased six aircraft (included in the 10 aircraft
mentioned in the preceding paragraph) to one Colombian lessee, representing
5.13% of our portfolio by appraised value at January 31, 2004. 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, which is still under chapter 11 bankruptcy protection in the U.S.,
recommenced making payments in May 2003 and continues to pay. 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.

At December 31, 2003, an Antiguan lessee of five aircraft representing 0.82% of
our portfolio by appraised value as of January 31, 2004 had agreed with the
servicer to a restructuring, in which the lessee would pay its arrears over a
24 month period.

Asia and the Far East

As at December 31, 2003, we leased 30 aircraft representing 15.93% of our
portfolio by appraised value as of January 31, 2004 to 13 lessees in this
region. Since 1999, there has been some stabilization and recovery in the
economies of this region. However, 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 suffered
substantial cutbacks in the number of passengers travelling and many flight
schedules were reduced, but are now largely recovered. These factors may
adversely affect the ability of lessees in the region to make payments under
their leases.


                                      24
<PAGE>


Other

At December 31, 2003 we leased 6 aircraft representing 6.18% of our portfolio
by appraised value at January 31, 2004 to lessees in Africa and 1 aircraft
representing 0.17% of our portfolio by appraised value as of January 31, 2004
to a lessee in Australia.

We also leased 3 aircraft representing 2.30% of our portfolio by appraised
value as of January 31, 2004 to a lessee in a country not covered by the
regions already discussed.

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,
2004 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


                                      25
<PAGE>


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 Airplanes Group in the future. In addition to the ADs discussed
below, we currently expect that the FAA and other aviation authorities may
issue further ADs to improve security on aircraft.

One requirement is the installation of enhanced Ground Proximity Warning System
("GPWS") in all aircraft by 2005, which has been mandated by the FAA and the
European Joint Airworthiness Authorities. GPWS is an avionics system which
detects an aircraft's proximity to the earth. The enhanced version enables the
system to correlate the aircraft's current position with a database of
obstructions in the horizontal plane (high mountain peaks, buildings, antennae
etc). All new generation Airbus and Boeing aircraft have GPWS and require only
a software upgrade. For the majority of our aircraft, installation of GPWS will
require the full modification, some of which we expect will be completed under
cost sharing arrangements with lessees. The estimated cost to implement this
modification is $120,000 per aircraft. To the extent that compliance with this
or any further such ADs is not the responsibility of lessees under their
leases, or if the aircraft are not on lease, we may incur significant costs,
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 December 31, 2003, 29 aircraft
representing 19.42% of the portfolio by appraised value as of January 31, 2004,
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 fourteen aircraft at a cost of $6.3
million. We expect to complete the modification of a further five aircraft by
March 31, 2004 at an estimated cost of approximately $2.0 million and to modify
the remaining ten aircraft by June 30, 2005 at an estimated cost of $4.7
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 35.09% of our portfolio by appraised value at January
31, 2004, 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.

In early 2004 Boeing has discovered cracks at the lap joint areas on a number
of

                                      26
<PAGE>


B737-200/300/400/500 aircraft which were caused by scribe marks from sharp
instruments used in paint, sealant and de-cal removal. The initial reaction
from Boeing has been to require repetitive inspections of this area every 500
flight hours, however it is expected that once investigation develops a major
modification may be required to these aircraft types.

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 majority of the cost of these
modifications is expected to be covered by the manufacturer, with the operators
only being responsible for the labour costs of the modifications, estimated at
$20,000 per aircraft and is to be completed before November 2008. If the costs
are not the responsibility of some or all lessees under their leases, or if the
aircraft are not on lease, we could incur significant costs in ensuring that
our 58 Boeing 737 aircraft comply with these modifications, which could impact
adversely our results of operations.

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


                                      27
<PAGE>


Results of Operations - Three Months Ended December 31, 2003 Compared with
Three Months Ended December 31, 2002.

Airplanes Group's results for the three months ended December 31, 2003
reflected a continuation of the already apparent difficult trading conditions
for the aviation industry which gave rise to lessees seeking a variety of
rental restructurings including rental reductions and deferrals. These
restructurings will continue to have a significant adverse impact in future
periods, although various factors, including the timing of receipts and
expenditures and non-recurring items, can result in short term swings in any
particular reporting period.

Airplanes Group generated $17 million in cash from operations in the three
months ended December 31, 2003 compared to $16 million in the same period of
the previous year. The increase in cash generated from operations in the three
month period ended December 31, 2003 is primarily attributable to positive
maintenance cashflows offset by a reduction in lease revenues due to an
increased level of lease restructurings in the three months ended December 31,
2003 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 December 31, 2003 of $327 million
(Airplanes Limited: $295 million; Airplanes Trust: $32 million) compared to a
net loss after taxation for the three months ended December 31, 2002 of $238
million (Airplanes Limited: $219 million; Airplanes Trust: $19 million).
Excluding accrued but unpaid class E note interest and impairment charges, the
movement from a loss of $22 million to a loss of $36 million for the three
months ended December 31, 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 December 31, 2003 were
$62 million (Airplanes Limited: $59 million; Airplanes Trust: $3 million)
compared with $81 million (Airplanes Limited: $77 million; Airplanes Trust: $4
million) for the three months ended December 31, 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 December 31, 2003 and to the reduction in the number of aircraft on lease
in the period ended December 31, 2003 as a consequence of aircraft sales in
previous periods. At December 31, 2003, we had 155 of our 174 aircraft on lease
(Airplanes Limited: 145 aircraft; Airplanes Trust: 10 aircraft) compared to 162
of our 182 aircraft on lease (Airplanes Limited: 153 aircraft; Airplanes Trust:
9 aircraft) at December 31, 2002.

Impairment Provisions

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. The statement requires an assessment for impairment when an
asset's carrying value is greater than its fair value. For certain aircraft the
estimated discounted future cashflows were lower than the corresponding
independent


                                      28
<PAGE>


appraised values. The appraised values were determined based on the assumption
that there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". Since this assumption Impairments are measured
by the excess of carrying value over fair value. Since this assumption may not
be appropriate in the current market environment, in respect of each aircraft
estimated discounted cash flows were determined as a more accurate indication
of fair value. Following consideration of the estimated future cashflows from
rentals or sales proceeds, to be generated by our aircraft, which have
decreased significantly, as outlined above, a SFAS 144 assessment resulted in
the requirement for an impairment provision of $111 million (Airplanes Limited:
$100 million; Airplanes Trust: $11 million) in the three month period ended
December 31, 2003.

Depreciation and Amortization

The charge for depreciation and amortization in the three months ended December
31, 2003 amounted to $28 million (Airplanes Limited: $26 million; Airplanes
Trust: $2 million) as compared with $36 million (Airplanes Limited: $34
million; Airplanes Trust: $2 million) for the three months ended December 31,
2002. The reduction in the charge in the three month period ended December 31,
2003 resulted primarily from the reduced depreciable value of the fleet
following the impairment provisions made in the year ended March 31, 2003, the
quarter ended September 30, 2003 and to a lesser extent, aircraft sales in
previous periods.

Net Interest Expense

Net interest expense was $217 million (Airplanes Limited: $198 million;
Airplanes Trust: $19 million), of which $37 million related to interest on the
class A to D notes and swaps and $180 million related to interest on the class
E notes, in the three month period ended December 31, 2003 compared to $184
million (Airplanes Limited: $167 million; Airplanes Trust: $17 million), of
which $44 million related to interest on the class A to D notes and swaps and
$140 million related to interest on the class E notes, in the three month
period ended December 31, 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 $40 million, partially offset by lower average debt and
interest rates in the three months ended December 31, 2003.

The weighted average interest rate on the class A to D notes during the three
months ended December 31, 2003 was 5.87% and the average debt in respect of the
class A to D notes outstanding during the period was $2,574 million. The 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 December 31, 2002 was 6.73% and the average debt in respect of the
class A to D notes outstanding during the period was $2,652 million.

The difference for the three months ended December 31, 2003 in Airplanes
Group's net interest expense of $217 million (Airplanes Limited: $198 million;
Airplanes Trust: $19 million) and cash paid in respect of interest of $30
million (Airplanes


                                      29
<PAGE>


Limited: $28 million; Airplanes Trust: $2 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 December 31, 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 December 31, 2002 (Airplanes Limited: $1 million;
Airplanes Trust: $Nil).

Bad Debt Provisions

Airplanes Group's practice is to provide specifically for any amounts due but
unpaid by lessees based primarily on the amount due in excess of security held
and also taking into account the financial strength and condition of a lessee
and the economic conditions existing in the lessee's operating environment.
While a number of Airplanes Group's lessees failed to meet their contractual
obligations in the three month period ended December 31, 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 release of provisions
of $2 million (Airplanes Limited: $1 million; Airplanes Trust: $1 million) in
respect of bad and doubtful debts in the three months ended December 31, 2003
compared with a net release of provisions of $4 million (Airplanes Limited: $4
million; Airplanes Trust: $Nil) for the three months ended December 31, 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 December 31, 2003 amounted
to $21 million (Airplanes Limited: $19 million; Airplanes Trust: $2 million)
compared with other lease costs of $18 million (Airplanes Limited: $17 million;
Airplanes Trust: $1 million) in the three months ended December 31, 2002.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period ended
December 31, 2003 amounted to $13 million (Airplanes Limited: $12 million;
Airplanes Trust: $1 million) as compared to the expense that was incurred in
the three months ended December 31, 2002 of $10 million (Airplanes Limited: $9
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 December 31, 2003
and the three months ended December 31, 2002 include $6 million (Airplanes
Limited: $6 million; Airplanes Trust: $Nil) relating to servicing fees.


                                      30
<PAGE>


A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the three month period ended December 31,
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 December 31, 2002.

Operating Loss

The operating loss for the three months ended December 31, 2003 was $326
million (Airplanes Limited: $295 million; Airplanes Trust: $31 million)
compared with an operating loss of $238 million for the three months ended
December 31, 2002 (Airplanes Limited: $219 million; Airplanes Trust: $19
million). Airplanes Limited and Airplanes Trust are expected to continue to
report substantial losses in the future.

Taxes

There was a tax charge of $1 million (Airplanes Limited: $Nil; Airplanes Trust:
$1 million) in the three months ended December 31, 2003, as compared with no
tax benefit/provision for the three months ended December 31, 2002.

Net Loss

The net loss after taxation for the three months ended December 31, 2003 was
$327 million (Airplanes Limited: $295 million; Airplanes Trust: $32 million)
compared with a net loss after taxation for the three months ended December 31,
2002 of $238 million (Airplanes Limited: $219 million; Airplanes Trust: $19
million).

Financial Resources and Liquidity

Commentary on Statement of Cashflows

The factors discussed above at "Recent Developments" are causing a significant
reduction in our cashflows.

Liquidity

Cash balances at December 31, 2003 amounted to $95 million (Airplanes Limited:
$89 million; Airplanes Trust: $6 million) compared to cash balances at December
31, 2002 of $140 million (Airplanes Limited: $134 million; Airplanes Trust: $6
million). The principal reason for the reduction in cash balances is due to the
depletion of the "Second Collection Account Top-up" following the
recommencement of payment of class A minimum principal in August 2003.


                                      31
<PAGE>


Operating Activities

Net cash provided by operating activities in the three months ended December
31, 2003 amounted to $17 million (Airplanes Limited: $13 million; Airplanes
Trust: $4 million) compared with $16 million in the three months ended December
31, 2002 (Airplanes Limited: $15 million; Airplanes Trust: $1 million). This
includes cash paid in respect of interest of $30 million in the three months
ended December 31, 2003 (Airplanes Limited: $28 million; Airplanes Trust: $2
million) compared with $44 million in the three months ended December 31, 2002
(Airplanes Limited: $40 million; Airplanes Trust: $4 million). The increase in
cash provided by operating activities in the three month period ended December
31, 2003 is primarily attributable to positive maintenance cashflows, offset by
a reduction in lease revenues due to lease restructurings and, to a lesser
extent, greater aircraft downtime and aircraft sales in previous periods.

Investing and Financing Activities

Cashflows provided by investing activities in the three months ended December
31, 2003 were $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil). This includes proceeds of $1 million (Airplanes Limited: $1 million;
Airplanes Trust: $Nil) from the sale of one Metro III aircraft and one A300
aircraft. In the three months ended December 31, 2002, cashflows provided by
investing activities included the receipt of $1 million (Airplanes Limited: $1
million; Airplanes Trust: $Nil) in relation to the sale of one B737-200A
aircraft.

Cashflows used in financing activities in the three months ended December 31,
2003 primarily reflect the repayment of $30 million of principal on subclass
A-6 notes and class B notes by Airplanes Group (Airplanes Limited: $27 million;
Airplanes Trust: $3 million) compared with $18 million of principal repaid on
subclass A-6 notes and class B notes by Airplanes Group (Airplanes Limited: $17
million; Airplanes Trust: $1 million) in the three months ended December 31,
2002.

The increase in principal repayments is principally as a result of the
depletion of the "Second Collection Account Top-up" following the
recommencement of payment of class A minimum principal on the August 2003
payment date.

Indebtedness

Airplanes Group's indebtedness consisted of class A to E notes in the amount of
$3,144 million (Airplanes Limited: $2,861 million; Airplanes Trust: $283
million) at December 31, 2003 and $3,237 million (Airplanes Limited: $2,946
million; Airplanes Trust: $291 million) at December 31, 2002. Airplanes Group's
outstanding publicly traded class A to D notes amounted to $2,553 million
(Airplanes Limited: $2,323 million; Airplanes Trust: $230 million) at December
31, 2003 and $2,646 million (Airplanes Limited: $2,408 million; Airplanes
Trust: $238 million) at December 31, 2002. Airplanes Group had $591 million
class E notes outstanding at December 31, 2003 and December 31, 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


                                      32
<PAGE>


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

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


                                      33
<PAGE>


Results of Operations - Nine Months Ended December 31, 2003 Compared with Nine
Months Ended December 31, 2002.

Airplanes Group's results for the nine months ended December 31, 2003 reflected
a continuation of the difficult trading conditions for the aviation industry
which gave rise to lessees seeking a variety of rental restructurings including
rental reductions and deferrals. These restructurings will continue to have a
significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

Airplanes Group generated $27 million in cash from operations in the nine
months ended December 31, 2003 compared to $82 million in the same period of
the previous year. The decrease in cash generated from operations in the nine
month period ended December 31, 2003 is primarily attributable to a reduction
in lease revenues due to an increased level of lease restructurings, smaller
positive maintenance cashflows, a one time receipt of $18.5 million from one
lessee in compensation for the early redelivery of three DC8 aircraft received
in the nine months ended December 31, 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 nine months ended
December 31, 2003 of $946 million (Airplanes Limited: $861 million; Airplanes
Trust: $85 million) compared to a net loss after taxation for the nine months
ended December 31, 2002 of $518 million (Airplanes Limited: $474 million;
Airplanes Trust: $44 million). Excluding accrued but unpaid class E note
interest and impairment charges, the movement from a loss of $47 million to a
loss of $87 million for the nine months ended December 31, 2003 was primarily
attributable to a decrease in lease revenues as discussed below and reduced
interest expense.

Leasing Revenues

Leasing revenues (which include maintenance reserve receipts which we receive
from certain of our lessees) for the nine months ended December 31, 2003 were
$204 million (Airplanes Limited: $194 million; Airplanes Trust: $10 million)
compared with $283 million (Airplanes Limited: $265 million; Airplanes Trust:
$18 million) for the nine months ended December 31, 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 nine months ended
December 31, 2003 and to the reduction in the number of aircraft on lease in
the period ended December 31, 2003 as a consequence of aircraft sales in
previous periods. At December 31, 2003, we had 155 of our 174 aircraft on lease
(Airplanes Limited: 145 aircraft; Airplanes Trust: 10 aircraft) compared to 162
of our 182 aircraft on lease (Airplanes Limited: 153 aircraft; Airplanes Trust:
9 aircraft) at December 31, 2002.

Impairment Provisions

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. The statement requires an assessment for impairment when an
asset's carrying value is greater than its fair value. Impairments are measured
by the excess


                                      34
<PAGE>


of carrying value over fair value. For certain aircraft the estimated
discounted future cashflows were lower than the corresponding independent
appraised values. The appraised values were determined based on the assumption
that there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". Since this assumption may not be appropriate in
the current market environment, in respect of each aircraft estimated
discounted cash flows were determined as a more accurate indication of fair
value. Following consideration of the estimated future cashflows from rentals
or sales proceeds, to be generated by our aircraft, which have decreased
significantly, as outlined above, a SFAS 144 assessment resulted in the
requirement for an impairment provision of $350 million (Airplanes Limited:
$318 million; Airplanes Trust: $32 million) in the nine month period ended
December 31, 2003.

Depreciation and Amortization

The charge for depreciation and amortization in the nine months ended December
31, 2003 amounted to $93 million (Airplanes Limited: $88 million; Airplanes
Trust: $5 million) as compared with $107 million (Airplanes Limited: $101
million; Airplanes Trust: $6 million) for the nine months ended December 31,
2002. The reduction in the charge in the nine month period ended December 31,
2003 resulted primarily from the reduced depreciable value of the fleet
following the impairment provisions made in the year ended March 31, 2003, the
quarter ended September 30, 2003 and to a lesser extent, aircraft sales in
previous periods.

Aircraft Sales

Sales proceeds of $2 million (Airplanes Limited: $2 million, Airplanes Trust:
$Nil) in respect of the sale of one DC9-51 one A300 and three Metro III
aircraft were received in the nine month period ended December 31, 2003. The
net book value of the aircraft sold was $3 million (Airplanes Limited: $3
million, Airplanes Trust: $Nil). Aircraft sales proceeds of $5 million
(Airplanes Limited: $5 million, Airplanes Trust: $Nil) in respect of the sale
of two B737-200A aircraft and two DC9-51 aircraft were received in the nine
month period ended December 31, 2002. The net book value of the aircraft sold
was $4 million (Airplanes Limited: $4 million, Airplanes Trust: $Nil) in the
nine month period ended December 31, 2002.

Net Interest Expense

Net interest expense was $626 million (Airplanes Limited: $570 million;
Airplanes Trust: $56 million), of which $117 million related to interest on the
class A to D notes and swaps and $509 million related to interest on the class
E notes, in the nine month period ended December 31, 2003 compared to $530
million (Airplanes Limited: $482 million; Airplanes Trust: $48 million), of
which $135 million related to interest on the class A to D notes and swaps and
$395 million related to interest on the class E notes, in the nine month period
ended December 31, 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 $114 million, partially offset by lower average debt and interest
rates in the nine months ended December 31, 2003.


                                      35
<PAGE>


The weighted average interest rate on the class A to D notes during the nine
months ended December 31, 2003 was 6.06% and the average debt in respect of the
class A to D notes outstanding during the period was $2,604 million. The class
E notes together with the accrued but unpaid class E note interest, accrue
interest at a rate of 20% per annum (as adjusted by reference to the U.S.
consumer price index with effect from March 28, 1996).

The weighted average interest rate on the class A to D notes during the nine
months to December 31, 2002 was 6.86% and the average debt in respect of the
class A to D notes outstanding during the period was $2,686 million.

The difference for the nine months ended December 31, 2003 in Airplanes Group's
net interest expense of $626 million (Airplanes Limited: $570 million;
Airplanes Trust: $56 million) and cash paid in respect of interest of $108
million (Airplanes Limited: $99 million; Airplanes Trust: $9 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 nine months ended December 31, 2003, Airplanes
Group earned interest income (including lessee default interest) of $2 million
(Airplanes Limited: $2 million; Airplanes Trust: $Nil) compared with $2 million
in the nine months ended December 31, 2002 (Airplanes Limited: $2 million;
Airplanes Trust: $Nil).

Bad Debt Provisions

Airplanes Group's practice is to provide specifically for any amounts due but
unpaid by lessees based primarily on the amount due in excess of security held
and also taking into account the financial strength and condition of a lessee
and the economic conditions existing in the lessee's operating environment.
While a number of Airplanes Group's lessees failed to meet their contractual
obligations in the nine month period ended December 31, 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 nine months ended December 31, 2003 of $1
million (Airplanes Limited: $1 million; Airplanes Trust: $Nil) compared with a
net provision for the nine months ended December 31, 2002 of $3 million
(Airplanes Limited: $2 million; Airplanes Trust: $1 million).

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 nine months ended December 31, 2003 amounted
to $66 million (Airplanes Limited: $63 million; Airplanes Trust: $3 million)
compared with other lease costs of $63 million (Airplanes Limited: $58 million;
Airplanes Trust: $5 million) in the nine months ended December 31, 2002.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine month period ended
December 31, 2003 amounted to $29 million (Airplanes Limited: $27 million;


                                      36
<PAGE>


Airplanes Trust: $2 million) as compared to that incurred in the nine months
ended December 31, 2002 of $26 million (Airplanes Limited: $24 million;
Airplanes Trust: $2 million).

The most significant element of selling, general and administrative expenses is
the aircraft servicing fees paid to the servicer. Substantially all of these
amounts represent asset based fees calculated as an annual percentage of agreed
values of aircraft under management pursuant to a servicing agreement. Selling,
general and administrative expenses in the nine months ended December 31, 2003
and the nine months ended December 31, 2002 include $18 million (Airplanes
Limited: $17 million; Airplanes Trust: $1 million) relating to servicing fees.

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the nine month period ended December 31,
2003 was $4 million (Airplanes Limited: $4 million; Airplanes Trust: $Nil) in
respect of administrative agency and cash management fees payable to
subsidiaries of debis AirFinance Ireland, compared to the charge of $4 million
(Airplanes Limited: $4 million; Airplanes Trust $Nil) for the nine month period
ended December 31, 2002.

Operating Loss

The operating loss for the nine months ended December 31, 2003 was $962 million
(Airplanes Limited: $874 million; Airplanes Trust: $88 million) compared with
an operating loss of $521 million for the nine months ended December 31, 2002
(Airplanes Limited: $475 million; Airplanes Trust: $46 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 nine months ended December 31, 2003 of $16
million (Airplanes Limited: $13 million; Airplanes Trust:$3 million). This
arose principally from a release of deferred tax provisions deemed unnecessary
due to losses forward and forecasted losses. There was a tax benefit of $3
million (Airplanes Limited: $1 million; Airplanes Trust: $2 million) for the
nine months ended December 31, 2002.

Net Loss

The net loss after taxation for the nine months ended December 31, 2003 was
$946 million (Airplanes Limited: $861 million; Airplanes Trust: $85 million)
compared with a net loss after taxation for the nine months ended December 31,
2002 of $518 million (Airplanes Limited: $474 million; Airplanes Trust: $44
million).


                                      37
<PAGE>


Financial Resources and Liquidity

Commentary on Statement of Cashflows

The factors discussed above at "Recent Developments" are causing a significant
reduction in our cashflows.

Liquidity

Cash balances at December 31, 2003 amounted to $95 million (Airplanes Limited:
$89 million; Airplanes Trust: $6 million) compared to cash balances at December
31, 2002 of $140 million (Airplanes Limited: $134 million; Airplanes Trust: $6
million). The principal reason for the reduction in cash balances is due to the
depletion of the "Second Collection Account Top-up" as a result of the
reduction in our cashflows and the recommencement of payment of class A minimum
principal in August 2003.

Operating Activities

Net cash provided by operating activities in the nine months ended December 31,
2003 amounted to $27 million (Airplanes Limited: $20 million; Airplanes Trust:
$7 million) compared with $82 million in the nine months ended December 31,
2002 (Airplanes Limited: $75 million; Airplanes Trust: $7 million). This
includes cash paid in respect of interest of $108 million in the nine months
ended December 31, 2003 (Airplanes Limited: $99 million; Airplanes Trust: $9
million) compared with $136 million in the nine months ended December 31, 2002
(Airplanes Limited: $124 million; Airplanes Trust: $12 million). The decrease
in cash provided by operating activities in the nine month period ended
December 31, 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.

Investing and Financing Activities

Cashflows provided by investing activities in the nine months ended December
31, 2003 included the receipt of $2 million (Airplanes Limited: $2 million;
Airplanes Trust: $Nil) in relation to the sale of one DC9-51 aircraft, three
Metro III aircraft and one A300 aircraft. Cash provided by capital and sales
type leases was $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil). In the nine months ended December 31, 2002, cashflows provided by
investing activities included the receipt of $5 million (Airplanes Limited: $5
million; Airplanes Trust: $Nil) in relation to the sale of two B737-200A
aircraft and two DC9-51 aircraft. Cash provided by capital and sales type
leases was $2 million (Airplanes Limited: $2 million; Airplanes Trust: $Nil).

Cashflows used in financing activities in the nine months ended December 31,
2003 primarily reflect the repayment of $74 million (Airplanes Limited: $67
million; Airplanes Trust: $7 million) of principal on subclass A-6 notes and
class B notes by Airplanes Group compared with $89 million (Airplanes Limited:
$82 million;


                                      38
<PAGE>


Airplanes Trust: $7 million) of principal repaid on subclass A-6 notes and
class B notes by Airplanes Group in the nine months ended December 31, 2002.

The decrease in principal repayments is principally as a result of a decrease
in cash generated as outlined above. During the nine month period ended
December 31, 2003, Airplanes Group recommenced payment of class A minimum
principal. This, combined with the decrease in cash generated, resulted in a
depletion of the "Second Collection Account Top-up", and following the December
15, 2003 payment date the amount retained at this point in the priority of
payments was $nil which was $47.4 million short of the full amount required to
be retained at this point if sufficient cashflows were available.

Indebtedness

Airplanes Group's indebtedness consisted of class A to E notes in the amount of
$3,144 million (Airplanes Limited: $2,861 million; Airplanes Trust: $283
million) at December 31, 2003 and $3,237 million (Airplanes Limited: $2,946
million; Airplanes Trust: $291 million) at December 31, 2002. Airplanes Group's
outstanding publicly traded class A to D notes amounted to $2,553 million
(Airplanes Limited: $2,323 million; Airplanes Trust: $230 million) at December
31, 2003 and $2,646 million (Airplanes Limited: $2,408 million; Airplanes
Trust: $238 million) at December 31, 2002. Airplanes Group had $591 million
class E notes outstanding at December 31, 2003 and December 31, 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 cashflows and the low priority of step-up interest in the priority
of payments, no step-up interest has been paid.

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


                                      39
<PAGE>


Comparison of Actual Cashflows versus the 2001 Base Case for the Three Month
Period from October 9, 2003 to January 15, 2004.

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 and Reports on
Form 10-Q for the quarters ended June 30, 2003 and September 30, 2003 which are
filed with the Securities and Exchange Commission and available from
http://www.sec.gov and "Item 1. Financial Statements (Unaudited)" of this
Report on Form 10-Q.

For the purposes of this report, the "Three Month Period" comprises information
from the monthly cash reports as filed at the Securities and Exchange
Commission as Forms 8-K for the relevant months ended November 17, 2003,
December 15, 2003 and January 15, 2004. The financial data in these reports
includes cash receipts from October 9, 2003 (first day of the Calculation
Period for the November 2003 Report) up to January 9, 2004 (last day of the
Calculation Period for the January 2004 Report). Page 52 presents the
cumulative cashflow information from March 2001 to the January 2004 payment
date. This report, however, limits its commentary to the Three Month Period.

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

The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments in the Three Month Period
and should be read in conjunction with the analysis on page 51.

Cash Collections

"Total Cash Collections" include Net Lease Rental, Interest Earned, Aircraft
Sales, Net Maintenance and Other Receipts (each as defined below). In the Three
Month Period, Airplanes Group generated approximately $64.2 million in Total
Cash Collections, $34.6 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 50).


                                      40
<PAGE>


[2]  Renegotiated Leases

     "Renegotiated Leases" is a measure of the loss in rental revenue caused by
     a lessee negotiating a reduction in the lease rental, in the period to the
     original contracted expiry date of the lease prior to the renegotiation of
     the terms of that lease. In the Three Month Period, the amount of revenue
     loss attributed to Renegotiated Leases was $3.6 million, as compared to
     $Nil assumed in the 2001 Base Case. This related to renegotiations with
     three Latin American lessees, two North American lessees, two European
     lessees and two Asian lessees representing 14 aircraft in total on lease
     to these lessees at December 31, 2003 and 21.84% of our portfolio by
     appraised value at January 31, 2004 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 $32.4 million in the Three Month Period, as compared to $Nil
     assumed in the 2001 Base Case. This reflects current market conditions
     where an oversupply of aircraft has resulted in lower lease rates upon
     re-leasing or extension of leases than assumed in the 2001 Base Case.

[4]  Lease Rentals - Aircraft Sales

     "Lease Rentals - Aircraft Sales" represents rental revenue foregone in
     respect of aircraft sold prior to their assumed sale date in the 2001 Base
     Case, net of rental revenue received in respect of aircraft remaining on
     lease after their assumed sale date in the 2001 Base Case. In the 2001
     Base Case, all aircraft are assumed to be sold either at the end of their
     useful economic life or, where an aircraft was subject to a lease with the
     lease expiry date falling after the end of its useful economic life, on
     the contracted lease expiry date. Since March 2001, three DC9-51 aircraft,
     one DC9-32 aircraft, one DC8-71F aircraft, two B727-200A aircraft, two
     B737-200A aircraft, three Metro-III aircraft and one A300-B4-200 aircraft
     have been sold prior to their assumed sale date in the 2001 Base Case,
     resulting in a negative variance of $1.9 million in lease rentals compared
     to the 2001 Base Case in the Three Month Period. Lease rentals totaling
     $0.2 million were received in the Three Month Period in respect of three
     DC9-32 aircraft which have remained on lease after their assumed sale date
     in the 2001 Base Case.


                                      41
<PAGE>


[5]  Contracted Lease Rentals

     "Contracted Lease Rentals" represents the current contracted lease rental
     rollout which is equal to the 2001 Base Case Lease Rentals less
     adjustments for Renegotiated Leases, Rental Resets and Lease Rentals -
     Aircraft Sales. For the Three Month Period, Contracted Lease Rentals were
     $65.5 million, which was $37.7 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 $3.8 million in the Current Arrears
     balance over the Three Month Period, as compared to $Nil assumed in the
     2001 Base Case.

[7]  Net Stress-Related Costs

     "Net Stress-Related Costs" is a combination of all the factors which can
     cause actual lease rentals to vary from the Contracted Lease Rentals. The
     2001 Base Case assumed Net Stress-Related Costs equal to 6.0% of the 2001
     Base Case Lease Rentals in the Three Month Period. Net Stress-Related
     Costs incurred in the Three Month Period amounted to a net cash outflow of
     $17.0 million (16.5% of Lease Rentals) compared to $6.1 million outflow
     assumed in the 2001 Base Case, a variance of $10.9 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 $1.9 million (1.8% of Lease Rentals)
     for the Three Month Period as compared to the 2001 Base Case assumption of
     $1.0 million (1.0% of Lease Rentals).

[9]  Deferred Arrears Balance

     "Deferred Arrears Balance" refers to current arrears that have been
     capitalized and restructured into a deferred balance. In the Three Month
     Period, Airplanes Group received payments totaling $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 Three Month Period.


                                      42

                                       1
<PAGE>


[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-five aircraft AOG at various times during the Three Month Period
     and at December 31, 2003, nineteen aircraft were AOG, two of which were
     subject to a letter of intent for sale and one of which was subject to a
     letter of intent for lease. In the Three Month Period, the 2001 Base Case
     Lease Rentals loss attributed to AOG was $15.3 million (14.8% of Lease
     Rentals), as compared to $4.3 million (4.2% of Lease Rentals) assumed
     under the 2001 Base Case.

[11] Other Leasing Income

     "Other Leasing Income" consists of miscellaneous income received in
     connection with a lease other than contracted rentals, maintenance
     receipts and security deposits, such as early termination payments or
     default interest. In the Three Month Period, Other Leasing Income amounted
     to $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 Three Month Period,
     Repossession Costs amounted to $Nil, as compared to $0.8 million (0.8% of
     Lease Rentals) assumed under the 2001 Base Case.

[14] Net Lease Rental

     "Net Lease Rental" is Contracted Lease Rentals less any movement in
     Current Arrears balance and Net Stress-Related Costs. In the Three Month
     Period, Net Lease Rental amounted to $52.3 million, $44.8 million less
     than that assumed in the 2001 Base Case. The variance was attributable to
     the combined effect of the factors outlined in items [2] to [4] and in
     items [6] to [12] above.

[15] Interest Earned

     "Interest Earned" relates to interest received on cash balances held in
     the Collection and Expense Accounts. Cash held in the Collection Account
     consists of the cash liquidity reserve amount ($80 million plus the
     security deposit amount, subject to available cashflows), in addition to
     the intra-month cash balances for all the rentals and maintenance payments
     collected prior to the monthly payment date. The Expense Account contains
     cash set aside to pay for expenses which are expected to be payable over
     the next month. In the Three Month Period, Interest Earned amounted to
     $0.3 million, $1.4 million less than that assumed in the 2001 Base Case.
     The difference is due to a lower cash balance in the Collection Account as
     a result of a shortfall in the cash liquidity reserve amount (refer to
     item 29A below) and a lower average reinvestment rate than assumed in the
     2001 Base Case. The average actual reinvestment rate for the Three Month
     Period was 1.0% (excluding a $5 million guaranteed investment contract) as
     compared to the 5.2% assumed in the 2001 Base Case.


                                      43

                                       2
<PAGE>


[16] Aircraft Sales

     Aircraft sales proceeds totaling $0.5 million were received in the Three
     Month Period in respect of the sale of one A300-B4-200 aircraft. In the
     2001 Base Case, aircraft sales proceeds were assumed to be $Nil for the
     Three Month Period. In the 2001 Base Case all aircraft are assumed to be
     sold either at the end of their useful economic life or, where an aircraft
     was subject to a lease with the lease expiry date 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 Three Month Period,
     positive net maintenance cashflows of $11.1 million were received. The
     2001 Base Case makes no assumptions for Net Maintenance as it assumes
     that, over time, maintenance revenue will equal maintenance expenditure.
     However, it is unlikely that in any particular reporting period,
     maintenance revenue will exactly equal maintenance expenses.

CASH EXPENSES

"Total Cash Expenses" include Aircraft Operating Expenses and Selling, General
and Administrative ("SG&A") Expenses. In the Three Month Period, Total Cash
Expenses were $14.6 million compared to $13.5 million assumed in the 2001 Base
Case, a negative variance of $1.1 million. A number of factors discussed below
have given rise to this.

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

[20] Re-Leasing and Other Overhead Costs

     "Re-Leasing and Other Overhead Costs" consist of miscellaneous re-delivery
     and leasing costs associated with re-leasing events, costs of insurance
     and other lessee-related overhead costs. In the Three Month Period, these
     costs amounted to $5.8 million (or 5.6% of Lease Rentals) compared to $5.2
     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.


                                      44
<PAGE>


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

[21] Aircraft Servicer Fees

     "Aircraft Servicer Fees" are defined as amounts paid to the servicer in
     accordance with the terms of the servicing agreement. In the Three Month
     Period, the total Aircraft Servicer Fees paid were $5.7 million, as
     compared to $5.9 million assumed in the 2001 Base Case.

       Aircraft Servicer Fees consist of:
                                                                           $M
                                                                           --
       Retainer Fee........................................................5.7
       Minimum Incentive Fee...............................................0.0
       Core Cashflow/Sales Incentive Fee...................................0.0
                                                                           ---
       Total Aircraft Servicer Fee.........................................5.7
                                                                           ===

     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 Three Month Period, Other Servicer
     Fees and Other Overheads amounted to $2.9 million, $0.5 million higher
     than an assumed expense of $2.4 million in the 2001 Base Case.

[23A] Other SG&A Expenses

     "Other SG&A Expenses" relate to costs of $0.2 million incurred in the
     Three Month Period in connection with the consent solicitation for
     amendments to the indentures, which was not anticipated under the 2001
     Base Case.

[29A] Shortfall in Liquidity Reserve

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

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

     -    a security deposit reserve amount.

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


                                      45

                                       3
<PAGE>


     "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
     priority of payments applicable to Airplanes Group. Since the May 2003
     payment date there has been a depletion of the "Second Collection Account
     Top-up" and beginning on the December 15, 2003 payment date cashflows have
     been insufficient to allocate any funds to the "Second Collection Account
     Top-up". On the January 15, 2004 payment date, there was a shortfall in
     the liquidity reserve amount of $48.1 million as compared to a shortfall
     of $31.4 million on the October 15, 2003 payment date, representing an
     overall increase of $16.7 million in the Shortfall in Liquidity Reserve
     for the Three Month Period. Under the 2001 Base Case, a Shortfall in
     Liquidity Reserve was not anticipated.

[30] Interest Payments

     In the Three Month Period, interest payments to the holders of the class
     A, B, C and D notes amounted to $12.8 million which is $29.8 million lower
     than assumed under the 2001 Base Case.

     Interest payments on the floating rate class A notes were $14.8 million
     lower than assumed under the 2001 Base Case, reflecting a lower than
     expected level of average interest rates on the floating rate notes, the
     impact of which was partly offset by a higher principal balance
     outstanding on these notes than assumed in the 2001 Base Case. The 2001
     Base Case assumed LIBOR to be 5.2% whereas the average monthly LIBOR rate
     in the Three Month Period was 1.1%. Interest payments on the floating rate
     class B notes were $3.1 million lower than assumed under the 2001 Base
     Case as a result of the failure to make any interest payments on these
     notes on the December 2003 and January 2004 payment dates and the lower
     than expected level of average interest rates on the floating rate notes.
     Interest payments on the fixed rate class C and D notes were $4.7 million
     and $7.2 million lower than assumed under the 2001 Base Case respectively
     as a result of the failure to make any interest payments on these notes on
     the December 2003 and January 2004 payment dates. Interest has begun to
     accrue on the unpaid interest on the class B, C and D notes in accordance
     with the terms of these notes and will continue to accrue until the
     arrears of interest are paid in full. Accrued and unpaid interest
     (including interest accrued on unpaid interest) amounted to $0.7 million,
     $4.8 million and $7.2 million respectively on the class B, C and D notes
     following the January 15, 2004 payment date.

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

     Airplanes Group's $700 million subclass A-8 notes had an expected final
     payment date of March 15, 2003. Given current market conditions and the
     impact these conditions have had on our performance, we believed that such
     a


                                      32
<PAGE>


     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 priority of payments applicable to Airplanes
     Group, step-up interest is payable after payment of expenses, interest,
     minimum principal and scheduled principal on class A, B, C and D notes and
     any aircraft modification payments. To the extent that step-up interest is
     not paid, it will accrue in accordance with the terms of the subclass A-8
     notes. Available cashflows have not been sufficient to allow payment of
     step-up interest on any of the payment dates since March 2003 and this is
     expected to continue to be the case. Total step-up interest (including
     interest accrued on unpaid step-up interest) accrued and unpaid on the
     subclass A-8 notes at January 15, 2004 was $3.0 million.

[31] Swap and Swaption Cashflows

     Airplanes Group's net swap payments during the Three Month Period were
     $11.1 million higher than the $0.7 million assumed in the 2001 Base Case
     due to lower than anticipated interest rates.

[33] Principal Payments

     In the thirty-four month period from March 10, 2001 to January 15, 2004,
     total principal payments amounted to $382.0 million (comprising $330.5
     million on the class A notes and $51.5 million on the class B notes),
     $124.9 million less than assumed in the 2001 Base Case. The breakdown of
     the $124.9 million variance is set out on page 52. In the Three Month
     Period, total principal payments amounted to $44.7 million, (comprising
     $43.0 million on the class A notes and $1.7 million on the class B notes),
     $2.7 million higher than assumed in the 2001 Base Case. The breakdown of
     the $2.7 million variance is set out on page 51.

     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 $2,857.0 million
     at January 15, 2004. Our portfolio is appraised annually and the most
     recent appraisal prior to the January 15, 2004 payment date was obtained
     on January 31, 2003 and valued the current portfolio at $2,413.9 million.
     Applying the declining value assumptions to this appraisal, the total
     appraised value was $2,248.8 million at January 15, 2004.

     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 thirty-four 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


                                      47

                                       4
<PAGE>


     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 cashflows were not sufficient to pay all of
     the class A principal adjustment amount, scheduled principal payments on
     the class C and D notes have been deferred on each payment date during the
     thirty-four month period. Total deferrals of class C and class D scheduled
     principal amounts amounted to $73.0 million and $45.0 million respectively
     as of January 15, 2004. The class A principal adjustment amount
     outstanding was $333.9 million as of January 15, 2004.

     Based on the most recent annual appraisal dated January 31, 2004, the
     decline in the aircraft valuations in the year to the February 2004
     payment date was approximately $176 million more than the decline assumed
     in the 1996 Base Case. The decline in appraised values in this period has
     resulted in an increase in the class A principal adjustment amount at the
     February 17, 2004 payment date from $343.5 million to $451.2 million.
     However, payment of minimum principal on the class A notes, as discussed
     below, is not affected by the annual appraisals.

     To the extent that we have sufficient available funds, we are required to
     pay a minimum principal amount on the class A and B notes in order to
     maintain certain loan to initial appraised value ratios. As a result of
     earlier payments of class A principal adjustment amounts, described above,
     we remained ahead of the required class A minimum principal payment
     schedule. However, we have not always had sufficient cashflows to pay
     class A principal adjustment amounts in full and since the April 15, 2003
     payment date, we have not had sufficient cashflows to pay any class A
     principal adjustment amount. As a result, since the August 15, 2003
     payment date we have no longer been ahead of the required class A minimum
     principal payment schedule. Therefore we had to recommence payments of
     minimum principal on the class A notes to the extent of available
     cashflows on that date. Our cashflows were insufficient to pay minimum
     principal on the class A notes in full beginning on the December 15, 2003
     payment date and minimum principal arrears on the class A notes were $1.0
     million following the January 15, 2004 payment date. Since minimum
     principal on the class A notes ranks ahead of interest and minimum
     principal on the class B notes and interest on the class C and D notes in
     the priority of payments, our cashflows have been inadequate to pay any
     interest or minimum principal on the class B notes or any interest on the
     class C and D notes, beginning on the December 15, 2003 payment date.
     Minimum principal arrears on the class B notes were $3.7 million as of
     January 15, 2004.

     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


                                      48

                                       5
<PAGE>


     obtain the appraised value upon sale of any aircraft, since we might sell
     at a low point in the business cycle and since 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."


                                      49
<PAGE>


<TABLE>
Note                      Report Line Name                 Description
----                      ----------------                 -----------
<S>                       <C>                              <C>
                          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]  S [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] S [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] S [14]...[18]        Total Cash Collections.........  Net Lease Rental + Interest Earned + Aircraft Sales + Net
                                                           Maintenance + Other Receipts

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

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

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


                                      50
<PAGE>


    Airplanes Group Cashflow Performance for the Period from October 9, 2003
   to January 15, 2004 (3 Months) Comparison of Actual Cashflows versus 2001
                              Base Case Cashflows

<TABLE>
                                                                                     % of Lease Rentals under
                                                                                     the 2001 Base Case
                                                               2001                             2001
                                                    Actual   Base Case   Variance    Actual   Base Case   Variance
                                                    ------   ---------   --------    ------   ---------   --------
<S>             <C>                                 <C>      <C>          <C>         <C>      <C>         <C>
                CASH COLLECTIONS                       $M       $M          $M

1               Lease Rentals                        103.2     103.2        0.0      100.0%      100.0%     0.0%
2               - Renegotiated Leases                 (3.6)      0.0       (3.6)      (3.5%)       0.0%    (3.5%)
3               - Rental Resets                      (32.4)      0.0      (32.4)     (31.4%)       0.0%   (31.4%)
4               - Lease Rentals - Aircraft Sales      (1.7)      0.0       (1.7)       (1.6%)      0.0%    (1.6%)
                                                      ----      ----       ----       ----        ----     ----

5     S 1 - 4   Contracted Lease Rentals              65.5     103.2      (37.7)      63.5%      100.0%   (36.5%)
6               Movement in Current Arrears            3.8       0.0        3.8        3.7%        0.0%     3.7%
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                           (1.9)     (1.0)      (0.9)      (1.8%)      (1.0%)   (0.9%)
9               - Deferred Arrears Balance             0.1       0.0        0.1        0.1%        0.0%     0.1%
10              - AOG                                (15.3)     (4.3)     (11.0)     (14.8%)      (4.2%)  (10.7%)
11              - Other Leasing Income                 0.1       0.0        0.1        0.1%        0.0%     0.1%
12              - Repossession                         0.0      (0.8)       0.8        0.0%       (0.8%)    0.8%
                                                      ----      ----       ----       ----        ----     ----
13    S 8 - 12  Sub-total                            (17.0)     (6.1)     (10.9)     (16.5%)      (6.0%)  (10.6%)
14    5+6+13    Net Lease Rental                      52.3      97.1      (44.8)      50.7%       94.1%   (43.4%)
15              Interest Earned                        0.3       1.7       (1.4)       0.3%        1.6%    (1.4%)
16              Aircraft Sales                         0.5       0.0        0.5        0.5%        0.0%     0.5%
17              Net Maintenance                       11.1       0.0       11.1       10.8%        0.0%    10.8%
18              Other Receipts                         0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                      ----      ----       ----       ----        ----     ----
19    S 14 - 18 Total Cash Collections                64.2      98.8      (34.6)      62.2%       95.7%   (33.5%)
                                                      ====      ====       ====       ====        ====     ====

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads      (5.8)    (5.2)      (0.6)      (5.6%)      (5.0%)   (0.6%)

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                        (5.7)     (5.5)      (0.2)      (5.5%)      (5.3%)   (0.2%)
                - Minimum Incentive Fee                0.0      (0.4)       0.4        0.0%       (0.4%)    0.4%
                - Core Cashflow/Sales Incentive Fee    0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                      ----      ----       ----       ----        ----     ----
22       21     Sub-total                             (5.7)     (5.9)       0.2       (5.5%)      (5.7%)    0.2%
23              Other Servicer Fees and Other         (2.9)     (2.4)      (0.5)      (2.8%)      (2.3%)   (0.5%)
                Overheads
23A             Other SG&A Expenses                   (0.2)      0.0       (0.2)      (0.2%)       0.0%    (0.2%)
                                                      ----      ----       ----       ----        ----     ----
24    22+23+23A Sub-total                             (8.8)     (8.3)      (0.5)      (8.5%)      (8.0%)   (0.5%)
25     24+20    Total Cash Expenses                  (14.6)    (13.5)      (1.1)     (14.1%)     (13.1%)   (1.1%)
                                                      ====      ====       ====       ====        ====     ====

                NET CASH COLLECTIONS
26       19     Total Cash Collections                64.2      98.8      (34.6)      62.2%       95.7%   (33.5%)
27       25     Total Cash Expenses                  (14.6)    (13.5)      (1.1)     (14.1%)     (13.1%)   (1.1%)
28              Movement in Expense Account            3.0       0.0        3.0        2.9%        0.0%     2.9%
29              Reduction in Liquidity Reserve         0.0       0.0        0.0        0.0%        0.0%     0.0%
29A             Shortfall in Liquidity Reserve        16.7       0.0       16.7       16.2%        0.0%    16.2%
30              Interest Payments                    (12.8)    (42.6)      29.8      (12.4%)     (41.3%)   28.9%
31              Swap Payments                        (11.8)     (0.7)     (11.1)     (11.4%)      (0.7%)  (10.8%)
                                                      ----      ----       ----       ----        ----     ----
32    S 26 - 31 TOTAL                                 44.7      42.0        2.7       43.3%       40.7%     2.6%
                                                      ====      ====       ====       ====        ====     ====

33              PRINCIPAL PAYMENTS
                Subclass A-6                          43.0      36.8        6.2       41.7%       35.7%     6.0%
                Class B                                1.7       5.2       (3.5)       1.6%        5.0%    (3.4%)
                                                      ----      ----       ----       ----        ----     ----
                Total                                 44.7      42.0        2.7       43.3%       40.7%     2.6%
                                                      ====      ====       ====       ====        ====     ====


                Debt Balances at January 15, 2004
                Subclass A-6                          114.9      0.0
                Subclass A-8                          700.0    700.0
                Subclass A-9                          750.0    741.9
                Class B                               226.8    224.9
                Class C                               349.8    349.8
                Class D                               395.1    395.1
                                                    -------  -------
                                                    2,536.6  2,411.7
                                                    =======  =======
</TABLE>


                                      51
<PAGE>


   Airplanes Group Cashflow Performance for the Period from March 10, 2001 to
    January 15, 2004 (34 Months) Comparison of Actual Cashflows versus 2001
                              Base Case Cashflows

<TABLE>
                                                                                   % of Lease Rentals under
                                                                                      the 2001 Base Case
                                                               2001                            2001
                                                    Actual   Base Case   Variance   Actual   Base Case   Variance
                                                    ------   ---------   --------   ------   ---------   --------
                CASH COLLECTIONS                      $M         $M        $M
<S>             <C>                                <C>        <C>        <C>       <C>        <C>        <C>
1               Lease Rentals                      1,190.7    1,190.7       0.0    100.0%     100.0%       0.0%
2               - Renegotiated Leases                (76.4)       0.0     (76.4)    (6.4%)      0.0%      (6.4%)
3               - Rental Resets                     (186.5)       0.0    (186.5)   (15.7%)      0.0%     (15.7%)
4               - Lease Rentals - Aircraft Sales      (8.7)       0.0      (8.7)    (0.7%)      0.0%      (0.7%)
                                                     -----      -----    ------     ----       ----      -----

5     S 1 - 4   Contracted Lease Rentals             919.1    1,190.7    (271.6)    77.2%     100.0%     (22.8%)
6               Movement in Current Arrears            1.1        0.0       1.1      0.1%       0.0%       0.1%
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                          (10.1)     (11.9)      1.8     (0.8%)     (1.0%)      0.2%
9               - Deferred Arrears Balance             7.2        3.1       4.1      0.6%       0.3%       0.3%
10              - AOG                                (86.2)     (50.1)    (36.1)    (7.2%)     (4.2%)     (3.0%)
11              - Other Leasing Income                12.1        0.0      12.1      1.0%       0.0%       1.0%
12              - Repossession                        (4.1)      (9.6)      5.5     (0.3%)     (0.8%)      0.5%
                                                     -----      -----    ------     ----       ----      -----
13     S 8 - 12 Sub-total                            (81.1)     (68.5)    (12.6)    (6.8%)     (5.8%)     (1.1%)
14    5+6+13    Net Lease Rental                     839.1    1,122.2    (283.1)    70.5%      94.2%     (23.8%)
15              Interest Earned                        9.2       19.6     (10.4)     0.8%       1.6%      (0.9%)
16              Aircraft Sales                        29.4       29.3       0.1      2.5%       2.5%       0.0%
17              Net Maintenance                       62.0        0.0      62.0      5.2%       0.0%       5.2%
18              Other Receipts                         8.3        0.0       8.3      0.7%       0.0%       0.7%
                                                     -----      -----    ------     ----       ----      -----
19    S 14 - 18 Total Cash Collections               948.0    1,171.1    (223.1)    79.6%      98.4%     (18.7%)
                                                     =====      =====    ======     ====       ====      =====

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads     (65.9)     (59.7)     (6.2)    (5.5%)     (5.0%)     (0.5%)

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                       (63.2)     (63.3)      0.1     (5.3%)     (5.3%)      0.0%
                - Minimum Incentive Fee               (4.5)      (4.3)     (0.2)    (0.4%)     (0.4%)      0.0%
                - Core Cashflow/Sales Incentive Fee   (0.2)       0.0      (0.2)     0.0%       0.0%       0.0%
                                                     -----      -----    ------     ----       ----      -----
22       21     Sub-total                            (67.9)     (67.6)     (0.3)    (5.7%)     (5.7%)      0.0%
23              Other Servicer Fees and Other        (30.9)     (28.8)     (2.1)    (2.6%)     (2.4%)     (0.2%)
                Overheads
23A             Other SG&A Expenses                   (2.0)      (4.7)      2.7     (0.2%)     (0.4%)      0.2%
                                                     -----      -----    ------     ----       ----      -----
24    22+23+23A Sub-total                           (100.8)    (101.1)      0.3     (8.5%)     (8.5%)      0.0%
                                                     -----      -----    ------     ----       ----      -----

25     24+20    Total Cash Expenses                 (166.7)    (160.8)     (5.9)   (14.0%)    (13.5%)     (0.5%)
                                                     =====      =====    ======     ====       ====      =====

                NET CASH COLLECTIONS
26       19     Total Cash Collections               948.0    1,171.1    (223.1)    79.6%      98.4%     (18.7%)
27       25     Total Cash Expenses                 (166.7)    (160.8)     (5.9)   (14.0%)    (13.5%)     (0.5%)
28              Movement in Expense Account           (6.5)       0.0               (0.5%)      0.0%      (0.5%)
                                                                        (6.5)
29              Reduction in Liquidity Reserve        40.0       40.0       0.0      3.4%       3.4%       0.0%
29A             Shortfall in Liquidity Reserve        48.1        0.0      48.1      4.0%       0.0%       4.0%
30              Interest Payments                   (338.5)    (515.6)    177.1    (28.4%)    (43.3%)     14.9%
5.1             Swap Payments                       (142.4)     (27.8)   (114.6)   (12.0%)     (2.3%)     (9.6%)
                                                     -----      -----    ------     ----       ----      -----
32    S 26 - 31 TOTAL                                382.0      506.9    (124.9)    32.1%      42.6%     (10.5%)
                                                     =====      =====    ======     ====       ====      =====

33              PRINCIPAL PAYMENTS
                Subclass A-6                         330.5      453.5    (123.0)    27.8%      38.1%     (10.3%)
                Class B                               51.5       53.4      (1.9)     4.3%       4.5%      (0.2%)
                                                     -----      -----    ------     ----       ----      -----
                Total                                382.0      506.9    (124.9)    32.1%      42.6%     (10.5%)
                                                     =====      =====    ======     ====       ====      =====

                Debt Balances at January 15, 2004
                Subclass A-6                         114.9        0.0     114.9
                Subclass A-8                         700.0      700.0       0.0
                Subclass A-9                         750.0      741.9       8.1
                Class B                              226.8      224.9       1.9
                Class C                              349.8      349.8       0.0
                Class D                              395.1      395.1       0.0
                                                   -------    -------     -----
                                                   2,536.6    2,411.7     124.9
                                                   =======    =======     =====
</TABLE>


                                      52
<PAGE>


<TABLE>
                                                      Mar-01                                2001
                                                     Closing          Actual           Base Case
                                                     -------          ------           ---------
                                                          $m              $m                  $m
<S>                                                  <C>              <C>              <C>
      Net Cash Collections                                             382.0               506.9

      Add Back Interest and Swap Payments                              480.9               543.4
                                                                       -----             -------

  a   Net Cash Collections
      (excl. interest and swap payments)                               862.9             1,050.3
                                                                       -----             -------
  b   Swaps                                                            142.4                27.8
  c   Class A Interest                                                 127.4               269.7
  d   Class A Minimum                                                   75.6                 0.0
  e   Class B Interest                                                  20.5                43.4
  f   Class B Minimum                                                   51.5                53.4
  g   Class C Interest                                                  76.0                80.8
  h   Class D Interest                                                 114.6               121.7
  i   Class A Principal Adjustment                                     254.9               453.5
  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                                                            862.9             1,050.3
                                                                       =====             =======

 [1]  Interest Coverage Ratio
      Class A                                                            3.2                 3.5  = a/(b+c)
      Class B                                                            N/A                 3.1  = a/(b+c+d+e)
      Class C                                                            N/A                 2.2  = a/(b+c+d+e+f+g)
      Class D                                                            N/A                 1.8  = a/(b+c+d+e+f+g+h)

 [2]  Debt Coverage Ratio
      Class A                                                            N/A                 3.5  = a/(b+c+d)
      Class B                                                            N/A                 2.7  = 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         2,248.8             2,574.5
      Liquidity Reserve Amount
      Of which - Cash                                  156.9            60.0               116.0
               - Accrued Expenses                       12.6            11.0                 0.0
                                                     -------         -------             -------
      Subtotal                                         169.5            71.0               116.0
      Less Lessee Security Deposits                     36.9             0.0                36.0
                                                     -------         -------             -------
      Subtotal                                         132.6            71.0                80.0
                                                     -------         -------             -------
 [4]  Total Asset Value                              3,241.2         2,319.8             2,654.5
                                                     =======         =======             =======


Note Balances as at:                                 March 15, 2001   Jan 15, 2004      Jan 15, 2004
--------------------                                 --------------   ------------      ------------


      Class A                                        1,895.4  58.5%   1,564.9   67.5%   1,441.9  54.3%
      Class B                                          278.3  67.1%     226.8   77.2%     224.9  62.8%
      Class C                                          349.8  77.9%     349.8   92.3%     349.8  76.0%
      Class D                                          395.1  90.0%     395.1  109.3%     395.1  90.9%
                                                     -------          -------           -------
                                                     2,918.6          2,536.6           2,411.7
                                                     =======          =======           =======
</TABLE>


                                      53
<PAGE>


[1]  "Interest Coverage Ratio" is equal to Net Cash Collections (excluding
     interest and swap payments) expressed as a ratio of the interest payments
     payable on each subclass of notes plus the interest and minimum principal
     payments payable on each subclass of notes that rank senior in priority of
     payment to the relevant subclass of notes. Actual Interest Coverage Ratios
     have not been provided for the class B, C and D notes as interest amounts
     were not paid on these notes on the December 2003 and January 2004 payment
     dates.

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

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

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


                                      54
<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risks

Interest Rate Sensitivity

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

The terms of each subclass or class of notes, including the outstanding
principal amount as of December 31, 2003 and estimated fair value as of
December 31, 2003, are as follows:

<TABLE>
                     Annual Interest   Principal Amount                    Estimated Fair
                          Rate         at December 31,       Final          Value at
    Class of Notes  (Payable Monthly)        2003        Maturity Date  December 31, 2003*
    --------------  -----------------  ----------------  -------------  ------------------
                                           $ Million                         $ Million
<S>                  <C>                    <C>          <C>                   <C>
    Subclass A-6    (LIBOR+.34%)               131       March 15, 2019          128
    Subclass A-8    (LIBOR+.375%)              700       March 15, 2019          578
    Subclass A-9    (LIBOR+.55%)               750       March 15, 2019          525
    Class B         (LIBOR+.75%)               227       March 15, 2019           45
    Class C         (8.15%)                    350       March 15, 2019           30
    Class D         (10.875%)                  395       March 15, 2019            8
                                             2,553                             1,314
</TABLE>

---------
* Although the estimated fair values of the class A to D notes outstanding have
been determined by reference to prices as at December 31, 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 98% of our portfolio by appraised value as of
January 31, 2004 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


                                      55

                                       6
<PAGE>


class A and class B notes, the expiry dates of the leases under which lessees
are contracted to make fixed rate rental payments and the LIBOR reset dates
under the floating rate leases. At least every three months, and in practice
more frequently, debis AirFinance Financial Services (Ireland) Limited, a
subsidiary of debis AirFinance Ireland, as Airplanes Group's administrative
agent (the "Administrative Agent"), seeks to enter into additional swaps or
sell at market value or unwind part or all of the swaps and any future swaps in
order to rebalance the 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 do not anticipate making any further payments of
interest on these notes and certificates, having ceased payments beginning on
the December 15, 2003 payment date. 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. Beginning on the
December 15, 2003 payment date, the "Second Collection Account Top-up" was
depleted to $nil and we expect our future 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 December 31, 2003, Airplanes Group had unamortized swaps with an aggregate
notional principal balance of $1,585 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 December 31, 2003 was
($49.8) million, that is the swaps were "out-of-the-money", such that if sold,
Airplanes Group would incur a loss of $49.8 million, as detailed below:

                 Airplanes Group Swap Book at December 31, 2003

           Notional                  Final         Fixed        Estimated Fair
  Swap    Amount (i)   Effective    Maturity       Rate        Market Value ($)
  No.     $'millions     Date         Date     Payable (ii)   as at Dec 31, 2003
   1          15       15-May-00   15-Jan-04      7.2995%            (79,235)
   2           5       26-Jun-00   15-Feb-04      6.9775%            (50,225)
   3          35       15-Aug-00   15-Feb-04      6.7700%           (350,059)
   4          35       15-Jul-03   15-Mar-04      0.9700%             18,914
   5          270      15-Sep-03   15-Mar-04      1.2075%            (19,050)
   6          10       18-Aug-00   15-Apr-04      6.7700%           (189,475)
   7          15       15-Nov-01   15-Apr-04      4.8900%           (159,772)
   8          20       30-Apr-02   15-Apr-04      3.3700%           (148,947)
   9          25       15-Aug-02   15-Apr-04      2.1600%            (72,653)
   10         25       17-Apr-01   15-May-04      6.8290%           (503,484)
   11         20       12-Oct-00   15-Jul-04      6.5850%           (506,398)
   12         65       17-Jun-02   15-Jul-04      3.7700%           (981,263)
   13         35       17-Sep-01   15-Sep-04      5.7125%         (1,186,971)
   14         30       17-Jun-02   15-Oct-04      3.5800%           (579,586)
   15         30       15-Jul-03   15-Nov-04      5.7650%         (1,082,209)
   16         15       15-Apr-02   15-Dec-04      5.3975%           (710,221)


                                      56

                                       7
<PAGE>


   17         30       15-Apr-03   15-Dec-04      4.2350%           (708,296)
   18         45       15-May-01   15-Jan-05      4.7950%         (1,503,270)
   19         50       21-Aug-01   15-Feb-05      4.4195%         (1,951,977)
   20          0       15-Oct-04   17-Oct-05      4.5650%           (294,804)
   21         45       17-Oct-01   15-Nov-05      3.9475%         (1,201,504)
   22         95       24-Jul-01   15-Dec-05      5.2850%         (5,547,847)
   23         30       17-Nov-03   17-Jan-06      5.1150%         (1,360,411)
   24         285      20-Dec-01   15-Feb-06      4.6350%         (7,357,798)
   25         10       15-May-03   15-Mar-06      2.8800%           (253,860)
   26         40       30-Jan-02   15-Apr-06      3.5040%           (796,315)
   27         90       15-Mar-02   15-Apr-06      4.0125%         (2,356,484)
   28         30       15-Dec-03   18-Apr-06      2.9425%           (436,046)
   29         55       15-Aug-02   15-Jul-06      5.5500%         (8,382,860)
   30          0       17-Oct-05   15-Oct-06      4.9400%           (118,533)
   31          0       15-Jul-04   15-May-07      5.8620%         (6,024,597)
   32          0       15-Mar-04   15-May-07      5.2020%         (3,029,208)
   33         60       15-Apr-03   15-May-07      3.5350%         (1,202,977)
   34         70       17-Mar-03   17-Sep-07      3.8700%         (2,133,888)
   35          0       15-May-07   15-Nov-07      4.8000%             59,016
   36          0       17-Sep-07   17-Dec-07      4.9440%             (8,056)
   37          0       15-Jul-05   15-Apr-08      3.4800%          1,449,932
          -----------                                           ------------
             1,585                                               (49,760,416)
          ===========                                           ============


(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 20, 30, 31, 32, 35, 36 and 37 are $15
      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
receive 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 cashflow 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.


                                      57

                                       8
<PAGE>


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 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 cashflows 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 December
31, 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.

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 as discussed more fully under "Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations".

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


                                      58

                                       9
<PAGE>


about risks, especially lessee credit risk, that could intensify Airplanes
Group's exposure to changes in interest rates.


                                      59
<PAGE>


Item 4. Controls and Procedures

(a)  Evaluation of disclosure controls and procedures

The Chairman of the Board of Directors of Airplanes Limited and of the
Controlling Trustees of Airplanes Trust acting on the recommendation of the
Board of Directors of Airplanes Limited and the Controlling Trustees of
Airplanes Trust, after evaluating the effectiveness of Airplanes Group's
"disclosure controls and procedures" (as defined in Exchange Act Rules
13a-15(e) and 15 (d) - 15(e)) as of 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(e) or 15(d)-15(e) that occurred
during our last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.


                                      60
<PAGE>


Part II. Other Information

Item 1. Legal Proceedings

VASP
Following the default by the Brazilian airline VASP under its leases, debis
AirFinance Ireland (formerly known as GPA Group plc) sought and obtained in
November 1992 a preliminary injunction for repossession of 13 aircraft and
three 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 December 31, 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 2. Changes in Securities and Use of Proceeds

Not Applicable

Item 3. Defaults Upon Senior Securities

As discussed more fully in "Part 1 Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations", we have had insufficient
cashflows to be


                                      61

                                      10
<PAGE>


able to make any payment of interest on the class B, C and D notes since the
December 15, 2003 payment date.

In general, the rights and remedies with respect to a note event of default are
exercisable only by the trustee of and the holders of the most senior class of
notes outstanding, and then only to the extent that there is an event of
default with respect to that senior class of notes. For example, a failure to
make a required payments 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.

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

Not Applicable

Item 6. Exhibits and Reports on Form 8-K

The following exhibits are included herein:

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

32    Section 1350 Certification

Reports on Form 8-K:
Filed on October 15, 2003, November 17, 2003 and December 15, 2003 (relating to
the monthly report to holders of the certificates).


                                      62
<PAGE>


                                   SIGNATURES

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


Date: February 17, 2004                     AIRPLANES LIMITED


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



Date: February 17, 2004                     AIRPLANES U.S. TRUST


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

<PAGE>


              Particulars of the Portfolio as at December 31, 2003

<TABLE>
                                                                                                               Appraised
                                                           Aircraft          Engine             Serial           Value
     Region             Country           Lessee             Type             Type              Number      January 31, 2004
     ------             -------           ------           -------           ------             ------      ----------------
<S>                     <C>                <C>               <C>               <C>                <C>               <C>

Africa               Kenya              East African        B767-300ER        PW4060             24948             38,679
                                        Safari Air,
                                        Limited
Africa               Nigeria            Bellview            B737-200A         JT8D-17A           23024              1,997
                                        Airlines Ltd
Africa               South Africa       Nationwide          B767-300ER        PW4060             26200             41,936
                                        Airlines
Africa               Tunisia            Nouvelair           A320-200          CFM56-5A3           348              23,223
                                        Tunisie
Africa               Tunisia            Nouvelair           MD83              JT8D-219           49631             11,174
                                        Tunisie
Africa               Tunisia            Nouvelair           MD83              JT8D-219           49672              9,522
                                        Tunisie
Asia & Far East      Bangladesh         GMG Airlines        DHC8-300          PW123               307               5,735
Asia & Far East      China              China Southern      B737-500          CFM56-3C1          24897             13,642
Asia & Far East      China              China Southern      B737-500          CFM56-3C1          25182             14,269
Asia & Far East      China              China Southern      B737-500          CFM56-3C1          25183             14,845
Asia & Far East      China              China Southern      B737-500          CFM56-3C1          25188             14,858
Asia & Far East      China              Xinjiang            B757-200          RB211-535E4        26156             26,091
Asia & Far East      Indonesia          Garuda              B737-400          CFM56-3C1          24683             16,772
Asia & Far East      Indonesia          Garuda              B737-400          CFM56-3C1          24691             17,129
Asia & Far East      Indonesia          Merpati             B737-200A         JT8D-15            22368              2,054
                                        Nusantara
                                        Airlines
Asia & Far East      Indonesia          Merpati             B737-200A         JT8D-15            22369              1,951
                                        Nusantara
                                        Airlines
Asia & Far East      Indonesia          PT Adam             B737-400          CFM56-3C1          26071             18,757
                                        SkyConnection
                                        Airlines
Asia & Far East      Indonesia          PT Mandala          B737-200A         JT8D-17            21685              1,464
                                        Airlines
Asia & Far East      Indonesia          PT Mandala          B737-200A         JT8D-15            22278              1,617
                                        Airlines
Asia & Far East      Indonesia          PT Mandala          B737-200A         JT8D-17A           22803              2,367
                                        Airlines
Asia & Far East      Indonesia          PT Mandala          B737-200A         JT8D-17A           22804              2,314
                                        Airlines
Asia & Far East      Indonesia          PT Mandala          B737-200A         JT8D-17A           23023              2,544
                                        Airlines
Asia & Far East      Indonesia          PT Metro            B737-200A         JT8D-15            22397              2,104
                                        Batavia
Asia & Far East      Indonesia          PT Metro            B737-200A         JT8D-17A           22407              2,135
                                        Batavia
Asia & Far East      Indonesia          PT Metro            B737-200A         JT8D-17A           22802              1,797
                                        Batavia
Asia & Far East      Indonesia          PT Metro            B737-400          CFM56-3C1          24345             15,710
                                        Batavia
Asia & Far East      Indonesia          PT Metro            B737-400          CFM56-3C1          24687             16,453
                                        Batavia
Asia & Far East      Malaysia           Air Asia &          B737-300          CFM56-3C1          24905             16,467
                                        Far East Sdn.
                                        Bhd.
Asia & Far East      Malaysia           Air Asia &          B737-300          CFM56-3C1          24907             16,560
                                        Far East Sdn.
                                        Bhd.
Asia & Far East      Pakistan           Pakistan Int        A300B4-200        CF6-50C2            269               4,131
                                        Airline
Asia & Far East      Philippines        Philippine          B737-400          CFM56-3C1          24684             16,270
                                        Airlines
Asia & Far East      Philippines        Philippine          B737-300          CFM56-3B1          24770             14,697
                                        Airlines
Asia & Far East      Philippines        Philippine          B737-400          CFM56-3C1          26081             19,484
                                        Airlines
Asia & Far East      South Korea        Asiana              B737-400          CFM56-3C1          24493             15,767
                                        Airlines
Asia & Far East      South Korea        Asiana              B737-400          CFM56-3C1          24520             16,354
                                        Airlines
Asia & Far East      Taiwan             Far Eastern         MD83              JT8D-219           49950             11,627
                                        Air Transport
Australia & New      Australia          National Jet        DHC8-100          PW121               229               3,573
Zealand                                 Systems
Europe               Czech Republic     Travel Servis       B737-400          CFM56-3C1          24911             17,468
                                        a.s.
Europe               France             Air France          A320-200          CFM56-5A3           203              20,910
Europe               France             Air France          A320-200          CFM56-5A3           220              21,680
Europe               Hungary            Malev               B737-400          CFM56-3C1          26069             18,583
Europe               Hungary            SkyEurope           B737-500          CFM56-3C1          25185             14,966
                                        Airlines
                                        Hungary Kft
Europe               Iceland            Air Atlanta         B767-300ER        PW4060             26204             41,877
                                        Icelandic
Europe               Iceland            Bluebird Cargo      B737-300QC        CFM56-3B1          23499             13,011
Europe               Iceland            Bluebird Cargo      B737-300QC        CFM56-3B1          23500             12,674
Europe               Italy              Air One SpA         B737-400          CFM56-3C1          24906             17,152
Europe               Italy              Air One SpA         B737-400          CFM56-3C1          24912             17,308
Europe               Italy              Air One SpA         B737-300          CFM56-3C1          25179             17,054
Europe               Italy              Air One SpA         B737-300          CFM56-3C1          25187             17,357
Europe               Italy              Meridiana SpA       MD83              JT8D-219           49792             11,291
Europe               Italy              Meridiana SpA       MD83              JT8D-219           49935             11,474


<PAGE>

                                                                                                               Appraised
                                                           Aircraft          Engine             Serial           Value
     Region             Country           Lessee             Type             Type              Number      January 31, 2004
     ------             -------           ------           -------           ------             ------      ----------------


Europe               Italy              Meridiana SpA       MD83              JT8D-219           49951             12,334
Europe               Netherlands        Capital             DHC8-300          PW123               244               5,202
                                        Aviation
                                        Services B.V.
Europe               Netherlands        Capital             DHC8-300          PW123               300               5,706
                                        Aviation
                                        Services B.V.
Europe               Netherlands        Schreiner           DHC8-300          PW123               276               5,402
                                        Airways
Europe               Netherlands        Schreiner           DHC8-300          PW123               298               5,839
                                        Airways
Europe               Norway             Wideroe's           DHC8-300          PW123               293               5,701
                                        Flyveselskap
                                        a/s
Europe               Norway             Wideroe's           DHC8-300          PW123               342               6,112
                                        Flyveselskap
                                        a/s
Europe               Portugal           euroAtlantic        B767-300ER        PW4060             25411             41,234
                                        airways
Europe               Slovakia           SkyEurope           B737-500          CFM56-3C1          25186             13,917
                                        Airlines, a.s
Europe               Spain              Futura              B737-400          CFM56-3C1          24689             16,426
Europe               Spain              Futura              B737-400          CFM56-3C1          24690             16,305
Europe               Spain              Futura              B737-400          CFM56-3C1          25180             18,341
Europe               Spain              Spanair             MD83              JT8D-219           49620             10,012
Europe               Spain              Spanair             MD83              JT8D-219           49624              9,644
Europe               Spain              Spanair             MD83              JT8D-219           49626             10,028
Europe               Spain              Spanair             MD83              JT8D-219           49709              9,922
Europe               Spain              Spanair             MD83              JT8D-219           49936             12,367
Europe               Spain              Spanair             MD83              JT8D-219           49938             11,637
Europe               Turkey             FreeBird            MD83              JT8D-219           49949             12,018
                                        Airlines
Europe               Turkey             Orbit Ekspres       A300C4-200        CF6-50C2            83                8,377    #DIV/0!
                                        Havayollari
                                        A.S.
Europe               Turkey             Turk Hava           B737-400          CFM56-3C1          24917             17,517
                                        Yollari
Europe               Turkey             Turk Hava           B737-400          CFM56-3C1          25181             17,807
                                        Yollari
Europe               Turkey             Turk Hava           B737-400          CFM56-3C1          25184             18,174
                                        Yollari
Europe               Turkey             Turk Hava           B737-400          CFM56-3C1          25261             18,675
                                        Yollari
Europe               Turkey             Turk Hava           B737-500          CFM56-3C1          25288             14,657
                                        Yollari
Europe               Turkey             Turk Hava           B737-500          CFM56-3C1          25289             14,737
                                        Yollari
Europe               Turkey             Turk Hava           B737-400          CFM56-3C1          26065             18,392
                                        Yollari
Europe               United Kingdom     Air Southwest       DHC8-300          PW123               296               5,753
Europe               United Kingdom     Air Southwest       DHC8-300          PW123               334               6,263
Europe               United Kingdom     easyJet             B737-300          CFM56-3B2          23923             13,499
                                        Airline
                                        Company
                                        Limited
Europe               United Kingdom     MyTravel            A320-200          CFM56-5A3           294              22,722
                                        Airways
Europe               United Kingdom     MyTravel            A320-200          CFM56-5A3           301              22,440
                                        Airways
Europe               United Kingdom     MyTravel            A320-200          CFM56-5A3           349              24,214
                                        Airways
Europe               United Kingdom     Titan Airways       ATR42-300         PW120               109               2,778
                                        Limited
Europe               United Kingdom     Titan Airways       ATR42-300         PW120               113               2,840
                                        Limited
Europe               United Kingdom     Titan Airways       B757-200          RB211-535E4        26151             25,565
                                        Limited
Latin America        Antigua            Caribbean           DHC8-300          PW123               232               5,240
                                        Star Airlines
Latin America        Antigua            Caribbean           DHC8-300          PW123               266               5,596
                                        Star Airlines
Latin America        Antigua            Caribbean           DHC8-300          PW123               267               5,781
                                        Star Airlines
Latin America        Antigua            Liat                DHC8-100          PW120-A             113               2,567
Latin America        Antigua            Liat                DHC8-100          PW120-A             140               2,714
Latin America        Antigua            Liat                DHC8-100          PW120-A             144               2,808
Latin America        Antigua            Liat                DHC8-100          PW120-A             270               3,197
Latin America        Antigua            Liat                DHC8-300          PW123               283               5,524
Latin America        Brazil             Promodal            DC8-71F           CFM56-2C1          45970              8,111
                                        Transportes
                                        Aereos Ltda.
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11284              6,463
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11285              6,113
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11304              6,504
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11305              6,865
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11336              7,209
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11347              7,292
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11348              6,540
                                        Aereas
Latin America        Brazil             TAM Linhas          F100              TAY650-15          11371              6,578
                                        Aereas
Latin America        Colombia           Avianca             B767-200ER        PW4060             25421             30,425


<PAGE>


                                                                                                               Appraised
                                                           Aircraft          Engine             Serial           Value
     Region             Country           Lessee             Type             Type              Number      January 31, 2004
     ------             -------           ------           -------           ------             ------      ----------------

Latin America        Colombia           Avianca             B757-200          RB211-535E4        26154             24,859
Latin America        Colombia           Avianca             MD83              JT8D-219           49939             12,030
Latin America        Colombia           Avianca             MD83              JT8D-219           49946             11,937
Latin America        Colombia           Avianca             MD83              JT8D-219           53120             12,685
Latin America        Colombia           Avianca             MD83              JT8D-219           53125             12,979
Latin America        Colombia           Tampa               DC8-71F           CFM56-2C1          45849              6,927
Latin America        Colombia           Tampa               DC8-71F           CFM56-2C1          45945              7,211
Latin America        Colombia           Tampa               DC8-71F           CFM56-2C1          45976              9,007
Latin America        Colombia           Tampa               DC8-71F           CFM56-2C1          46066              6,814
Latin America        Mexico             Aeromexico          DC9-32            JT8D-17            48126              1,258
Latin America        Mexico             Aeromexico          DC9-32            JT8D-17            48127              1,128
Latin America        Mexico             Aeromexico          DC9-32            JT8D-17            48128              1,301
Latin America        Mexico             Aeromexico          DC9-32            JT8D-17            48129              1,595
Latin America        Mexico             Aeromexico          MD82              JT8D-217           49660              8,003
Latin America        Mexico             Aeromexico          MD82              JT8D-217A          49667              8,029
Latin America        Mexico             Aeromexico          MD87              JT8D-219           49673              8,914
Latin America        Mexico             Mexicana            F100              TAY650-15          11266              6,970
Latin America        Mexico             Mexicana            F100              TAY650-15          11309              7,594
Latin America        Mexico             Mexicana            F100              TAY650-15          11319              7,398
Latin America        Mexico             Mexicana            F100              TAY650-15          11339              6,687
Latin America        Mexico             Mexicana            F100              TAY650-15          11374              7,584
Latin America        Mexico             Mexicana            F100              TAY650-15          11375              7,347
Latin America        Mexico             Mexicana            F100              TAY650-15          11382              7,654
Latin America        Mexico             Mexicana            F100              TAY650-15          11384              7,530
Latin America        Netherlands        Dutch               DHC8-300C         PW123               230               5,253
                     Antilles           Caribbean
                                        Airline
Latin America        Netherlands        Dutch               DHC8-300C         PW123               242               5,116
                     Antilles           Caribbean
                                        Airline
Latin America        Trinidad & Tobago  BWIA West           MD83              JT8D-219           49789             10,814
                                        Indies
                                        Airways
                                        Limited
N America            Canada             Air Canada          A320-200          CFM56-5A1           174              20,485
N America            Canada             Air Canada          A320-200          CFM56-5A1           175              20,703
N America            Canada             Air Canada          A320-200          CFM56-5A1           232              20,839
N America            Canada             Air Canada          A320-200          CFM56-5A1           284              21,171
N America            Canada             Air Canada          A320-200          CFM56-5A1           309              21,862
N America            Canada             Air Canada          A320-200          CFM56-5A1           404              23,260
N America            Canada             Jetsgo              MD83              JT8D-219           49941             11,867
                                        Airlines
N America            Canada             Jetsgo              MD83              JT8D-219           49943             12,545
                                        Airlines
N America            United States of   Astar Air           DC8-73CF          CFM56-2C1          46091              9,664
                     America            Cargo
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45811              7,862
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45813              7,199
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45973              7,409
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45978              6,505
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45993              7,609
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          45994              6,453
                     America
N America            United States of   BAX Global          DC8-71F           CFM56-2C1          46065              7,175
                     America
N America            United States of   Frontier            B737-300          CFM56-3B1          23177             11,033
                     America            Airlines, Inc.
N America            United States of   Pace Airlines       B737-300          CFM56-3B2          23749             12,763
                     America
N America            United States of   Polar Air           B747-200SF        JT9D-7Q            21730             16,180
                     America            Cargo
N America            United States of   TWA Airlines        MD83              JT8D-219           49575              9,250
                     America            LLC
Off Lease            Contract signed    Pluna               ATR42-300         PW121               284               4,163
Off Lease            Off Lease          Off Lease           ATR42-300         PW120               249               3,825
Off Lease            Off Lease          Off Lease           DHC8-100          PW121               258               3,292
Off Lease            Off Lease          Off Lease           B737-200A         JT8D-15            21735              2,033
Off Lease            Off Lease          Off Lease           B737-200A         JT8D-15            22090              1,495
Off Lease            Off Lease          Off Lease           B737-200A         JT8D-15            22453              1,671
Off Lease            Off Lease          Off Lease           B737-200A         JT8D-15            22979              2,697


<PAGE>


                                                                                                               Appraised
                                                           Aircraft          Engine             Serial           Value
     Region             Country           Lessee             Type             Type              Number      January 31, 2004
     ------             -------           ------           -------           ------             ------      ----------------


Off Lease            Off Lease          Off Lease           B737-500          CFM56-3C1          25191             15,088
Off Lease            Off Lease          Off Lease           DC8-71F           CFM56-2C1          45946              5,745
Off Lease            Off Lease          Off Lease           DC8-71F           CFM56-2C1          45971              6,493
Off Lease            Off Lease          Off Lease           DC8-71F           CFM56-2C1          45996              6,654
Off Lease            Off Lease          Off Lease           DC8-71F           CFM56-2C1          45997             10,398
Off Lease            Off Lease          Off Lease           DC8-71F           CFM56-2C1          45998              5,978
Off Lease            Off Lease          Off Lease           DC9-32            JT8D-17            48125              1,343
Off Lease            Off Lease          Off Lease           MD11              CF6-80C2D1F        48499             38,667
Off Lease            Off Lease          Off Lease           MD11              CF6-80C2D1F        48500             39,690
Off Lease            Off Lease          Off Lease           MD11              CF6-80C2D1F        48501             40,112
Off Lease            Off Lease          Off Lease           MD83              JT8D-219           49390              8,028
Off Lease            Off Lease          Off Lease           MD83              JT8D-219           49442              8,824
Others               Ukraine            Ukraine             B737-400          CFM56-3C1          25190             18,348
                                        International
Others               Ukraine            Ukraine             B737-500          CFM56-3C1          25192             14,672
                                        International
Others               Ukraine            Ukraine             B737-500          CFM56-3C1          26075             14,029
                                        International
                                                                                                                  2,046,661

</TABLE>