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 June 30, 2004

                                       OR

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

             For the transition period from _________ to __________

                       Commission file number 33-99970-01

                                   ---------

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

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

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

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

                            Yes |X|    No    |_|

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

                            Yes |X|    No    |_|


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

                                                                Outstanding at
Issuer                                Class                     June 30, 2004
------                                -----                     -------------
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 June 30, 2004

                             Index

Part I.    Financial Information                                        Page No.

Item 1.    Financial Statements (Unaudited)                                  3

           -   Unaudited Condensed Balance Sheets - June 30, 2004 and
               March 31, 2004
           -   Unaudited Condensed Statements of Operations - Three
               Months Ended June 30, 2004 and June 30, 2003
           -   Unaudited Condensed Statements of Comprehensive Income /
               (Loss) - Three Months Ended June 30, 2004 and June 30,
               2003
           -   Unaudited Statements of Changes in Shareholders Deficit /
               Net Liabilities - Three Months Ended June 30, 2004 and
               June 30, 2003
           -   Unaudited Condensed Statement of Cashflows - Three Months
               Ended June 30, 2004 and June 30, 2003
           -   Notes to the Unaudited Condensed Financial Statements

Item 2.    Management's Discussion and Analysis of Financial                11
           Condition and Results of Operations
           -   Introduction
           -   Results of Operations - Three Months Ended June 30, 2004
               compared with Three Months Ended June 30, 2003
           -   Comparison of Actual Cashflows versus the 2001 Base Case
               for the Two Month Period from May 12, 2004 to July 15, 2004

Item 3.    Quantitative and Qualitative Disclosures about Market Risks      42

Item 4.    Controls and Procedures                                          47

Part II.   Other Information

Item 1.    Legal Proceedings                                                48

Item 2.    Changes in Securities and use of Proceeds                        49

Item 3.    Defaults Upon Senior Securities                                  49

Item 4.    Submission of Matters to a Vote of Security Holders              49

Item 6.    Exhibits and Reports on Form 8-K                                 49

Signatures

Appendix 1        Portfolio Information as at June 30, 2004


                                       2
<PAGE>


Part I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

                                 AIRPLANES GROUP

                       UNAUDITED CONDENSED BALANCE SHEETS


<TABLE>
                                                 March 31,                           June 30,
                                     ----------------------------------  -----------------------------------
                                                   2004                                2004
                                     ----------------------------------  -----------------------------------
                                     Airplanes   Airplanes               Airplanes   Airplanes
                                      Limited      Trust      Combined    Limited     Trust      Combined
                                     ----------  ----------  ----------  ----------  ---------  ------------
                                                 ($millions)                        ($millions)
<S>                                  <C>         <C>         <C>         <C>         <C>        <C>
ASSETS

Cash                                        77           6          83          85          6            91
Accounts receivable
    Trade receivables                       19           4          23          12          4            16
    Allowance for doubtful debts            (8)         (1)         (9)         (6)        (1)           (7)
Amounts due from Airplanes Limited           -          45          45           -         45            45
Prepaid expenses                             3           -           3           3          -             3
Other Current Assets                         1           5           6           -          5             5
                                     ----------  ----------  ----------  ----------  ---------  ------------
Total Current Assets                        92          59         151          94         59           153
                                     ----------  ----------  ----------  ----------  ---------  ------------

Net investment in capital and sales
     type leases                             1           -           1           1          -             1
Aircraft, Held for Use                   1,393          59       1,452       1,347         58         1,405
Aircraft, Held for Sale                     98           8         106          98          -            98
                                     ----------  ----------  ----------  ----------  ---------  ------------
Total assets                             1,584         126       1,710       1,540        117         1,657
                                     ==========  ==========  ==========  ==========  =========  ============


LIABILITIES

Accrued expenses and other liabilities   2,639         255       2,894       2,819        268         3,087
Amounts due to Airplanes Trust              45           -          45          45          -            45
                                     ----------  ----------  ----------  ----------  ---------  ------------
Total Current Liabilities                2,684         255       2,939       2,864        268         3,132
                                     ----------  ----------  ----------  ----------  ---------  ------------

Indebtedness                             2,828         275       3,103       2,798        273         3,071
Provision for maintenance                  274          13         287         281          7           288
Deferred income taxes                        -          19          19           -         20            20
                                     ----------  ----------  ----------  ----------  ---------  ------------
Total liabilities                        5,786         562       6,348       5,943        568         6,511
                                     ----------  ----------  ----------  ----------  ---------  ------------
Common Stock, $1 par value per share,
Authorised 10,000 shares; issued and
outstanding 30 shares.                       -           -           -           -          -             -
                                     ----------  ----------  ----------  ----------  ---------  ------------
Net liabilities                         (4,202)       (436)     (4,638)     (4,403)      (451)       (4,854)
                                     ----------  ----------  ----------  ----------  ---------  ------------
                                         1,584         126       1,710       1,540        117         1,657
                                     ==========  ==========  ==========  ==========  =========  ============
</TABLE>




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


                                       3
<PAGE>


                                 AIRPLANES GROUP

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
                                                                        Three Months Ended June 30,
                                           ----------------------------------------------------------------------------------------
                                                             2003                                        2004
                                           ------------------------------------------  --------------------------------------------
                                             Airplanes      Airplanes                    Airplanes      Airplanes
                                             Limited         Trust         Combined      Limited         Trust         Combined
                                           ------------   ------------  -------------  ------------   ------------  ---------------
                                                           ($millions)                                ($millions)

<S>                                        <C>            <C>           <C>            <C>             <C>          <C>
Revenues
Aircraft leasing                                    71              4             75            62              4               66
Aircraft sales                                       1              -              1             1              5                6

Expenses
Cost of Aircraft sold                               (2)             -             (2)            3             (2)               1
Impairment Provision                                 -              -              -           (26)             -              (26)
Depreciation and amortisation                      (31)            (2)           (33)          (20)            (1)             (21)
Net interest expense                              (182)           (18)          (200)         (220)           (22)            (242)
Bad and doubtful debts                              (2)            (1)            (3)            2              -                2
Other lease costs                                  (25)            (1)           (26)          (17)             -              (17)
Selling, general and administrative
   expenses                                         (7)            (1)            (8)           (8)             -               (8)
                                           ------------   ------------  -------------  ------------   ------------  ---------------
Operating loss before
provision for income taxes                        (177)           (19)          (196)         (223)           (16)            (239)

Income tax charge                                   13              2             15             -             (1)              (1)

                                           ------------   ------------  -------------  ------------   ------------  ---------------
Net loss                                          (164)           (17)          (181)         (223)           (17)            (240)
                                           ============   ============  =============  ============   ============  ===============
</TABLE>






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


                                       4
<PAGE>


                                 AIRPLANES GROUP

         UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

<TABLE>
                                                                        Three Months Ended June 30,
                                           ---------------------------------------------------------------------------------------
                                                            2003                                        2004
                                           -----------------------------------------  --------------------------------------------
                                             Airplanes     Airplanes                    Airplanes      Airplanes
                                             Limited        Trust         Combined      Limited         Trust         Combined
                                           ------------  ------------   ------------  -------------  ------------   --------------
                                                          ($millions)                                ($millions)

<S>                                        <C>            <C>           <C>           <C>            <C>             <C>
Loss for the period                               (164)          (17)          (181)          (223)          (17)            (240)


Other Comprehensive (Loss) / Gain

 - Net change in cashflow hedges                    (1)            -             (1)            22             2               24


                                           ------------  ------------   ------------  -------------  ------------   --------------
Total Comprehensive loss                          (165)          (17)          (182)          (201)          (15)            (216)
                                           ============  ============   ============  =============  ============   ==============
</TABLE>



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


                                       5
<PAGE>


                                 AIRPLANES GROUP

    UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES

<TABLE>
                                                   Three Months Ended June 30, 2004 and June 30, 2003

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


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

Net loss for the period           -          164              -          164            17            -         17              181

Other Comprehensive Loss          -            -              1            1             -            -          -                1

                            -------- ------------ -------------- ------------  ----------- ------------- ----------   -------------
Balance at June 30, 2003          -        3,254             72        3,326           343            7        350            3,676
                            ======== ============ ============== ============  =========== ============= ==========   =============


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

Net loss for the period           -          223              -          223            17            -         17              240

Other Comprehensive Gain          -            -            (22)         (22)            -           (2)        (2)             (24)

                            -------- ------------ -------------- ------------  ----------- ------------- ----------   -------------
Balance at June 30, 2004          -        4,379             24        4,403           448            3        451            4,854
                            ======== ============ ============== ============  =========== ============= ==========   =============
</TABLE>



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


                                       6
<PAGE>


                                 AIRPLANES GROUP

                   UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS

<TABLE>
                                                                            Three Months Ended June 30,
                                                 ----------------------------------------------------------------------------------
                                                                  2003                                        2004
                                                 ----------------------------------------   ---------------------------------------
                                                  Airplanes     Airplanes                     Airplanes      Airplanes
                                                  Limited        Trust         Combined       Limited         Trust       Combined
                                                 -----------  -------------  ------------   ------------   ------------   ---------
                                                              ($millions)                                  ($millions)

<S>                                               <C>          <C>            <C>            <C>             <C>           <C>
Cash flows from operating activities
Net loss                                               (164)           (17)         (181)          (223)           (17)       (240)
Adjustment to reconcile (net loss)
to net cash provided by operating activities:
Depreciation                                             31              2            33             20              1          21
Impairment Charge                                         -              -             -             26              -          26
Aircraft maintenance, net                                 5              -             5             11              -          11
Loss/ (Profit) on disposal of aircraft                    1              -             1             (4)            (3)         (7)
Deferred income taxes                                   (13)            (2)          (15)             -              1           1
Provision for bad debts                                   2              1             3             (2)             -          (2)
Accrued and deferred interest expense                   146             15           161            207             21         228

Changes in operating assets & liabilities:
Accounts receivable                                      (2)            (2)           (4)             6             (1)          5
Intercompany account movements                            1             (1)            -              -              -           -
Other accruals and liabilities                           (4)             4             -             (5)            (4)         (9)
Other assets                                             (3)             -            (3)             1              -           1

                                                 -----------  -------------  ------------   ------------   ------------   ---------
Net cash provided by operating activities                 -              -             -             37             (2)         35
                                                 ===========  =============  ============   ============   ============   =========


Cash flows from investing activities
Purchase/Sale of aircraft                                 -              1             1              -              5           5
Capital and sales type leases                             1              -             1              1              -           1
Net cash provided by
                                                 -----------  -------------  ------------   ------------   ------------   ---------
investing activities                                      1              1             2              1              5           6
                                                 ===========  =============  ============   ============   ============   =========

Cash flows from financing activities
Repayment of indebtedness                                (6)            (1)           (7)           (30)            (3)        (33)

                                                 -----------  -------------  ------------   ------------   ------------   ---------
Net cash used in financing activities                    (6)            (1)           (7)           (30)            (3)        (33)
                                                 ===========  =============  ============   ============   ============   =========

Net increase / (decrease) in cash                        (5)             -            (5)             8              -           8

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

Cash at end of period                                   130              6           136             85              6          91
                                                 ===========  =============  ============   ============   ============   =========

Cash paid in respect of:
Interest                                                 36              3            39             14              1          15
                                                 ===========  =============  ============   ============   ============   =========
</TABLE>






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


                                       7


                                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 June 30, 2004 and
for the three month period ended June 30, 2004. Such adjustments are of a
normal, recurring nature. The results of operations for the three and nine
month periods ended June 30, 2004 are not necessarily indicative of the results
to be expected for the full year.

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


Recent Events

We have been unable to meet all of the base case assumptions either in our
original prospectus dated March 28, 1996 (the "1996 Base Case") or in our
prospectus dated March 8, 2001 (the "2001 Base Case"). In light of continued
lease restructurings and a weak leasing market generally we are generating
revenues at significantly lower levels than we had assumed and at levels which
have been inadequate to pay minimum principal on the class A notes in full, or
to pay any interest or minimum principal on the class B notes or any interest
on the class C and class D notes, since the December 15, 2003 payment date.
Even though, as a result of the consent solicitation we are now able to sell
aircraft where it in our best economic interest, and which we may not have been
able to sell previously, such sales in the current market are difficult to
achieve and where sales have been completed, they have not yielded sales
proceeds sufficient to repay a proportionate amount of the notes and
certificates or even to make a significant difference to our cashflow. On each
payment date we are currently only paying in full our administrative and lease
expenses and certain other payments in the ordinary course of business,
interest on the class A notes and swap payments, and the "First Collection
Account Top-Up". We use any remaining cashflows towards payment of minimum
principal on the class A notes which at July 15, 2004 was $36.2 million in
arrears. It is highly unlikely that we will ever be able to resume making
payments of


                                       8
<PAGE>


interest or principal on the class B, C and D notes.

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

The fair value of the aircraft is generally based on independent appraisals of
aircraft. The appraised values are determined based on the assumptions that
there is an "open unrestricted stable market environment with a reasonable
balance of supply and demand". On the basis of past experience including actual
lease rates and sales prices achievable and the servicer's experience of the
market, estimated discounted cashflows are used as a more accurate indication
of fair value. The estimated discounted future cashflows assume, among other
things, market lease rates at the end of the existing lease term, other lease
costs, downtime and the risk inherent in the cashflows. Following consideration
of the estimated future cashflows from rentals or sales proceeds, to be
generated by our aircraft, which have decreased significantly, a SFAS 144
assessment resulted in the requirement for an impairment provision of $26
million (Airplanes Limited: $26 million; Airplanes Trust: $Nil) in the three
month period ended June 30, 2004.


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.


                                       9
<PAGE>


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

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

Indebtedness at June 30, 2004 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 10) have been prepared in accordance
with United States generally accepted accounting principles for interim
financial information and in accordance with the requirements of this Report on
Form 10-Q. Consequently, they do not include all the disclosure normally
required by United States generally accepted accounting principles. For further
information regarding Airplanes Group and its financial condition, results of
operations and cashflows, you should refer to the audited financial statements
and notes thereto included in Airplanes Group's annual Report on Form 10-K for
the year ended March 31, 2004 previously filed with the Securities and Exchange
Commission.


                                      10
<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 June 30, 2004, we owned 168 aircraft, 149 of which were on lease to
57 lessees in 35 countries.

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

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.


                                      11
<PAGE>


General

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

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

Recent Developments

Overview

We have been unable to meet all of the 1996 Base Case assumptions or the 2001
Base Case assumptions. In light of continued lease restructurings and a weak
leasing market generally, we are generating revenues at significantly lower
levels than we had assumed and at levels which have been inadequate to pay
minimum principal on the class A notes in full, or to pay any interest or
minimum principal on the class B notes or any interest on the class C and D
notes, since the December 15, 2003 payment date. Even though, as a result of
the consent solicitation (described more fully below) we are now able to sell
aircraft which we may not have been able to sell previously, such sales in the
current market are difficult to achieve and where sales have been completed,
they have not yielded sales proceeds sufficient to repay a proportionate amount
of the notes and certificates or even to make a significant difference to our
cashflow. On each payment date we are currently only paying in full our
administrative and lease expenses and certain other payments in the ordinary
course of business, interest on the class A notes and swap payments, and the
"First Collection Account Top-Up". We use any remaining cashflows towards
payment of minimum principal on the class A notes which at July 15, 2004 was
$36.2 million in arrears. It is highly unlikely that we will ever be able to
resume making payments of interest or principal on the class B, C and D notes.

Background

Class A principal adjustment amount

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


                                      12
<PAGE>


pay class A principal adjustment amount in full and since the April 15, 2003
payment date, we have not had sufficient cashflows to pay any class A principal
adjustment amount, resulting in accumulating arrears.

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

Class A minimum principal amount

To the extent that we have sufficient available funds, we are also required to
pay a minimum principal amount on the class A notes in order to maintain
certain loan to initial appraised value ratios. (Since class A minimum
principal amount is determined by reference to initial appraised values, it is
unaffected by the annual appraisals). As a result of earlier payments of class
A principal adjustment amount described above we remained ahead of the required
class A minimum principal payment schedule. However as described above, we have
not always had sufficient cashflows to pay class A principal adjustment amount
in full and since the April 15, 2003 payment date, we have not had sufficient
cashflows to pay any class A principal adjustment amount. As a result, since
the August 15, 2003 payment date we have no longer been ahead of the required
class A minimum principal payment schedule. Therefore on that date we had to
recommence payments of minimum principal on the class A notes to the extent of
available cashflows and we were unable to fund the "Second Collection Account
Top-up" in full. Beginning on the December 15, 2003 payment date our cashflows
were insufficient to allocate any funds at all to the "Second Collection
Account Top-up" or to pay minimum principal on the class A notes in full.
Minimum principal arrears on the class A notes were $36.2 million following the
July 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 of minimum principal on the class B notes or any
interest on the class C and D notes, since the December 15, 2003 payment date.

Class B, C and D notes

It is highly unlikely that we will ever be able to resume payments of interest
or principal on the class B, C and D notes. Given our failure to pay interest
when due on these notes beginning on the December 15, 2003 payment date,
interest has begun to accrue on the unpaid interest in accordance with the
terms of the notes and will continue to accrue until all interest arrears are
paid in full. Since interest (and 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 were available at any subsequent time to make payments ranking below
class A


                                      13
<PAGE>


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.

Ratings

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

Set out in the table below are the ratings of our certificates at August 9,
2004:-

                     Outstanding
                      Principal
                      Balance as
                     at August 9,                               Moody's (S&P
Certificate              2004         S & P        Fitch        equivalent)
-----------              ----         -----        -----        -----------
Subclass A-6         $64.5m           AA-          BBB-         A2 (A)
Subclass A-8         $700.0m          A            BB           Baa3 (BBB-)
Subclass A-9         $750.0m          BB+          BB           B1 (B+)
Class B              $226.8m          D            CCC          Ca (CC)
Class C              $349.8m          D            CCC          Ca (CC)
Class D              $395.1m          D            CC           C (C)

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

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

Commercial Opportunities for Certain Types of our Aircraft

The market for certain aircraft models is currently very weak and is expected
to remain so. We are examining all possibilities in respect of the remarketing
of the aircraft, including leasing, selling or where appropriate, converting
them to freighter aircraft.

Prior to the successful completion of the consent solicitation as outlined in
our most recent Form 10K as previously filed with the SEC, 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


                                      14
<PAGE>


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, which precluded use of the annual allowance for this
aircraft type, 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.

During September 2003, we successfully completed a solicitation of consents
from certificate holders, as announced in our Consent Solicitation Statement
dated September 5, 2003 and as explained in more detail in our most recent Form
10K.

We have identified a number of aircraft which are potential candidates for
sale, having little to no re-lease prospects and which require expenditure for
storage, maintenance and insurance. At June 30, 2004 eight aircraft (ATR42x1,
A300C4-200x1, DHC8-100x1, DHC8-300Cx1, B737-200Ax1, DC9-32x3) were subject to
letters of intent for sale.

As disclosed in our most recent Form 10K a letter of intent for the sale of
three MD11 aircraft was signed by the servicer in June 2004. This letter of
intent subsequently expired and the transaction did not proceed. Subsequent to
June 30, 2004 another letter of intent for the sale of the three MD11 aircraft
has been signed following an offer from a separate purchaser. It is highly
likely that we will accept this offer as we have been unable to re-lease the
aircraft since their early return to us last year and the operating lease
market for MD11 aircraft in passenger configuration is extremely weak. However,
we are still in the process of reviewing the proposal to ensure that acceptance
of the offer is in the best economic interest of Airplanes Group and the
noteholders. If the sale is approved and the transaction proceeds we intend to
disclose this through a separate press release.

As of the date of this Form 10Q, in addition to the three MD11 aircraft
referred to above, a further three aircraft (MD83x1, DC8-71Fx2) have become
subject to letters of intent for sale, one of which has been approved by the
Board of Directors.

Remarketing

At June 30, 2004, we had 33 aircraft scheduled to be remarketed before June 30,
2005. These comprise 2 B737-200As, 2 B737-300s, 2 B737-400s, 1 B747-200SF, 1
B767-300ER, 3 DHC8s, 6 MD-83s, 1 MD-87, 3 MD-11s, 6 DC8s, 1 A320s, 2 DC9s, 2
ATR42s and 1 B757-200. Furthermore, in light of negotiations with certain
lessees, we may also experience


                                      15
<PAGE>


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 which have not been reset in the
last three years.

The Lessees:

Europe

At June 30, 2004 we leased 48 aircraft which represented 35.60% of our
portfolio by appraised value at January 31, 2004 to operators in Europe.

At June 30, 2004 a Turkish lessee of one A300 aircraft was in arrears. A
termination notice has been issued by the servicer and discussions continue
regarding the payment of arrears.

North America

At June 30, 2004 we leased 20 aircraft representing 12.35% of our portfolio by
appraised value as of January 31, 2004, to operators in North America.

At June 30, 2004, we leased six aircraft, representing 6.34% of our portfolio
by appraised value as of January 31, 2004 to one Canadian lessee. The lessee,
which has been under the protection of the Companies Creditors Arrangement Act
(Canada) since March 2003, resumed making payments in July 2003 and continues
to do so. The 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.

At June 30, 2004 a lessee of one aircraft representing 0.80% of our portfolio
by appraised value as of January 31, 2004 had filed for Chapter 11 bankruptcy
protection. The airline has subsequently emerged from this protection. The
aircraft was rejected as part of the Chapter 11 proceedings and was redelivered
during the three months ended June 30, 2004. The servicer is pursuing all
amounts outstanding in respect of the lessee's obligations.

Latin America

At June 30, 2004, lessees of 40 aircraft with respect to 15.99% 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 5.86% 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


                                      16
<PAGE>


2003. All aircraft have been returned. The servicer has signed a settlement
agreement in respect of the lessees obligations. The lessee is current in
respect of these obligations.

A second Brazilian lessee of eight F-100 aircraft representing 2.65% 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 to date, continued to meet its obligations to us.

At June 30, 2004, 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 has signed a settlement agreement in respect of the lessee's
obligations. The lessee is current in respect of these obligations.

At June 30, 2004, we leased nine aircraft, representing 6.32% 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 June 30, 2004, we leased six aircraft (included in the nine aircraft
mentioned in the preceding paragraph) to one Colombian lessee, representing
5.19% of our portfolio by appraised value at January 31, 2004. The lessee,
which is still under Chapter 11 bankruptcy protection in the U.S., recommenced
making payments in May 2003 and is current in respect of its obligations which
were restructured during the year ended March 31, 2004.

At June 30, 2004, an Antiguan lessee of five aircraft representing 0.83% 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 June 30, 2004, we leased 30 aircraft representing 16.11% 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. These factors adversely affected the ability of lessees
in the region to make payments under their leases. Current indications are that
the region has recovered and is experiencing traffic growth.

At June 30, 2004 an Indonesian lessee of two aircraft representing 0.20% of our
portfolio by appraised value as of January 31, 2004 wasin arrears. The servicer
has used default notices to the lessee and is currently in discussions
regarding outstanding amounts.


                                      17
<PAGE>


Africa

At June 30, 2004 we leased six aircraft representing 6.25% of our portfolio by
appraised value at January 31, 2004 to lessees in Africa.

Other

We also leased three aircraft representing 2.30% of our portfolio by appraised
value as of January 31, 2004 to a lessee in Ukraine and one aircraft
representing 0.17% of our portfolio by appraised value as of January 31, 2004
to a lessee in Australia.

Compliance with Governmental and Technical Regulation

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


                                      18
<PAGE>


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 June 30, 2004, 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 $12.3 million. To date, we have completed the
modification of fourteen aircraft at a cost of $6.1 million. We expect to
complete the modification of the remaining aircraft by June 30, 2005 at an
estimated cost of $6.2 million.

The FAA has issued an AD mandating the modification of affected lap joints on
Boeing 737 aircraft when an aircraft has completed 50,000 cycles. The estimated
cost to implement those modifications for each aircraft is approximately
$230,000. Based on the current cycles completed to date, our 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 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.


                                      19
<PAGE>


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.


                                      20
<PAGE>


Results of Operations - Three Months Ended June 30, 2004 Compared with Three
Months Ended June 30, 2003.

Airplanes Group's results for the three months ended June 30, 2004 reflected a
continuation of the difficult trading conditions for the aviation industry
which gave rise to lessees seeking a variety of rental restructurings including
rental reductions and deferrals. These restructurings will continue to have a
significant adverse impact in future periods, although various factors,
including the timing of receipts and expenditures and non-recurring items, can
result in short term swings in any particular reporting period.

Airplanes Group generated $35 million in cash from operations in the three
months ended June 30, 2004 compared to $Nil in the same period of the previous
year. The increase in cash generated from operations in the three month period
ended June 30, 2004 is primarily attributable to positive maintenance cashflows
and lower interest payments, offset by a reduction in lease revenues due to an
increased level of lease restructurings and to a lesser extent, to greater
aircraft downtime and reduced rentals as a result of aircraft sales in previous
periods. Cashflow will continue to be adversely affected by the factors
outlined above. There was a net loss after taxation for the three months ended
June 30, 2004 of $240 million (Airplanes Limited: $223 million; Airplanes
Trust: $17 million) compared to a net loss after taxation for the three months
ended June 30, 2003 of $181 million (Airplanes Limited: $164 million; Airplanes
Trust: $17 million). Excluding accrued but unpaid class E note interest and
impairment charges, the movement from a loss of $22 million to a loss of $7
million for the three months ended June 30, 2004 was primarily attributable to
an increase in profit from aircraft sales and decreased interest expense offset
by decrease in lease revenues as discussed below.

Leasing Revenues

Leasing revenues (which include maintenance reserve receipts which we receive
from certain of our lessees) for the three months ended June 30, 2004 were $66
million (Airplanes Limited: $62 million; Airplanes Trust: $4 million) compared
with $75 million (Airplanes Limited: $71 million; Airplanes Trust: $4 million)
for the three months ended June 30, 2003. The decrease in 2004 was primarily
attributable to a number of lease restructurings including rental reductions,
the number of aircraft being off lease during the three months ended June 30,
2004 and to the reduction in the number of aircraft on lease in the period
ended June 30, 2004 as a consequence of aircraft sales in previous periods. At
June 30, 2004, we had 148 of our 168 aircraft on lease (Airplanes Limited: 138
aircraft; Airplanes Trust: 10 aircraft) compared to 155 of our 176 aircraft on
lease (Airplanes Limited: 145 aircraft; Airplanes Trust: 10 aircraft) at June
30, 2003.


                                      21
<PAGE>


Impairment Provisions

Aircraft carrying values are periodically assessed for impairment in accordance
with SFAS 144. An impairment review is required whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.The
statement requires an assessment for impairment when an asset's carrying value
is greater than its fair value as measured by net undiscounted estimated future
cashflows. Impairments are measured by the excess of carrying value over fair
value. Following consideration of the estimated future cashflows from rentals
or sales proceeds, to be generated by our aircraft a SFAS 144 assessment
resulted in the requirement for an impairment provision of $26 million
(Airplanes Limited: $26 million; Airplanes Trust: $Nil) in the three month
period ended June 30, 2004.

Depreciation and Amortization

The charge for depreciation and amortization in the three months ended June 30,
2004 amounted to $21 million (Airplanes Limited: $20 million; Airplanes Trust:
$1 million) as compared with $33 million (Airplanes Limited: $31 million;
Airplanes Trust: $2 million) for the three months ended June 30, 2003. The
reduction in the charge in the three month period ended June 30, 2004 resulted
primarily from the reduced depreciable value of the fleet following the
impairment provisions made in the year ended March 31, 2003 and to a lesser
extent, aircraft sales in previous periods.

Net Interest Expense

Net interest expense was $242 million (Airplanes Limited: $220 million;
Airplanes Trust: $22 million), of which $35 million related to interest on the
class A to D notes and swaps and $207 million related to interest on the class
E notes, in the three month period ended June 30, 2004 compared to $200 million
(Airplanes Limited: $182 million; Airplanes Trust: $18 million), of which $40
million related to interest on the class A to D notes and swaps and $160
million related to interest on the class E notes, in the three month period
ended June 30, 2003. The increase in the amount of interest charged was
primarily due to additional interest charged on accrued but unpaid class E note
interest of $47 million, partially offset by lower average debt and interest
rates in the three months ended June 30, 2004.

The weighted average interest rate on the class A to D notes during the three
months ended June 30, 2004 was 5.50% and the average debt in respect of the
class A to D notes outstanding during the period was $2,506 million. The class
E notes together with the accrued but unpaid class E note interest, accrue
interest at a rate of 20% per annum, (as adjusted by reference to the U.S.
consumer price index with effect from March 28, 1996).

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

The difference for the three months ended June 30, 2004 in Airplanes Group's
net interest expense of $242 million (Airplanes Limited: $220 million;
Airplanes Trust: $22 million) and cash paid in respect of interest of $15
million (Airplanes Limited: $14 million; Airplanes Trust: $1 million) is
substantially accounted for by the fact that interest on the


                                      22
<PAGE>


class E notes is accrued but unpaid and that the interest on the class B, C and
D notes is now also being accrued and not paid.

Net interest expense is stated after deducting interest income earned during
the relevant period. In the three months ended June 30, 2004, Airplanes Group
earned interest income (including lessee default interest) of $Nil compared
with $1 million in the three months ended June 30, 2003 (Airplanes Limited: $1
million; Airplanes Trust: $Nil).

Bad Debt Provisions

Airplanes Group's practice is to provide specifically for any amounts due but
unpaid by lessees based primarily on the amount due in excess of security held
and also taking into account the financial strength and condition of a lessee
and the economic conditions existing in the lessee's operating environment.
While a number of Airplanes Group's lessees failed to meet their contractual
obligations in the three month period ended June 30, 2004, resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these lessees, the credit exposure with regard to certain other
carriers improved in the period. Overall, there was a net release of provisions
of $2 million (Airplanes Limited: $2 million; Airplanes Trust: $Nil) in respect
of bad and doubtful debts in the three months ended June 30, 2004 compared with
a net provision of $3 million (Airplanes Limited: $2 million; Airplanes Trust:
$1 million) for the three months ended June 30, 2003.

Other Lease Costs

Other lease costs, comprising mainly a transfer to the provision for
maintenance and aircraft related technical expenditure associated with
remarketing the aircraft, in the three months ended June 30, 2004 amounted to
$17 million (Airplanes Limited: $17 million; Airplanes Trust: $Nil) compared
with other lease costs of $26 million (Airplanes Limited: $25 million;
Airplanes Trust: $1 million) in the three months ended June 30, 2003.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period ended
June 30, 2004 amounted to $8 million (Airplanes Limited: $8 million; Airplanes
Trust: $Nil) as compared to the expense that was incurred in the three months
ended June 30, 2003 of $8 million (Airplanes Limited: $7 million; Airplanes
Trust: $1 million).

The most significant element of selling, general and administrative expenses is
the aircraft servicing fees paid to the servicer. Substantially all of these
amounts represent asset based fees calculated as an annual percentage of agreed
values of aircraft under management pursuant to a servicing agreement. Selling,
general and administrative expenses in the three months ended June 30, 2004 and
the three months ended June 30, 2003 include $6 million (Airplanes Limited: $6
million; Airplanes Trust: $Nil) relating to servicing fees.

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the three month period ended June 30, 2004
was $1 million (Airplanes Limited: $1 million; Airplanes Trust: $Nil) in
respect of administrative agency and cash management fees payable to
subsidiaries of debis AirFinance Ireland,


                                      23
<PAGE>


compared to the charge of $1 million (Airplanes Limited: $1 million; Airplanes
Trust $Nil) for the three month period ended June 30, 2003.

Operating Loss

The operating loss for the three months ended June 30, 2004 was $239 million
(Airplanes Limited: $223 million; Airplanes Trust: $16 million) compared with
an operating loss of $196 million for the three months ended June 30, 2003
(Airplanes Limited: $177 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 June 30, 2004, as compared with a tax
benefit of $15 million (Airplanes Limited: $13 million; Airplanes Trust: $2
million) for the three months ended June 30, 2003. The benefit in the three
months ended June 30, 2003 relates primarily to a release of deferred tax
provisions in the Irish Subsidiary companies which were deemed unnecessary due
to the level of losses forward.

Net Loss

The net loss after taxation for the three months ended June 30, 2004 was $240
million (Airplanes Limited: $223 million; Airplanes Trust: $17 million)
compared with a net loss after taxation for the three months ended June 30,
2003 of $181 million (Airplanes Limited: $164 million; Airplanes Trust: $17
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 June 30, 2004 amounted to $91 million (Airplanes Limited: $85
million; Airplanes Trust: $6 million) compared to cash balances at June 30,
2003 of $136 million (Airplanes Limited: $130 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.

Operating Activities

Net cash provided by operating activities in the three months ended June 30,
2004 amounted to $35 million (Airplanes Limited: $37 million; Airplanes Trust:
$(2) million) compared with $Nil in the three months ended June 30, 2003
(Airplanes Limited: $Nil million; Airplanes Trust: $Nil). This includes cash
paid in respect of interest of $15


                                      24
<PAGE>


million in the three months ended June 30, 2004 (Airplanes Limited: $14
million; Airplanes Trust: $1 million) compared with $39 million in the three
months ended June 30, 2003 (Airplanes Limited: $36 million; Airplanes Trust: $3
million). The increase in cash provided by operating activities in the three
month period ended June 30, 2004 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 June 30,
2004 were $6 million (Airplanes Limited: $1 million; Airplanes Trust: $5
million). This includes proceeds of $6 million (Airplanes Limited: $1 million;
Airplanes Trust: $5 million) from the sale of three DC8-71F aircraft and one
B737-200A aircraft. In the three months ended June 30, 2003, 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 DC9-51
aircraft and two Metro III aircraft.

Cashflows used in financing activities in the three months ended June 30, 2004
primarily reflect the repayment of $33 million of principal on subclass A-6
notes by Airplanes Group (Airplanes Limited: $30 million; Airplanes Trust: $3
million) compared with $6 million of principal repaid on subclass A-6 notes and
class B notes by Airplanes Group (Airplanes Limited: $5 million; Airplanes
Trust: $1 million) in the three months ended June 30, 2003.

Indebtedness

Airplanes Group's indebtedness consisted of class A to E notes in the amount of
$3,071 million (Airplanes Limited: $2,798 million; Airplanes Trust: $273
million) at June 30, 2004 and $3,103 million (Airplanes Limited: $2,828
million; Airplanes Trust: $275 million) at June 30, 2003. Airplanes Group's
outstanding publicly traded class A to D notes amounted to $2,480 million
(Airplanes Limited: $2,257 million; Airplanes Trust: $223 million) at June 30,
2004 and $2,612 million (Airplanes Limited: $2,377 million; Airplanes Trust:
$235 million) at June 30, 2003. Airplanes Group had $591 million class E notes
outstanding at June 30, 2004 and June 30, 2003.

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

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


                                      25
<PAGE>


is now, subclass A-6, subclass A-8 and subclass A-9 in that order.

Comparison of Actual Cashflows versus the 2001 Base Case for the Two Month
Period from May 12, 2004 to July 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, 2004 which is filed
with the Securities and Exchange Commission and available from
http://www.sec.gov and "Item 1. Financial Statements (Unaudited)" of this
Report on Form 10-Q.

For the purposes of this report, the "Two Month Period" comprises information
from the monthly cash reports as filed at the Securities and Exchange
Commission as Forms 8-K for the relevant months ended June 15, 2004 and July
15, 2004. The financial data in these reports includes cash receipts from May
12, 2004 (first day of the Calculation Period for the June 2004 Report) up to
July 9, 2004 (last day of the Calculation Period for the July 2004 Report).
Page 41 presents the cumulative cashflow information from March 2001 to the
July 2004 payment date. This report, however, limits its commentary to the Two
Month Period.

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

The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments in the Two Month Period and
should be read in conjunction with the analysis on page 40.

Cash Collections

"Total Cash Collections" include Net Lease Rental, Interest Earned, Aircraft
Sales, Net Maintenance and Other Receipts (each as defined below). In the Two
Month Period, Airplanes Group generated approximately $39.5 million in Total
Cash Collections, $28.1 million less than the 2001 Base Case. This difference
is due to a combination of the factors set out below the numbers in square
brackets below refer to the line item number shown on page 39.


                                      26
<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 Two Month Period, the amount of revenue
     loss attributed to Renegotiated Leases was $0.8 million, as compared to
     $Nil assumed in the 2001 Base Case. This related to renegotiations with
     two Latin American lessees, one North American lessee and one Asian lessee
     representing 5 aircraft in total on lease to these lessees at June 30,
     2004.

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

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

     "Rental Resets" is a measure of the difference in rental revenue when new
     lease rates are different from those assumed in the 2001 Base Case,
     including lease rate adjustments for changes in interest rates on floating
     rate leases and lease rates achieved where revenues are dependent on
     aircraft usage. The loss of rental revenue as a result of Rental Resets
     amounted to $22.9 million in the Two Month Period, as compared to $Nil
     assumed in the 2001 Base Case. This reflects current market conditions
     where an oversupply of aircraft has resulted in lower lease rates upon
     re-leasing or extension of leases than assumed in the 2001 Base Case.

[4]  Lease Rentals - Aircraft Sales

     "Lease Rentals - Aircraft Sales" represents rental revenue foregone in
     respect of aircraft sold prior to their assumed sale date in the 2001 Base
     Case, net of rental revenue received in respect of aircraft remaining on
     lease after their assumed sale date in the 2001 Base Case. In the 2001
     Base Case, all aircraft are assumed to be sold either at the end of their
     useful economic life or, where an aircraft was subject to a lease with the
     lease expiry date falling after the end of its useful economic life, on
     the contracted lease expiry date. Since March 2001, three DC9-51 aircraft,
     one DC9-32 aircraft, four DC8-71F aircraft, two B727-200A aircraft, five
     B737-200A aircraft, three Metro-III aircraft and one A300B4-200 aircraft
     have been sold prior to their assumed sale date in the 2001 Base Case,
     resulting in a negative variance of $3.0 million in lease rentals compared
     to the 2001 Base Case in the Two Month Period. Lease rentals totaling $0.2
     million were received in the Two Month Period in respect of one A300C4-200
     aircraft which has remained on lease after its assumed sale date in the
     2001 Base Case.


                                      27
<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 Two Month Period, Contracted Lease Rentals were
     $41.1 million, which was $26.5 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 increase of $0.3 million in the Current Arrears
     balance over the Two Month Period, as compared to $Nil assumed in the 2001
     Base Case.

[7]  Net Stress-Related Costs

     "Net Stress-Related Costs" is a combination of all the factors which can
     cause actual lease rentals to vary from the Contracted Lease Rentals. The
     2001 Base Case assumed Net Stress-Related Costs equal to 6.0% of the 2001
     Base Case Lease Rentals in the Two Month Period. Net Stress-Related Costs
     incurred in the Two Month Period amounted to a net cash outflow of $6.3
     million (9.3% of Lease Rentals) compared to $4.0 million outflow assumed
     in the 2001 Base Case, a variance of $2.3 million that is due to the five
     factors described in items [8] to [12] below.

[8]  Bad Debts

     "Bad Debts" are lease rental arrears owed by lessees which have defaulted
     and which are deemed irrecoverable. Bad Debts were $Nil for the Two Month
     Period as compared to the 2001 Base Case assumption of $0.7 million (1.0%
     of Lease Rentals).

[9]  Deferred Arrears Balance

     "Deferred Arrears Balance" refers to current arrears that have been
     capitalized and restructured into a deferred balance. In the Two Month
     Period, Airplanes Group received payments totaling $1.3 million in
     accordance with these restructurings. Payments assumed to be received in
     accordance with restructurings included in the 2001 Base Case were $Nil
     for the Two Month Period.


                                      28
<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
     aircraft AOG at various times during the Two Month Period and at June 30,
     2004, twenty aircraft were AOG, six 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 Two Month Period, the 2001 Base Case Lease Rentals loss
     attributed to AOG was $8.0 million (11.8% of Lease Rentals), as compared
     to $2.8 million (4.2% of Lease Rentals) assumed under the 2001 Base Case.

[11] Other Leasing Income

     "Other Leasing Income" consists of miscellaneous income received in
     connection with a lease other than contracted rentals, maintenance
     receipts and security deposits, such as early termination payments or
     default interest. In the Two Month Period, Other Leasing Income amounted
     to $0.4 million, as compared to $Nil assumed under the 2001 Base Case.

[12] Repossession Costs

     "Repossession Costs" cover legal and aircraft technical costs incurred as
     a result of repossessing an aircraft. In the Two Month Period,
     Repossession Costs amounted to $Nil, as compared to $0.5 million (0.8% of
     Lease Rentals) assumed under the 2001 Base Case.

[14] Net Lease Rental

     "Net Lease Rental" is Contracted Lease Rentals less any movement in
     Current Arrears balance and Net Stress-Related Costs. In the Two Month
     Period, Net Lease Rental amounted to $34.5 million, $29.1 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 Two Month Period, Interest Earned amounted to $0.1
     million, $1.0 million less than that assumed in the 2001 Base Case. The
     difference is due to a lower cash balance in the Collection Account as
     available cashflows were adequate to allocate only $60 million to the cash
     liquidity reserve amount on each payment date in the Two Month Period
     (refer to item 29A below), and a lower average reinvestment rate than
     assumed in the 2001 Base Case. The average actual reinvestment rate for
     the Two Month Period was 1.1% (excluding a $5 million guaranteed
     investment contract) as compared to the 5.2% assumed in the 2001 Base
     Case.


                                      29
<PAGE>


[16] Aircraft Sales

     Aircraft sales proceeds totalling $2.1 million were received in the Two
     Month Period in respect of the sale of one DC8-71F aircraft, one B737-200A
     aircraft and two engines from one other B737-200A aircraft. Sale deposits
     totalling $0.3 million had been received in a prior period in respect of
     the sale of these aircraft. In the 2001 Base Case, aircraft sales proceeds
     totalling $2.9 million are assumed to be received in the Two Month Period
     in respect of the assumed sale of one B737-200A aircraft which was sold in
     the Two Month Period. In the 2001 Base Case all aircraft are assumed to be
     sold either at the end of their useful economic life or, where an aircraft
     was subject to a lease with the lease expiry date falling after the end of
     its useful economic life, on the contracted lease expiry date.

[17]   Net Maintenance

       "Net Maintenance" refers to maintenance reserve revenue received less
       any maintenance reimbursements paid to lessees. In the Two Month Period,
       positive net maintenance cashflows of $2.8 million were received. The
       2001 Base Case makes no assumptions for Net Maintenance as it assumes
       that, over time, maintenance revenue will equal maintenance expenditure.
       However, it is unlikely that in any particular reporting period,
       maintenance revenue will exactly equal maintenance expenses.


CASH EXPENSES

"Total Cash Expenses" include Aircraft Operating Expenses and Selling, General
and Administrative ("SG&A") Expenses. In the Two Month Period, Total Cash
Expenses were $11.8 million compared to $8.8 million assumed in the 2001 Base
Case, a negative variance of $3.0 million. A number of factors discussed below
have given rise to this.

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

[20]   Re-Leasing and Other Overhead Costs

       "Re-Leasing and Other Overhead Costs" consist of miscellaneous
       re-delivery and leasing costs associated with re-leasing events, costs
       of insurance and other lessee-related overhead costs. In the Two Month
       Period, these costs amounted to $7.0 million (or 10.4% of Lease Rentals)
       compared to $3.4 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.

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


                                      30
<PAGE>


[21] Aircraft Servicer Fees

     "Aircraft Servicer Fees" are defined as amounts paid to the servicer in
     accordance with the terms of the servicing agreement. In the Two Month
     Period, the total Aircraft Servicer Fees paid were $3.9 million, as
     compared to $3.9 million assumed in the 2001 Base Case.

     Aircraft Servicer Fees consist of:

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

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

[23] Other Servicer Fees and Other Overheads

     "Other Servicer Fees and Other Overheads" relate to fees and expenses paid
     to other service providers including the administrative agent, the cash
     manager, financial advisers, legal advisers and accountants and to the
     directors/controlling trustees. In the Two Month Period, Other Servicer
     Fees and Other Overheads amounted to $0.9 million, $0.6 million lower than
     an assumed expense of $1.5 million in the 2001 Base Case.

[29A] Shortfall in Liquidity Reserve

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

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

     -    a security deposit reserve amount.

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

     "Shortfall in Liquidity Reserve" relates to any shortfall in the funds
     allocated to the "First Collection Account Top-up" and "Second Collection
     Account Top-up" as a result of Airplanes Group not having sufficient
     balance of funds after payment of expenses and all required payments on
     the notes which rank prior to the applicable liquidity reserve amount
     under the priority of payments applicable to Airplanes Group. Since the
     May 2003 payment date there has been a depletion of the "Second Collection
     Account Top-up" and beginning on the December 15, 2003 payment date
     cashflows have been insufficient to allocate any funds to the "Second
     Collection Account Top-up". On the July 15, 2004 payment date, there was a
     shortfall in the


                                      31
<PAGE>


     liquidity reserve amount of $45.4 million as compared to a shortfall of
     $45.7 million on the May 17, 2004 payment date, representing an overall
     decrease of $0.3 million in the Shortfall in Liquidity Reserve for the Two
     Month Period. This decrease in the Shortfall in Liquidity Reserve is
     explained by a net reduction of $0.3 million in the security deposit
     reserve amount in the Two Month Period. Under the 2001 Base Case, a
     Shortfall in Liquidity Reserve was not anticipated.

[30] Interest Payments

     In the Two Month Period, interest payments to the holders of the class A,
     B, C and D notes amounted to $4.1 million which is $23.3 million lower
     than assumed under the 2001 Base Case.

     Interest payments on the floating rate class A notes amounted to $4.1
     million, $9.1 million lower than assumed under the 2001 Base Case,
     reflecting a lower than expected level of average interest rates on the
     floating rate notes, the impact of which was partly offset by a higher
     principal balance outstanding on these notes than assumed in the 2001 Base
     Case. The 2001 Base Case assumed LIBOR to be 5.2% whereas the average
     monthly LIBOR rate in the Two Month Period was 1.2%. Our cashflows have
     been inadequate to pay any interest on the class B, C and D notes in the
     Two Month Period. Interest payments assumed under the 2001 Base Case in
     the Two Month Period amounted to $2.2 million, $4.8 million and $7.2
     million respectively on the class B, C and D notes. Interest has begun to
     accrue on the unpaid interest on the class B, C and D notes in accordance
     with the terms of these notes and will continue to accrue until the
     arrears of interest are paid in full. Accrued and unpaid interest
     (including interest accrued on unpaid interest) amounted to $2.9 million,
     $19.5 million and $29.6 million respectively on the class B, C and D notes
     following the July 15, 2004 payment date.

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

     Airplanes Group's $700 million subclass A-8 notes had an expected final
     payment date of March 15, 2003. Given current market conditions and the
     impact these conditions have had on our performance, we believed that such
     a refinancing at that time was not economically viable and therefore it
     did not proceed as scheduled. In accordance with the terms of the subclass
     A-8 notes, step-up interest of 0.5% per annum began to accrue on these
     notes from March 17, 2003 (the first business day following the expected
     final payment date) and will continue to accrue until they are repaid in
     full or refinanced. Under the priority of payments applicable to Airplanes
     Group, step-up interest is payable after payment of expenses, interest,
     minimum principal and scheduled principal on class A, B, C and D notes and
     any aircraft modification payments. To the extent that step-up interest is
     not paid, it will accrue in accordance with the terms of the subclass A-8
     notes. Available cashflows have not been sufficient to allow payment of
     step-up interest on any of the payment dates since March 2003 and this is
     expected to continue to be the case. Total step-up interest (including
     interest accrued on unpaid step-up interest) accrued and unpaid on the
     subclass A-8 notes at July 15, 2004 was $4.8 million.


                                      32
<PAGE>


[31] Swap and Swaption Cashflows

     Airplanes Group's net swap payments during the Two Month Period were $5.9
     million compared to $Nil assumed in the 2001 Base Case.

[33] Principal Payments

     In the forty month period from March 10, 2001 to July 15, 2004, total
     principal payments amounted to $440.8 million (comprising $389.3 million
     on the class A notes and $51.5 million on the class B notes), $166.1
     million less than assumed in the 2001 Base Case. The breakdown of the
     $166.1 million variance is set out on page 41. In the Two Month Period,
     total principal payments amounted to $18.4 million, (comprising $18.4
     million on the class A notes), $13.0 million less than assumed in the 2001
     Base Case. The breakdown of the $13.0 million variance is set out on page
     40.

     Applying the declining value assumptions in the 1996 Base Case to the
     original March 1996 fleet appraisals and adjusting for aircraft sales, the
     total appraised value of the aircraft was assumed to be $2,736.4 million
     at July 15, 2004. Our portfolio is appraised annually and the most recent
     appraisal was obtained on January 31, 2004 and valued the current
     portfolio at $2,023.2 million. Applying the declining value assumptions to
     this appraisal, the total appraised value was $1,942.0 million at July 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, we have been required to pay class A principal adjustment
     amount to the extent of available cashflows throughout the forty month
     period since the 2001 refinancing. However, we have not always had
     sufficient cashflows to pay class A principal adjustment amount in full
     and since the April 15, 2003 payment date, we have not had sufficient
     cashflows to pay any class A principal adjustment amount. Class A
     principal adjustment amount is intended to accelerate the principal
     amortization schedule of the class A notes when the appraised value of the
     aircraft declines at a greater rate than the decline in appraised values
     assumed in the 1996 Base Case by reference to certain loan to current
     appraised value ratios. Since the class A principal adjustment amount
     ranks ahead of the scheduled principal payments on the class C and D
     notes, and since available cashflows were not sufficient to pay all of the
     class A principal adjustment amount, scheduled principal payments on the
     class C and D notes have been deferred on each payment date during the
     forty month period since the 2001 refinancing. Total deferrals of class C
     and class D scheduled principal amounts amounted to $85.7 million and
     $54.9 million respectively as of July 15, 2004.

     Based on the most recent annual appraisal dated January 31, 2004, the
     decline in appraised values 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 arrears of class A principal adjustment amount at the
     February 17, 2004 payment date from $343.5 million to $451.2 million. The
     class A principal adjustment amount outstanding was $462.9 million as at
     July 15, 2004.


                                      33
<PAGE>


     To the extent that we have sufficient available funds, we are required to
     pay a minimum principal amount on the class A and B notes in order to
     maintain certain loan to initial appraised value ratios. (Since class A
     minimum principal amount is determined by reference to initial appraised
     values, it is unaffected by the annual appraisals referred to above). As a
     result of earlier payments of class A principal adjustment amounts,
     described above, we remained ahead of the required class A minimum
     principal payment schedule. However, as described above, we have not
     always had sufficient cashflows to pay class A principal adjustment
     amounts in full and since the April 15, 2003 payment date, we have not had
     sufficient cashflows to pay any class A principal adjustment amount. As a
     result, since the August 15, 2003 payment date we have no longer been
     ahead of the required class A minimum principal payment schedule.
     Therefore we had to recommence payments of minimum principal on the class
     A notes to the extent of available cashflows on that date. Our cashflows
     were insufficient to pay minimum principal on the class A notes in full
     beginning on the December 15, 2003 payment date and minimum principal
     arrears on the class A notes were $36.2 million following the July 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 $15.3 million following the July 15, 2004 payment date.

     The appraised values are based upon the value of the aircraft at normal
     utilization rates in an open, unrestricted and stable market, and take
     into account long-term trends, including current expectations of
     particular models becoming obsolete more quickly, as a result of airlines
     switching to different models, manufacturers ceasing production or lease
     values for aircraft declining more rapidly than previous predictions. As a
     theoretical value, the appraised value is not indicative of market value
     and thus there is no guarantee that we would obtain the appraised value
     upon sale of any aircraft. The current market value of each of our
     aircraft is less than, and in some cases such as the MD-11s, significantly
     less than the appraised value. If the current oversupply of aircraft
     continues longer term, given the age of our fleet, certain of our aircraft
     may become obsolete significantly earlier than the useful life expectancy
     assumed in the 2001 Base Case assumptions, which would negatively impact
     appraised values further. However, since we are no longer able to pay
     class A principal adjustment amount and since, as a result of our consent
     solicitation, we are no longer required to sell our aircraft at or above
     the note target price, the appraised values of our aircraft are now of
     little significance except as a basis for providing statistical
     information on the portfolio and for complying with certain technical
     provisions in the indentures.


                                      34
<PAGE>


     OTHER ISSUES

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


                                      35
<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       Revenue foregone on aircraft sold prior to their assumed sale
                            Sales......................... date in the 2001 Base Case net of revenue received on aircraft
                                                           remaining on lease after their assumed sale date in the 2001
                                                           Base Case
[5] S [1]...[4]           Contracted Lease Rentals.......  Current Contracted Lease Rentals due as at the latest
                                                           Calculation Date
[6]                       Movement in Current Arrears      Current Contracted Lease Rentals not received as at the latest
                          Balance........................  Calculation Date, excluding Bad Debts
[7]                       Less Net Stress Related Costs..
[8]                       - Bad Debts....................  Arrears owed by former lessees and deemed irrecoverable
[9]                       - Deferred Arrears Balance.....  Current arrears that have been capitalized and restructured as a
                                                           Note Payable
[10]                      - AOG..........................  Loss of rental due to an aircraft being off-lease and
                                                           non-revenue earning
[11]                      - Other Leasing Income.........  Includes lease termination 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  Fees (in excess of Minimum Incentive Fee above) paid to servicer
                            Fee                            for performance above an annually agreed target/on sale of an aircraft.
[22] [21]                 Sub-total
[23]                      Other Servicer Fees and Other    Administrative Agent, trustee and professional fees paid to
                          Overheads......................  other service providers and other overheads
[23A]                     Other SG&A Expenses............  Costs relating to the assumed refinancing of the subclass A-8
                                                           notes in March 2003, as assumed under the 2001 Base Case and
                                                           costs relating to the 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>


                                      36
<PAGE>


<TABLE>
                Airplanes Group Cashflow Performance for the Period from May 12, 2004 to July 15, 2004 (2 Months)
                                  Comparison of Actual Cashflows versus 2001 Base Case Cashflows

                                                                                      % of Lease Rentals under
                                                                                          the 2001 Base Case
                                                                2001                              2001
                                                                ----                              ----
                                                     Actual   Base Case   Variance   Actual    Base Case   Variance
                                                     ------   ---------   --------   ------    ---------   --------
                CASH COLLECTIONS                           ($ Millions)
<S>             <C>                                   <C>       <C>         <C>      <C>         <C>        <C>
1               Lease Rentals                         67.6      67.6        0.0      100.0%      100.0%     0.0%
2               - Renegotiated Leases                 (0.8)      0.0       (0.8)      (1.2%)       0.0%    (1.2%)
3               - Rental Resets                      (22.9)      0.0      (22.9)     (33.9%)       0.0%   (33.9%)
4               - Lease Rentals - Aircraft Sales      (2.8)      0.0       (2.8)      (4.1%)       0.0%    (4.1%)
                                                      ----      ----      -----       ----        ----    -----

5     S 1 - 4   Contracted Lease Rentals              41.1      67.6      (26.5)      60.8%      100.0%   (39.2%)
6               Movement in Current Arrears           (0.3)      0.0       (0.3)      (0.4%)       0.0%    (0.4%)
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                            0.0      (0.7)       0.7        0.0%       (1.0%)    1.0%
9               - Deferred Arrears Balance             1.3       0.0        1.3        1.9%        0.0%     1.9%
10              - AOG                                 (8.0)     (2.8)      (5.2)     (11.8%)      (4.2%)   (7.7%)
11              - Other Leasing Income                 0.4       0.0        0.4        0.6%        0.0%     0.6%
12              - Repossession                         0.0      (0.5)       0.5        0.0%       (0.8%)    0.7%
                                                      ----      ----      -----       ----        ----    -----
13    S 8 - 12  Sub-total                             (6.3)     (4.0)      (2.3)      (9.3%)      (6.0%)   (3.4%)
14    5+6+13    Net Lease Rental                      34.5      63.6      (29.1)      51.0%       94.1%   (43.0%)
15              Interest Earned                        0.1       1.1       (1.0)       0.1%        1.6%    (1.5%)
16              Aircraft Sales                         2.1       2.9       (0.8)       3.1%        4.3%    (1.2%)
17              Net Maintenance                        2.8       0.0        2.8        4.1%        0.0%     4.1%
18              Other Receipts                         0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                      ----      ----      -----       ----        ----    -----
19    S 14 - 18 Total Cash Collections                39.5      67.6      (28.1)      58.4%      100.0%   (41.6%)
                                                      ====      ====      =====       ====        ====    =====

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads       (7.0)    (3.4)      (3.6)     (10.4%)      (5.0%)   (5.3%)

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                        (3.9)     (3.6)      (0.3)      (5.8%)      (5.3%)   (0.4%)
                - Minimum Incentive Fee                0.0      (0.3)       0.3        0.0%       (0.4%)    0.4%
                - Core Cashflow/Sales Incentive        0.0       0.0        0.0        0.0%        0.0%     0.0%
                  Fee
22       21     Sub-total                             (3.9)     (3.9)       0.0       (5.8%)      (5.7%)   (0.1%)
23              Other Servicer Fees and Other         (0.9)     (1.5)       0.6       (1.3%)      (2.4%)   (1.0%)
                Overheads
23A             Other SG&A Expenses                    0.0       0.0        0.0        0.0%        0.0%     0.0%
                                                      ----      ----      -----       ----        ----    -----
24    22+23+23A Sub-total                             (4.8)     (5.4)       0.6       (7.1%)      (8.1%)   (1.0%)
                                                      ----      ----      -----       ----        ----    -----
25     24+20    Total Cash Expenses                  (11.8)     (8.8)      (3.0)     (17.5%)     (13.1%)   (4.4%)
                                                      ====      ====      =====       ====        ====    =====

                NET CASH COLLECTIONS
26       19     Total Cash Collections                39.5      67.6      (28.1)      58.4%      100.0%   (41.6%)
27       25     Total Cash Expenses                  (11.8)     (8.8)      (3.0)     (17.5%)     (13.1%)   (4.4%)
28              Movement in Expense Account            1.0       0.0        1.0        1.5%        0.0%     1.5%
29              Reduction in Liquidity Reserve         0.0       0.0        0.0        0.0%        0.0%     0.0%
29A             Shortfall in Liquidity Reserve        (0.3)      0.0       (0.3)      (0.4%)       0.0%    (0.4%)
30              Interest Payments                     (4.1)    (27.4)      23.3       (6.1%)     (40.5%)  (34.5%)
31              Swap Payments                         (5.9)      0.0       (5.9)      (8.7%)       0.0%    (8.7%)
                                                      ----      ----      -----       ----        ----    -----
32    S 26 - 31 TOTAL                                 18.4      31.4      (13.0)      27.2%       46.4%   (19.2%)
                                                      ====      ====      =====       ====        ====    =====

33              PRINCIPAL PAYMENTS
                Class A                               18.4      27.9       (9.5)     (27.2%)      41.3%   (14.1%)
                Class B                                0.0       3.5       (3.5)       0.0%        5.2%    (5.2%)
                                                      ----      ----      -----       ----        ----    -----
                Total                                 18.4      31.4      (13.0)      27.2%       46.4%   (19.2%)
                                                      ====      ====      =====       ====        ====    =====

                Debt Balances at July 15, 2004
                Subclass A-6                          56.1       0.0
                Subclass A-8                         700.0     700.0
                Subclass A-9                         750.0     652.2
                Class B                              226.8     214.6
                Class C                              349.8     349.8
                Class D                              395.1     395.1
                                                   -------   -------
                                                   2,477.8   2,311.7
                                                   =======   =======
</TABLE>


                                      37
<PAGE>


<TABLE>
               Airplanes Group Cashflow Performance for the Period from March 10, 2001 to July 15, 2004 (40 Months)
                                  Comparison of Actual Cashflows versus 2001 Base Case Cashflows

                                                                                   % of Lease Rentals under
                                                                                      the 2001 Base Case
                                                                2001                         2001
                                                                ----                         ----
                                                    Actual   Base Case   Variance  Actual  Base Case  Variance
                                                    ------   ---------   --------  ------  ---------  --------
                CASH COLLECTIONS                           ($ Millions)
<S>             <C>                                <C>         <C>           <C>   <C>       <C>         <C>
1               Lease Rentals                      1,395.0     1,395.0       0.0   100.0%    100.0%      0.0%
2               - Renegotiated Leases                (80.4)        0.0     (80.4)   (5.8%)     0.0%     (5.8%)
3               - Rental Resets                     (253.6)        0.0    (253.6)  (18.2%)     0.0%    (18.2%)
4               - Lease Rentals - Aircraft Sales     (15.1)        0.0     (15.1)   (1.1%)     0.0%     (1.1%)
                                                   -------     -------    ------    ----      ----     -----

5     S 1 - 4   Contracted Lease Rentals           1,045.9     1,395.0    (349.1)   75.0%    100.0%    (25.0%)
6               Movement in Current Arrears           (1.7)        0.0      (1.7)   (0.1%)     0.0%     (0.1%)
                Balance
7               less Net Stress Related Costs
8               - Bad Debts                          (10.2)      (14.0)      3.8    (0.7%)    (1.0%)     0.3%
9               - Deferred Arrears Balance            14.0         3.1      10.9     1.0%      0.2%      0.8%
10              - AOG                               (111.4)      (58.7)    (52.7)   (8.0%)    (4.2%)    (3.8%)
11              - Other Leasing Income                13.2         0.0      13.2     0.9%      0.0%      0.9%
12              - Repossession                        (4.1)      (11.2)      7.1    (0.3%)    (0.8%)     0.5%
                                                   -------     -------    ------    ----      ----     -----
13     S 8 - 12 Sub-total                            (98.5)      (80.8)    (17.7)   (7.1%)    (5.8%)    (1.3%)
14    5+6+13    Net Lease Rental                     945.7     1,314.2    (368.5)   67.8%     94.2%    (26.4%)
15              Interest Earned                        9.6        23.0     (13.4)    0.7%      1.6%     (1.0%)
16              Aircraft Sales                        37.3        43.6      (6.3)    2.7%      3.1%     (0.5%)
17              Net Maintenance                       75.5         0.0      75.5     5.4%      0.0%      5.4%
18              Other Receipts                         8.3         0.0       8.3     0.6%      0.0%      0.6%
                                                   -------     -------    ------    ----      ----     -----
19    S 14 - 18 Total Cash Collections             1,076.4     1,380.8    (304.4)   77.2%     99.0%    (21.8%)
                                                   =======     =======    ======    ====      ====     =====

                CASH EXPENSES
                Aircraft Operating Expenses
20              - Re-leasing and other overheads     (81.6)      (69.9)    (11.7)   (5.8%)    (5.0%)    (0.8%)

                SG&A Expenses
21              Aircraft Servicer Fees
                - Retainer Fee                       (74.6)      (74.3)     (0.3)   (5.3%)    (5.3%)    (0.0%)
                - Minimum Incentive Fee               (6.0)       (5.0)     (1.0)   (0.4%)    (0.4%)    (0.1%)
                - Core Cashflow/Sales Incentive Fee   (0.2)        0.0      (0.2)    0.0%      0.0%      0.0%
                                                     -----       -----    ------    ----      ----     -----
22       21     Sub-total                            (80.8)      (79.3)     (1.5)   (5.8%)    (5.7%)    (0.1%)
23              Other Servicer Fees and Other        (36.0)      (33.6)     (2.4)   (2.6%)    (2.4%)    (0.2%)
                Overheads
23A             Other SG&A Expenses                   (2.0)       (4.7)      2.7    (0.1%)    (0.3%)     0.2%
                                                     -----       -----    ------    ----      ----     -----
24    22+23+23A Sub-total                           (118.8)     (117.6)     (1.2)   (8.5%)    (8.4%)    (0.1%)
                                                     -----       -----    ------    ----      ----     -----

25     24+20    Total Cash Expenses                 (200.4)     (187.5)    (12.9)  (14.4%)   (13.4%)    (0.9%)
                                                    ======      ======     =====   =====     =====      ====

                NET CASH COLLECTIONS
26       19     Total Cash Collections             1,076.4     1,380.8    (304.4)   77.2%     99.0%    (21.8%)
27       25     Total Cash Expenses                 (200.4)     (187.5)    (12.9)  (14.4%)   (13.4%)    (0.9%)
28              Movement in Expense Account           (7.5)        0.0      (7.5)   (0.5%)     0.0%     (0.5%)
29              Reduction in Liquidity Reserve        40.0        40.0       0.0     2.9%      2.9%      0.0%
29A             Shortfall in Liquidity Reserve        45.4         0.0      45.4     3.3%      0.0%      3.3%
30              Interest Payments                   (350.8)     (598.2)    247.4   (25.1%)   (42.9%)    17.7%
5.1             Swap Payments                       (162.3)      (28.2)   (134.1)  (11.6%)    (2.0%)    (9.6%)
                                                     -----       -----    ------    ----      ----     -----
32    S 26 - 31 TOTAL                                440.8       606.9    (166.1)   31.6%     43.5%    (11.9%)
                                                     =====       =====    ======    ====      ====     =====

33              PRINCIPAL PAYMENTS
                Class A                              389.3       543.2    (153.9)   27.9%     38.9%    (11.0%)
                Class B                               51.5        63.7     (12.2)    3.7%      4.6%     (0.9%)
                                                     -----       -----    ------    ----      ----     -----
                Total                                440.8       606.9    (166.1)   31.6%     43.5%    (11.9%)
                                                     =====       =====    ======    ====      ====     =====

                Debt Balances at July 15, 2004
                Subclass A-6                          56.1         0.0      56.1
                Subclass A-8                         700.0       700.0       0.0
                Subclass A-9                         750.0       652.2      97.8
                Class B                              226.8       214.6      12.2
                Class C                              349.8       349.8       0.0
                Class D                              395.1       395.1       0.0
                                                   -------     -------     -----
                                                   2,477.8     2,311.7     166.1
                                                   =======     =======     =====
</TABLE>


<PAGE>


<TABLE>
                                                      Mar-01                               2001
                                                      ------                               ----
                                                     Closing            Actual        Base Case
                                                     -------            ------        ---------
                                                ($ Millions)      ($ Millions)      ($ Millions)
<S>   <C>                                            <C>                 <C>               <C>
      Net Cash Collections                                               440.8             606.9

      Add Back Interest and Swap Payments                                513.1             626.4
                                                                         -----           -------

  a   Net Cash Collections                                               953.9           1,233.3
                                                                         =====           =======
      (excl. interest and swap payments)
  b   Swaps                                                              162.3              28.2
  c   Class A Interest                                                   139.7             309.9
  d   Class A Minimum                                                    134.3               0.0
  e   Class B Interest                                                    20.5              50.1
  f   Class B Minimum                                                     51.5              63.7
  g   Class C Interest                                                    76.0              95.0
  h   Class D Interest                                                   114.6             143.2
  i   Class A Principal Adjustment                                       255.0             543.2
  i   Class C Scheduled                                                    0.0               0.0
  k   Class D Scheduled                                                    0.0               0.0
  l   Permitted Aircraft Modifications                                     0.0               0.0
  m   Step-up Interest                                                     0.0               0.0
  n   Class E Minimum Interest                                             0.0               0.0
  o   Class B Supplemental                                                 0.0               0.0
  p   Class A Supplemental                                                 0.0               0.0
                                                                         -----           -------
      Total                                                              953.9           1,233.3
                                                                         =====           =======

 [1]  Interest Coverage Ratio
      Class A                                                              3.2               3.6  = a/(b+c)
      Class B                                                              N/A               3.2  = a/(b+c+d+e)
      Class C                                                              N/A               2.3  = a/(b+c+d+e+f+g)
      Class D                                                              N/A               1.8  = a/(b+c+d+e+f+g+h)

 [2]  Debt Coverage Ratio
      Class A                                                              N/A               3.6  = 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                      3,1086.6           1,942.0           2,474.2
      Liquidity Reserve Amount of
      which
      - Cash                                           156.9              60.0             116.0
      - Accrued Expenses                                12.6              12.0               0.0
                                                     -------           -------           -------
      Subtotal                                         169.5              72.0             116.0
      Less Lessee Security Deposits                     36.9               0.0              36.0
                                                     -------           -------           -------
      Subtotal                                         132.6              72.0              80.0
                                                     -------           -------           -------
 [4]  Total Asset Value                              3,241.2           2,014.0           2,554.2
                                                     =======           =======           =======


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


      Class A                                        1,895.4  58.5%   1,506.1   74.8%  1,352.2  52.9%
      Class B                                          278.3  67.1%     226.8   86.0%    214.6  61.3%
      Class C                                          349.8  77.9%     349.8  103.4%    349.8  75.0%
      Class D                                          395.1  90.0%     395.1  123.0%    395.1  90.5%
                                                     -------          -------          -------
                                                     2,918.6          2,477.8          2,311.7
                                                     =======          =======          =======
</TABLE>


                                                                39
<PAGE>


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

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

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

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


                                      40
<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 June 30, 2004 and estimated fair value as of June 30,
2004, are as follows:

<TABLE>
                               Annual Interest                                                  Estimated Fair
                                    Rate           Principal Amount              Final             Value at
    Class of Notes            (Payable Monthly)    at June 30, 2004          Maturity Date      June 30, 2004*
    --------------            -----------------    ----------------          -------------      --------------
                                                       $ Million                                  $ Million
<S>                         <C>                            <C>              <C>                       <C>
    Subclass A-6            (LIBOR+.34%)                    65              March 15, 2019             64
    Subclass A-8            (LIBOR+.375%)                  700              March 15, 2019            578
    Subclass A-9            (LIBOR+.55%)                   750              March 15, 2019            368
    Class B                 (LIBOR+.75%)                   227              March 15, 2019             37
    Class C                 (8.15%)                        350              March 15, 2019             19
    Class D                 (10.875%)                      395              March 15, 2019             12
                                                         -----                                      -----
                                                         2,487                                      1,078
                                                         =====                                      =====
</TABLE>

----------
* Although the estimated fair values of the class A to D notes outstanding have
been determined by reference to prices as at June 30, 2004 provided by an
independent third party, these fair values do not reflect the market value of
these notes at a specific time and should not be relied upon as a measure of the
value that could be realized by a noteholder upon sale.

Interest Rate Management

The leasing revenues of Airplanes Group are generated primarily from lease
rental receipts which are based on either 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 receipts for
different rental periods. This interest rate exposure can be managed through the
use of interest rate swaps and other derivative instruments. The class A and B
notes bear floating rates of interest and the class C and class D notes bear
fixed rates of interest. The mix of fixed and floating rental receipts contains
a higher percentage of fixed rate receipts than the percentage of fixed rate
interest payments on the notes. One reason for this is the fact that the reset
periods on floating receipts payments are generally longer than the monthly
reset periods on the floating rate notes. Before November 17, 2003 we entered
into interest rate swaps in order to correlate the contracted fixed and floating
rental receipts to the fixed and floating interest payments on the notes. Since
November 17, 2003, however, we have ceased paying interest on our class B, C and
D notes.


                                       41
<PAGE>


We have therefore 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. We believe it prudent to continue to hedge our interest
rate exposure in respect of the class A notes and certificates as the mix of
fixed and floating rental receipts does not correlate to the floating payments
due on the class A notes and certificates. Our cashflows have been insufficient
to enable any funds to be allocated to the "Second Collection Account Top-up" in
the priority of payments since December 15, 2003. We have therefore not included
this cash balance in our hedging calculations from the end of 2003.

Under the swaps, Airplanes Group pays fixed amounts and receives floating
amounts on a monthly basis. The swaps amortize having regard to the expected
paydown schedule of the 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 receipts.

At June 30, 2004, Airplanes Group had unamortized swaps with an aggregate
notional principal balance of $1,250 million. The aggregate notional principal
balance of these swaps will reduce, by their terms, to an aggregate notional
principal balance of $700 million by March 31, 2005, to an aggregate notional
principal balance of $495 million by March 31, 2006, to an aggregate notional
principal balance of $275 million by March 31, 2007 and to an aggregate notional
principal balance of $90 million by March 2008. None of the swaps have a
maturity date extending beyond April 2008. The aggregate estimated fair market
value of the swaps at June 30, 2004 was ($49.8) million, that is the swaps were
"out-of-the-money", such that if sold, Airplanes Group would incur a loss of
$26.6 million, as detailed on the next page:


                                       42
<PAGE>


                               Airplanes Group Swap Book at June 30, 2004

<TABLE>
                 Notional                                                                        Estimated Fair
    Swap        Amount (1)                                 Final         Fixed Rate            Market Value ($)
    No.         $'millions       Effective Date        Maturity Date     Payable (2)         As at Jun 30, 2004
<S>  <C>            <C>             <C>    <C>           <C>    <C>        <C>                      <C>
     1             200              17-Feb-04            15-Jul-04         1.2000%                        6,455
     2              5               12-Oct-00            15-Jul-04         6.5850%                     (22,264)
     3              65              17-Jun-02            15-Jul-04         3.7700%                    (137,048)
     4              35              17-Sep-01            15-Sep-04         5.7125%                    (380,940)
     5              30              17-Jun-02            15-Oct-04         3.5800%                    (207,128)
     6              25              15-Jul-03            15-Nov-04         5.7650%                    (434,642)
     7              30              15-Apr-02            15-Dec-04         5.3975%                    (331,511)
     8              25              15-Apr-03            15-Dec-04         4.2350%                    (283,326)
     9              40              15-May-01            15-Jan-05         4.7950%                    (656,410)
     10             60              21-Aug-01            15-Feb-05         4.4195%                  (1,015,881)
     11              0 (3)          15-Oct-04            17-Oct-05         4.5650%                    (275,105)
     12             40              17-Oct-01            15-Nov-05         3.9475%                    (559,032)
     13              0 (3)          15-Jul-04            15-Dec-05         2.4475%                      631,114
     14            105              24-Jul-01            15-Dec-05         5.2850%                  (3,305,995)
     15             35              17-Nov-03            17-Jan-06         5.1150%                    (704,397)
     16            125              20-Dec-01            15-Feb-06         4.6350%                  (2,961,514)
     17             20              15-May-03            15-Mar-06         2.8800%                     (98,499)
     18             65              30-Jan-02            15-Apr-06         3.5040%                    (353,295)
     19             60              15-Mar-02            15-Apr-06         4.0125%                  (1,126,441)
     20             30              15-Dec-03            18-Apr-06         2.9425%                    (108,071)
     21            100              15-Aug-02            15-Jul-06         5.5500%                  (6,465,785)
     22              0 (3)          17-Oct-05            15-Oct-06         4.9400%                    (113,496)
     23              0 (3)          15-Jul-04            15-May-07         5.8620%                  (5,423,494)
     24             50              15-Mar-04            15-May-07         5.2020%                  (2,542,771)
     25             35              15-Apr-03            15-May-07         3.5350%                    (456,234)
     26              0 (3)          15-Dec-04            15-Jun-07         4.1300%                    (615,098)
     27             70              17-Mar-03            17-Sep-07         3.8700%                    (591,040)
     28              0 (3)          15-May-07            15-Nov-07         4.8000%                       98,647
     29              0 (3)          17-Sep-07            17-Dec-07         4.9440%                       12,272
     30              0 (3)          15-Jul-05            15-Apr-08         3.4800%                    1,857,958

              ---------------                                                          -------------------------
                  1,250                                                                            (26,562,972)
              ===============                                                          =========================
</TABLE>

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

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

     3)   The initial amounts for swaps number 11, 13, 22, 23, 26, 28, 29 and 30
          are $15 million, $60 million, $10 million, $65 million, $90 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.


                                       43
<PAGE>


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.

If we are required by the rating agencies to purchase swaptions, the premium
would be payable 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 (ahead of
class A minimum principal amount). 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 but given our current cashflow performance
it is highly unlikely we would ever be able to make such payment.

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

Our indentures required that any counterparty with whom we enter into a swap
have at least a short-term unsecured debt rating of A-1+ from Standard & Poor's
and a long-term unsecured debt rating of A1 from Moody's. It was proving
increasingly difficult to find counterparties meeting these requirements and
therefore, as further described under "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operation s- Recent
Developments", the board of directors of Airplanes Limited and the controlling
trustees of Airplanes Trust resolved to undertake a consent solicitation
seeking, among other things, to amend the indentures so as to reduce the
required rating for a swap counterparty to a short-term unsecured debt rating of
at least A-1 from Standard & Poor's and a long-term unsecured debt rating of at
least A2 from Moody's or otherwise as approved by the Board with the prior
agreement of the rating agencies. The consent solicitations were successful and
the indentures accordingly amended in September 2003. However, because of our
financial condition, notwithstanding the changes to the indentures, the
availability of counterparties has become very limited. Consequently we may not
be able to enter into any further interest rate swaps. As a result we have
concluded that in such circumstances we may partially hedge the vehicle against
a significant adverse movement in interest rates through the purchase of a
limited amount of out of the money interest rate caps.

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".


                                       44
<PAGE>


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, 2004 for more
information about risks, especially lessee credit risk, that could intensify
Airplanes Group's exposure to changes in interest rates.


                                       45
<PAGE>


Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

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

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

(b) Changes in internal controls

There were no changes in the internal controls of Airplanes Group over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Exchange Act Rules 13a-15(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.


                                       46
<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 January 31, 2004. 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 and in June 2004, the Superior Court of Justice found
in favour of VASP granting VASP's special appeal with the consequent dismissal
of debis AirFinance Ireland's rescission action. debis AirFinance Ireland has
indicated that it will continue to actively pursue all available courses of
action, including appeals and if necessary initiating a new rescission action. A
risk of repossession by VASP would only arise if VASP were successful on appeal
in seeking repossession of the aircraft and the aircraft were located in Brazil.
Brazilian counsel to debis AirFinance Ireland believe that VASP may not commence
a repossesion action as VASP has indicated that it may instead file a motion for
damages suffered as a result of the repossession of the aircraft. We cannot at
this point quantify the amount of this potential damages claim. Although none of
our lessees which lease any of the relevant aircraft is based in Brazil, some of
them may operate those aircraft into Brazil from time to time.

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

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


                                       47
<PAGE>


Item 2. Changes in Securities and Use of Proceeds

Not Applicable

Item 3. Defaults Upon Senior Securities

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

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


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

Not Applicable


Item 6. Exhibits and Reports on Form 8-K

The following exhibits are included herein:

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

32     Section 1350 Certification

Reports on Form 8-K:
Filed on April 15, 2004, May 17, 2004 and June 15, 2004 (relating to the monthly
report to holders of the certificates).


                                       48
<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: August 9, 2004                    AIRPLANES LIMITED


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


Date: August 9, 2004                    AIRPLANES LIMITED


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


<PAGE>


                       AIRPLANES GROUP PORTFOLIO ANALYSIS
                                AT JUNE 30, 2004



<TABLE>
                                                                                                      Appraised      % of Portfolio
                                                                                                      Value          by Appraised
                                                                               Aircraft      Serial   January 31,    Value as of Jan
Region             Country                     Lessee                            Type        Number   2004           31, 2004

<S>                <C>                         <C>                            <C>            <C>      <C>            <C>
Africa             Kenya                       East African Safari Air,
                                               Limited                        B767-300ER      24948     38,679             1.91%
Africa             Nigeria                     Bellview Airlines Ltd          B737-200A       23024     1,997              0.10%
Africa             South Africa                Nationwide Airlines            B767-300ER      26200     41,936             2.07%
Africa             Tunisia                     Nouvelair Tunisie              A320-200         348      23,223             1.15%
Africa             Tunisia                     Nouvelair Tunisie              MD83            49631     11,174             0.55%
Africa             Tunisia                     Nouvelair Tunisie              MD83            49672     9,522              0.47%
Asia & Far East    Bangladesh                  GMG Airlines                   DHC8-300         307      5,735              0.28%
Asia & Far East    China                       China Southern                 B737-500        24897     13,642             0.67%
Asia & Far East    China                       China Southern                 B737-500        25182     14,269             0.71%
Asia & Far East    China                       China Southern                 B737-500        25183     14,845             0.73%
Asia & Far East    China                       China Southern                 B737-500        25188     14,858             0.73%
Asia & Far East    China                       Xinjiang                       B757-200        26156     26,091             1.29%
Asia & Far East    Indonesia                   Garuda                         B737-400        24683     16,772             0.83%
Asia & Far East    Indonesia                   Garuda                         B737-400        24691     17,129             0.85%
Asia & Far East    Indonesia                   Merpati Nusantara Airlines     B737-200A       22368     2,054              0.10%
Asia & Far East    Indonesia                   Merpati Nusantara Airlines     B737-200A       22369     1,951              0.10%
Asia & Far East    Indonesia                   PT Adam SkyConnection
                                               Airlines                       B737-400        26071     18,757             0.93%
Asia & Far East    Indonesia                   PT Mandala Airlines            B737-200A       21685     1,464              0.07%
Asia & Far East    Indonesia                   PT Mandala Airlines            B737-200A       22278     1,617              0.08%
Asia & Far East    Indonesia                   PT Mandala Airlines            B737-200A       22803     2,367              0.12%
Asia & Far East    Indonesia                   PT Mandala Airlines            B737-200A       22804     2,314              0.11%
Asia & Far East    Indonesia                   PT Mandala Airlines            B737-200A       23023     2,544              0.13%
Asia & Far East    Indonesia                   PT Metro Batavia               B737-200A       22397     2,104              0.10%
Asia & Far East    Indonesia                   PT Metro Batavia               B737-200A       22407     2,135              0.11%
Asia & Far East    Indonesia                   PT Metro Batavia               B737-200A       22802     1,797              0.09%
Asia & Far East    Indonesia                   PT Metro Batavia               B737-400        24345     15,710             0.78%
Asia & Far East    Indonesia                   PT Metro Batavia               B737-400        24687     16,453             0.81%
Asia & Far East    Malaysia                    AirAsia Berhad                 B737-300        24905     16,467             0.81%
Asia & Far East    Malaysia                    AirAsia Berhad                 B737-300        24907     16,560             0.82%
Asia & Far East    Pakistan                    Pakistan Int Airline           A300B4-200       269      4,131              0.20%
Asia & Far East    Philippines                 Philippine Airlines            B737-400        24684     16,270             0.80%
Asia & Far East    Philippines                 Philippine Airlines            B737-300        24770     14,697             0.73%
Asia & Far East    Philippines                 Philippine Airlines            B737-400        26081     19,484             0.96%
Asia & Far East    South Korea                 Asiana Airlines                B737-400        24493     15,767             0.78%
Asia & Far East    South Korea                 Asiana Airlines                B737-400        24520     16,354             0.81%
Asia & Far East    Taiwan                      Far Eastern Air Transport      MD83            49950     11,627             0.57%
</TABLE>


<PAGE>


<TABLE>
                                                                                                      Appraised      % of Portfolio
                                                                                                      Value          by Appraised
                                                                               Aircraft      Serial   January 31,    Value as of Jan
Region             Country                     Lessee                            Type        Number   2004           31, 2004

<S>                <C>                         <C>                            <C>            <C>      <C>            <C>
Australia & New
  Zealand          Australia                   National Jet Systems           DHC8-100         229      3,573              0.18%
Europe             Bulgaria                    BH Air                         A320-200         294      22,722             1.12%
Europe             Bulgaria                    BH Air                         A320-200         349      24,214             1.20%
Europe             Czech Republic              Travel Servis a.s.             B737-400        24911     17,468             0.86%
Europe             France                      Air France                     A320-200         203      20,910             1.03%
Europe             France                      Air France                     A320-200         220      21,680             1.07%
Europe             Hungary                     SkyEurope Airlines Hungary
                                               Kft                            B737-500        25185     14,966             0.74%
Europe             Hungary                     SkyEurope Airlines Hungary
                                               Kft                            B737-500        25289     14,737             0.73%
Europe             Iceland                     Air Atlanta Icelandic          B767-300ER      26204     41,877             2.07%
Europe             Iceland                     Bluebird Cargo                 B737-300SF      23499     13,011             0.64%
Europe             Iceland                     Bluebird Cargo                 B737-300SF      23500     12,674             0.63%
Europe             Italy                       Air One SpA                    B737-400        24906     17,152             0.85%
Europe             Italy                       Air One SpA                    B737-400        24912     17,308             0.86%
Europe             Italy                       Air One SpA                    B737-300        25179     17,054             0.84%
Europe             Italy                       Air One SpA                    B737-300        25187     17,357             0.86%
Europe             Italy                       Meridiana SpA                  MD83            49792     11,291             0.56%
Europe             Italy                       Meridiana SpA                  MD83            49935     11,474             0.57%
Europe             Italy                       Meridiana SpA                  MD83            49951     12,334             0.61%
Europe             Netherlands                 Capital Aviation Services
                                               B.V.                           DHC8-300         244      5,202              0.26%
Europe             Netherlands                 Capital Aviation Services
                                               B.V.                           DHC8-300         276      5,402              0.27%
Europe             Norway                      Wideroe's Flyveselskap a/s     DHC8-300         293      5,701              0.28%
Europe             Norway                      Wideroe's Flyveselskap a/s     DHC8-300         342      6,112              0.30%
Europe             Portugal                    euroAtlantic airways           B767-300ER      25411     41,234             2.04%
Europe             Slovakia                    SkyEurope Airlines, a.s        B737-500        25186     13,917             0.69%
Europe             Slovakia                    SkyEurope Airlines, a.s        B737-500        25191     15,088             0.75%
Europe             Slovakia                    SkyEurope Airlines, a.s        B737-500        25288     14,657             0.72%
Europe             Spain                       Futura                         B737-400        24689     16,426             0.81%
Europe             Spain                       Futura                         B737-400        24690     16,305             0.81%
Europe             Spain                       Futura                         B737-400        25180     18,341             0.91%
Europe             Spain                       Spanair                        MD83            49620     10,012             0.49%
Europe             Spain                       Spanair                        MD83            49624     9,644              0.48%
Europe             Spain                       Spanair                        MD83            49626     10,028             0.50%
Europe             Spain                       Spanair                        MD83            49709     9,922              0.49%
Europe             Spain                       Spanair                        MD83            49936     12,367             0.61%
Europe             Spain                       Spanair                        MD83            49938     11,637             0.58%
Europe             Tunisia                     Nouvelair Tunisie              A320-200         301      22,440             1.11%
Europe             Turkey                      FreeBird Airlines              MD83            49949     12,018             0.59%
Europe             Turkey                      Orbit Ekspres Havayollari
                                               A.S.                           A300C4-200       83       8,377              0.41%
Europe             Turkey                      Turk Hava Yollari              B737-400        24917     17,517             0.87%
Europe             Turkey                      Turk Hava Yollari              B737-400        25181     17,807             0.88%
Europe             Turkey                      Turk Hava Yollari              B737-400        25184     18,174             0.90%
Europe             Turkey                      Turk Hava Yollari              B737-400        25261     18,675             0.92%
Europe             Turkey                      Turk Hava Yollari              B737-400        26065     18,392             0.91%
Europe             United Kingdom              Air Southwest                  DHC8-300         296      5,753              0.28%
</TABLE>


<PAGE>


<TABLE>
                                                                                                      Appraised      % of Portfolio
                                                                                                      Value          by Appraised
                                                                               Aircraft      Serial   January 31,    Value as of Jan
Region             Country                     Lessee                            Type        Number   2004           31, 2004

<S>                <C>                         <C>                            <C>            <C>      <C>            <C>
Europe             United Kingdom              Air Southwest                  DHC8-300         334      6,263              0.31%
Europe             United Kingdom              easyJet Airline Company
                                               Limited                        B737-300        23923     13,499             0.67%
Europe             United Kingdom              Titan Airways Limited          ATR42-300        109      2,778              0.14%
Europe             United Kingdom              Titan Airways Limited          ATR42-300        113      2,840              0.14%
Europe             United Kingdom              Titan Airways Limited          B757-200        26151     25,565             1.26%
Latin America      Antigua                     Caribbean Star Airlines        DHC8-300         232      5,240              0.26%
Latin America      Antigua                     Caribbean Star Airlines        DHC8-300         266      5,596              0.28%
Latin America      Antigua                     Caribbean Star Airlines        DHC8-300         267      5,781              0.29%
Latin America      Antigua                     Caribbean Star Airlines        DHC8-300         298      5,839              0.29%
Latin America      Antigua                     Caribbean Star Airlines        DHC8-300         300      5,706              0.28%
Latin America      Antigua                     Liat                           DHC8-100         113      2,567              0.13%
Latin America      Antigua                     Liat                           DHC8-100         140      2,714              0.13%
Latin America      Antigua                     Liat                           DHC8-100         144      2,808              0.14%
Latin America      Antigua                     Liat                           DHC8-100         270      3,197              0.16%
Latin America      Antigua                     Liat                           DHC8-300         283      5,524              0.27%
Latin America      Brazil                      Promodal Transportes
                                               Aereos Ltda.                   DC8-71F         45970     8,111              0.40%
Latin America      Brazil                      TAM Linhas Aereas              F100            11284     6,463              0.32%
Latin America      Brazil                      TAM Linhas Aereas              F100            11285     6,113              0.30%
Latin America      Brazil                      TAM Linhas Aereas              F100            11304     6,504              0.32%
Latin America      Brazil                      TAM Linhas Aereas              F100            11305     6,865              0.34%
Latin America      Brazil                      TAM Linhas Aereas              F100            11336     7,209              0.36%
Latin America      Brazil                      TAM Linhas Aereas              F100            11347     7,292              0.36%
Latin America      Brazil                      TAM Linhas Aereas              F100            11348     6,540              0.32%
Latin America      Brazil                      TAM Linhas Aereas              F100            11371     6,578              0.33%
Latin America      Colombia                    Avianca                        B767-200ER      25421     30,425             1.50%
Latin America      Colombia                    Avianca                        B757-200        26154     24,859             1.23%
Latin America      Colombia                    Avianca                        MD83            49939     12,030             0.59%
Latin America      Colombia                    Avianca                        MD83            49946     11,937             0.59%
Latin America      Colombia                    Avianca                        MD83            53120     12,685             0.63%
Latin America      Colombia                    Avianca                        MD83            53125     12,979             0.64%
Latin America      Colombia                    Tampa                          DC8-71F         45945     7,211              0.36%
Latin America      Colombia                    Tampa                          DC8-71F         45976     9,007              0.45%
Latin America      Colombia                    Tampa                          DC8-71F         46066     6,814              0.34%
Latin America      Mexico                      Aeromexico                     MD82            49660     8,003              0.40%
Latin America      Mexico                      Aeromexico                     MD82            49667     8,029              0.40%
Latin America      Mexico                      Aeromexico                     MD87            49673     8,914              0.44%
Latin America      Mexico                      Mexicana                       F100            11266     6,970              0.34%
Latin America      Mexico                      Mexicana                       F100            11309     7,594              0.38%
Latin America      Mexico                      Mexicana                       F100            11319     7,398              0.37%
Latin America      Mexico                      Mexicana                       F100            11339     6,687              0.33%
Latin America      Mexico                      Mexicana                       F100            11374     7,584              0.37%
Latin America      Mexico                      Mexicana                       F100            11375     7,347              0.36%
Latin America      Mexico                      Mexicana                       F100            11382     7,654              0.38%
Latin America      Mexico                      Mexicana                       F100            11384     7,530              0.37%
</TABLE>


<PAGE>


<TABLE>
                                                                                                      Appraised      % of Portfolio
                                                                                                      Value          by Appraised
                                                                               Aircraft      Serial   January 31,    Value as of Jan
Region             Country                     Lessee                            Type        Number   2004           31, 2004

<S>                <C>                         <C>                            <C>            <C>      <C>            <C>
Latin America      Netherlands Antilles        Dutch Caribbean Airline        DHC8-300C        230      5,253              0.26%
N America          Canada                      Air Canada                     A320-200         174      20,485             1.01%
N America          Canada                      Air Canada                     A320-200         175      20,703             1.02%
N America          Canada                      Air Canada                     A320-200         232      20,839             1.03%
N America          Canada                      Air Canada                     A320-200         284      21,171             1.05%
N America          Canada                      Air Canada                     A320-200         309      21,862             1.08%
N America          Canada                      air Canada                     A320-200         404      23,260             1.15%
N America          Canada                      Jetsgo Airlines                MD83            49941     11,867             0.59%
N America          Canada                      Jetsgo Airlines                MD83            49943     12,545             0.62%
N America          United States of America    Air Transport International    DC8-71F         45811     7,862              0.39%
N America          United States of America    Air Transport International    DC8-71F         45813     7,199              0.36%
N America          United States of America    Air Transport International    DC8-71F         45973     7,409              0.37%
N America          United States of America    Air Transport International    DC8-71F         45978     6,505              0.32%
N America          United States of America    Air Transport International    DC8-71F         45993     7,609              0.38%
N America          United States of America    Air Transport International    DC8-71F         45994     6,453              0.32%
N America          United States of America    Air Transport International    DC8-71F         46065     7,175              0.35%
N America          United States of America    Astar Air Cargo                DC8-73CF        46091     9,664              0.48%
N America          United States of America    Frontier Airlines, Inc.        B737-300        23177     11,033             0.55%
N America          United States of America    Pace Airlines                  B737-300        23749     12,763             0.63%
N America          United States of America    TWA Airlines LLC               MD83            49575     9,250              0.46%
N America          Uruguay                     PLUNA Lineas Aereas
                                               Uraguayas S.A.                 ATR42-300        284      4,163              0.21%
Off Lease          Off Lease                   Off Lease                      DHC8-300C        242      5,116              0.25%
Off Lease          Off Lease                   Off Lease                      ATR42-300        249      3,825              0.19%
Off Lease          Off Lease                   Off Lease                      DHC8-100         258      3,292              0.16%
Off Lease          Off Lease                   Off Lease                      B747-200SF      21730     16,180             0.80%
Off Lease          Off Lease                   Off Lease                      B737-200A       22979     2,697              0.13%
Off Lease          Off Lease                   Off Lease                      B737-400        26069     18,583             0.92%
Off Lease          Off Lease                   Off Lease                      DC8-71F         45849     6,927              0.34%
Off Lease          Off Lease                   Off Lease                      DC8-71F         45996     6,654              0.33%
Off Lease          Off Lease                   Off Lease                      DC8-71F         45997     10,398             0.51%
Off Lease          Off Lease                   Off Lease                      DC9-32          48125     1,343              0.07%
Off Lease          Off Lease                   Off Lease                      DC9-32          48126     1,258              0.06%
Off Lease          Off Lease                   Off Lease                      DC9-32          48127     1,128              0.06%
Off Lease          Off Lease                   Off Lease                      DC9-32          48128     1,301              0.06%
Off Lease          Off Lease                   Off Lease                      DC9-32          48129     1,595              0.08%
Off Lease          Off Lease                   Off Lease                      MD11            48499     38,667             1.91%
Off Lease          Off Lease                   Off Lease                      MD11            48500     39,690             1.96%
Off Lease          Off Lease                   Off Lease                      MD11            48501     40,112             1.98%
Off Lease          Off Lease                   Off Lease                      MD83            49390     8,028              0.40%
Off Lease          Off Lease                   Off Lease                      MD83            49442     8,824              0.44%
Off Lease          Off Lease                   Off Lease                      MD83            49789     10,814             0.53%
Others             Ukraine                     Ukraine International          B737-400        25190     18,348             0.91%
Others             Ukraine                     Ukraine International          B737-500        25192     14,672             0.73%
Others             Ukraine                     Ukraine International          B737-500        26075     14,029             0.69%
                                                                                                     ---------------------------
                                                                                                     2,023,246           100.00%
                                                                                                     ===========================
</TABLE>