SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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


                                    FORM 10-Q

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

         For the quarterly period ended December 31, 1999

                                       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)                                (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 [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

                                                            Outstanding at
Issuer                               Class                 December 31, 1999

Airplanes Limited      Common Stock, $1.00 par value              30


<PAGE>


                   Airplanes Limited and Airplanes U.S. Trust

          Form 10-Q for the Three Month Period Ended December 31, 1999

                                      Index

Part I.   Financial Information                                         Page No.

Item 1.   Financial Statements (Unaudited)                                  3

o   Unaudited Condensed Balance Sheets - December 31, 1999 and March
    31, 1999
o   Unaudited Condensed Statements of Operations - Three Months Ended
    December 31, 1999 and December 31, 1998
o   Unaudited Condensed Statement of Operations - Nine Months ended
    December 31, 1999 and December 31, 1998.
o   Unaudited Condensed Statements of Changes in Shareholders Deficit /
    Net Liabilities - Nine months Ended December 31, 1999 and
    December 31, 1998
o   Unaudited Condensed Statements of Cash Flows - Nine Months Ended
    December 31, 1999 and December 31, 1998
o   Notes to the Unaudited Condensed Financial Statements


Item 2.   Management's Discussion and Analysis of Financial                 10
          Condition and Results of Operations

Item 3.   Quantitative and Qualitative Disclosures about Market Risks       28

Part II.  Other Information

Item 1.   Legal Proceedings                                                 33

Item 6.   Exhibits and Reports on Form 8 - K                                34

Signatures

Index to Exhibits

                                        2

<PAGE>

Part I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)



                                 AIRPLANES GROUP

                       UNAUDITED CONDENSED BALANCE SHEETS


<TABLE>
                                                    March 31,                                 December 31,
                                     ----------------------------------------  -----------------------------------------
                                                      1999                                       1999
                                     ----------------------------------------  -----------------------------------------
                                      Airplanes     Airplanes                   Airplanes      Airplanes
                                       Limited        Trust       Combined       Limited         Trust       Combined
                                     ------------  ------------  ------------  ------------   ------------  ------------
                                                   ($millions)                                ($millions)
ASSETS

<S>                                  <C>            <C>          <C>           <C>            <C>           <C>
Cash                                         218             6           224           205              6           211
Accounts receivable
    Trade receivables                         38             5            43            26              6            32
    Allowance for doubtful debts             (14)           (3)          (17)           (9)            (2)          (11)
Amounts due from Airplanes Limited             0            35            35                           33            33
Intercompany capital lease                    36             -            36            34                           34
Net investment in capital and sales
     type leases                              20            36            56            16             34            50
Aircraft, net                              2,820           252         3,072         2,703            240         2,943
Other assets                                   4             0             4             4              0             4
                                     ------------  ------------  ------------  ------------   ------------  ------------
Total assets                               3,122           331         3,453         2,979            317         3,296
                                     ============  ============  ============  ============   ============  ============


LIABILITIES

Accrued expenses and other liabilities       581            51           632           742             70           812
Amounts due from Airplanes Trust              35             0            35            33              0            33
Intercompany capital lease                     -            36            36             0             34            34
Indebtedness                               3,500           342         3,842         3,352            327         3,679
Provision for maintenance                    266            17           283           272             18           290
Deferred income taxes                         51            48            99            51             48            99
                                     ------------  ------------  ------------  ------------   ------------  ------------
Total liabilities                          4,433           494         4,927         4,450            497         4,947
                                     ------------  ------------  ------------  ------------   ------------  ------------
Net liabilities                           (1,311)         (163)       (1,474)       (1,471)          (180)       (1,651)
                                     ------------  ------------  ------------  ------------   ------------  ------------
                                           3,122           331         3,453         2,979            317         3,296
                                     ============  ============  ============  ============   ============  ============
</TABLE>


                                        3

<PAGE>

                                 AIRPLANES GROUP

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
                                                        Three Months Ended December 31,
                                   ---------------------------------------------------------------------------
                                                  1998                                   1999
                                   ------------------------------------  -------------------------------------
                                   Airplanes    Airplanes                Airplanes    Airplanes
                                    Limited       Trust      Combined     Limited       Trust       Combined
                                   -----------  ----------  -----------  -----------  -----------  -----------
                                                ($millions)                           ($millions)


<S>                                <C>          <C>         <C>          <C>          <C>          <C>
Revenues
Aircraft leasing                          121          10          131          113           10          123
Aircraft sales                              2           -            2            -            -            -
Other income                                -           -            -            -            -            -

Expenses
Cost of Aircraft sold                      (1)          -           (1)           -            -            -
Depreciation and amortisation             (40)         (4)         (44)         (40)          (4)         (44)
Net interest expense                     (102)        (10)        (112)        (108)         (11)        (119)
Provision for maintenance                 (17)          -          (17)         (16)          (1)         (17)
Bad and doubtful debts                      -          (1)          (1)           7            -            7
Provision for loss making leases, net       3           -            3           (1)           -           (1)
Other lease costs                          (3)          -           (3)          (5)           -           (5)
Selling, general and administrative
     expenses                              (9)          -           (9)          (8)          (1)          (9)
                                   -----------  ----------  -----------  -----------  -----------  -----------
Operating (loss) before
provision for  income taxes               (46)         (5)         (51)         (58)          (7)         (65)
Income tax benefit/(charge)                 -           -            -            3            -            3
                                   -----------  ----------  -----------  -----------  -----------  -----------
Net (loss)                                (46)         (5)         (51)         (55)          (7)         (62)
                                   ===========  ==========  ===========  ===========  ===========  ===========
</TABLE>



                                        4

<PAGE>

                                 AIRPLANES GROUP

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
                                                         Nine Months Ended December 31,
                                   ---------------------------------------------------------------------------
                                                  1998                                   1999
                                   ------------------------------------  -------------------------------------
                                   Airplanes    Airplanes                Airplanes    Airplanes
                                    Limited       Trust      Combined     Limited       Trust       Combined
                                   -----------  ----------  -----------  -----------  -----------  -----------
                                                ($millions)                           ($millions)

<S>                                <C>          <C>          <C>          <C>          <C>          <C>
Revenues
Aircraft leasing                          367          32
Aircraft sales                             28          94          399          352           31          383
                                                                   122            2            -            2
Other income                                                         -            1            -            1

Expenses
Cost of Aircraft sold                     (25)        (85)        (110)          (1)           -           (1)
Depreciation and amortisation            (120)        (12)        (132)        (119)         (12)        (131)
Net interest expense                     (287)        (30)        (317)        (313)         (32)        (345)
Provision for maintenance                 (50)         (3)         (53)         (49)          (3)         (52)
Bad and doubtful debts                     (3)         (1)          (4)           -            1            1
Provision for loss making leases, net       8           1            9            5            1            6
Other lease costs                         (18)         (1)         (19)         (13)          (1)         (14)
Selling, general and administrative
     expenses                             (25)         (2)         (27)         (25)          (2)         (27)
                                   -----------  ----------  -----------  -----------  -----------  -----------
Operating (loss) before
provision for  income taxes              (125)         (7)        (132)        (160)         (17)        (177)
Income tax benefit/(charge)                 2           -            2            -            -            -
                                   -----------  ----------  -----------  -----------  -----------  -----------
Net (loss)                               (123)         (7)        (130)        (160)         (17)        (177)
                                   ===========  ==========  ===========  ===========  ===========  ===========
</TABLE>

                                        5

<PAGE>

                                 AIRPLANES GROUP

    UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES

            Nine Months Ended December 31, 1998 and December 31, 1999


<TABLE>
                                             Airplanes Limited              Airplanes Trust     Combined
                                  ----------------------------------------  ----------------  ------------
                                    Share         Net      Shareholders'          Net         Shareholders
                                   Capital     Liabilities    Deficit         Liabilities     Deficit/ Net
                                                                                              Liabilities
                                  ----------------------------------------  ----------------  -----------
                                  ($millions)  ($millions)   ($millions)      ($millions)     ($millions)


<S>                               <C>          <C>         <C>              <C>               <C>
Balance at March 31, 1998                 0        1,146            1,146               150        1,296

Net loss for the period                              123              123                 7          130
                                  ----------   ----------  ---------------  ----------------  -----------
Balance at December 31, 1998              0        1,269            1,269               157        1,426
                                  ==========   ==========  ===============  ================  ===========


Balance at March 31, 1999                 0        1,311            1,311               163        1,474

Net loss for the period                              160              160                17          177
                                  ----------   ----------  ---------------  ----------------  -----------
Balance at December 31, 1999              0        1,471            1,471               180        1,651
                                  ==========   ==========  ===============  ================  ===========

</TABLE>

                                        6

<PAGE>

                                 AIRPLANES GROUP

                   UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS


<TABLE>
                                                                     Nine Months Ended December 31,
                                            -------------------------------------------------------------------------------
                                                             1998                                    1999
                                            ---------------------------------------  --------------------------------------
                                            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                                          (123)           (7)         (130)        (160)          (17)        (177)
Adjustment to reconcile (net loss)
to net cash provided by operating activities:
Depreciation and amortisation                      120            12           132          119            12          131
Aircraft maintenance, net                          (23)           (2)          (25)           7             1            8
Profit on disposal of aircraft                      (3)           (9)          (12)          (1)            -           (1)
Deferred income taxes                               (2)            -            (2)           -             -            -
Provision for loss making leases                    (8)           (1)           (9)          (5)           (1)          (6)
Provision for bad debts                              3             1             4            -            (1)          (1)
Accrued and deferred interest expense              130            12           142          173            17          190

Changes in operating assets & liabilities:
Accounts receivable, net                            (6)           (1)           (7)           5             1            6
Intercompany account movements                     (15)           15             -           (2)            2            -
Other accruals and liabilities                     (22)           (2)          (24)          (2)            1           (1)
Other assets                                         4             -             4           (2)            -           (2)

                                            -----------   -----------  ------------  -----------  ------------  -----------
Net cash provided by operating activities           55            18            73          132            15          147
                                            ===========   ===========  ============  ===========  ============  ===========


Cash flows from investing activities
Purchase/Sale of aircraft                           42            79           121            -             -            -
Intercompany movements - Airplanes Group            79           (79)
Capital and sales type leases                        6             -             6            6             -            6
Net cash provided by                        -----------   -----------  ------------  -----------  ------------  -----------
investing activities                               127             -           127            6             -            6
                                            ===========   ===========  ============  ===========  ============  ===========

Cash flows from financing activities
Decrease in indebtedness                          (190)          (18)         (208)        (151)          (15)        (166)
Net cash used in
                                            -----------   -----------  ------------  -----------  ------------  -----------
    financing activites                           (190)          (18)         (208)        (151)          (15)        (166)
                                            ===========   ===========  ============  ===========  ============  ===========

Net decrease in cash                                (8)            -            (8)         (13)            -          (13)

Cash at beginning of period                        212             6           218          218             6          224
                                            -----------   -----------  ------------  -----------  ------------  -----------

Cash at end of period                              204             6           210          205             6          211
                                            ===========   ===========  ============  ===========  ============  ===========

Cash paid in respect of:
Interest                                           169            17           186          143            15          158
                                            ===========   ===========  ============  ===========  ============  ===========

</TABLE>

                                        7

<PAGE>


                            Airplanes Group

Notes to the Unaudited Condensed Financial Statements

1.  Securitization Transaction

    On March 28, 1996, ("the Closing Date"), AerFi Group plc ("AerFi Group") and
its subsidiary undertakings ("AerFi") re-financed on a long term basis certain
indebtedness due to commercial banks and other senior secured debt. The
re-financing was effected through a major aircraft securitization transaction
("the Transaction").

    Under the terms of the Transaction, the following special purpose vehicles
were formed: 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"). Airplanes Group acquired directly or
indirectly from AerFi a portfolio of 229 commercial aircraft (collectively, the
"Aircraft") and related leases (the "Leases"). The Transaction was effected by
transferring existing subsidiaries of AerFi that owned the Aircraft to Airplanes
Limited and Airplanes Trust, respectively. References to Airplanes Group in
these notes to the unaudited condensed financial statements may relate to
Airplanes Limited and Airplanes Trust on a combined or individual basis as
applicable.

    Simultaneously with such transfers, Airplanes Group issued notes of $4,048
million in aggregate principal amount in four classes: Class A, Class B, Class C
and Class D ("Notes") with approximately 90% of the principal amount of Notes in
each class being issued by Airplanes Limited and approximately 10% by Airplanes
Trust. Airplanes Group also issued Class E Notes of $604 million ranking after
the Notes and these were taken up by AerFi as part consideration for the
transfer of the Aircraft and certain related lease receivables. Of the $604
million Class E Notes issued, approximately $13 million were subsequently
canceled on July 30, 1996 under the terms of the Transaction.

    On March 16, 1998, Airplanes Group successfully completed a refinancing of
$2,437 million of Class A and Class B Notes. On November 20, 1998, AerFi Group
and its subsidiary, AerFi, Inc. transferred their Class E Notes to General
Electrical Capital Corporation. Indebtedness at December 31, 1999 represents the
aggregate of the Class A - D Notes and Class E Notes in issue (net of
approximately $0.4 million of discounts on issue and net of $13 million of Class
E Notes subsequently canceled as referred to above). Airplanes Limited and
Airplanes Trust have each fully and unconditionally guaranteed each others'
obligations under the relevant notes.

                                        8

<PAGE>


2.  Basis of Preparation

    The accompanying unaudited condensed financial statements of Airplanes
Limited, Airplanes Trust and the combined unaudited condensed balance sheets,
statements of operations, statement of changes in shareholders deficit/net
liabilities and statements of cash flows of Airplanes Group (together the
"financial statements") have been prepared on a going concern basis in
conformity with United States generally accepted accounting principles. The
financial statements are presented on a historical cost basis.

    The accompanying financial statements for Airplanes Limited and Airplanes
Trust reflect all adjustments which in the opinion of management are necessary
to present a fair statement of the information presented as of December 31, 1999
and for the three and nine month periods ending December 31, 1999 and December
31, 1998. Such adjustments are of a normal, recurring nature. The results of
operations for the three and nine months ended December 31, 1999 are not
necessarily indicative of the results to be expected for the full year.


The accompanying financial statements of Airplanes Limited and Airplanes Trust
have been prepared in accordance with generally accepted accounting principles
for interim financial information and in accordance with the requirements of the
Report on Form 10-Q. Consequently, they do not include all the disclosure
normally required by generally accepted accounting principles. For further
information regarding Airplanes Group and its financial condition, results of
operations and cash flows, refer to the audited financial statements and notes
thereto included in Airplanes Group's annual Report on Form 10-K for the year
ended March 31, 1999, previously filed with the Securities and Exchange
Commission.

                                        9

<PAGE>


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

Introduction

On March 28, 1996, Airplanes Pass Through Trust (the "Trust") issued $4,048
million of Pass Through Certificates (the "1996 Certificates") in four classes -
Class A, Class B, Class C and Class D. The Class A 1996 Certificates were
further subdivided into five separate subclasses (A-1 through A-5). Each class
and subclass of the Certificates represents an interest in two corresponding
classes or subclasses of notes (collectively, the "1996 Notes") issued by
Airplanes Limited ("Airplanes Limited") and Airplanes U.S. Trust ("Airplanes
Trust"). Airplanes Limited, together with Airplanes Trust and their respective
subsidiaries comprise Airplanes Group ("Airplanes Group"). Airplanes Limited and
Airplanes Trust have each fully and unconditionally guaranteed (the "1996
Guarantees") the other's obligations under each class or subclass of 1996 Notes.
Also on March 28, 1996, Airplanes Group received the net proceeds from an
underwritten offering of the 1996 Certificates (the "Underwritten Offering") in
exchange for the 1996 Notes. Airplanes Group used such net proceeds, together
with approximately $604 million in aggregate principal amount of a fifth class
of Airplanes Group notes (the "Class E Notes") to acquire certain subsidiaries
of AerFi Group plc ("AerFi Group" and, together with its subsidiaries and
affiliates, "AerFi"). Of the $604 million of Class E Notes issued, approximately
$13 million were canceled in July 1996 based on the purchase price adjustment
provisions in the agreements pursuant to which these subsidiaries of AerFi Group
were sold to Airplanes Group. The acquired subsidiaries owned 229 aircraft (the
"Aircraft") and related leases to 82 aircraft operators in 40 countries as at
March 31, 1996. As at December 31, 1999, 27 of these Aircraft had been sold and
one Aircraft had suffered a constructive total loss. At December 31, 1999, 195
of the remaining 201 Aircraft were on lease to 73 operators in 39 countries.

On March 16, 1998, the Trust issued additional Class A Certificates in three
separate subclasses (A-6 through A-8) and new Class B Certificates (the "1998
Refinancing Certificates" and together with the 1996 Certificates, the
"Certificates"). Also on this date, the Trust completed an underwritten offering
of the 1998 Refinancing Certificates (the "Refinancing") in exchange for an
interest in two corresponding Subclass A-6, Subclass A-7, Subclass A-8 and Class
B notes issued by Airplanes Limited and Airplanes Trust (the "1998 Refinancing
Notes and together with the 1996 Notes, the "Notes"). Airplanes Limited and
Airplanes Trust have each guaranteed the other's obligations under their
respective 1998 Refinancing Notes (the "Refinancing Guarantees" and together
with the 1996 Guarantees, the "Guarantees"). The proceeds of this offering were
used to refinance the Trust's Subclass A-1, Subclass A-2, Subclass A-3 and
existing Class B 1996 Certificates.

On November 20, 1998, AerFi Group and its subsidiary, AerFi, Inc. transferred
their Class E Notes to General Electric Capital Corporation.

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

                                       10

<PAGE>


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, inter alia,
Airplanes Limited and Airplanes Trust are not intended to be regarded as
separate businesses but rather on the basis of one combined aircraft fleet.
Furthermore, each of Airplanes Limited and Airplanes Trust has fully and
unconditionally guaranteed the performance of the other under their respective
Notes. The 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.


General

Substantially all of Airplanes Group's business is expected to consist of
aircraft operating lease activities. However, Airplanes Group may also engage in
aircraft sales subject to certain limitations and guidelines. Airplanes Group's
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 the portfolio of Aircraft
owned by Airplanes Group and (iii) Airplanes Group's financial resources and
liquidity position relative to its competitors who may possess substantially
greater financial resources.


Cashflow Performance Relative to March 1998 Assumptions

The March 16, 1998 prospectus relating to the Refinancing contained various
assumptions (the "1998 Assumptions") regarding Airplanes Group's future revenues
and cash inflows. In the period from the March 10, 1998 Calculation Date to the
January 11, 2000 Calculation Date (the "Period"), the cash performance of
Airplanes Group was $14 million ahead of the 1998 Assumptions. This was entirely
due to Aircraft sales of $87 million not assumed in the 1998 Assumptions. This
positive sales variance was substantially offset by Net Operating Cashflows
which were $74 million lower than the 1998 Assumptions in the Period. ("Net
Operating Cashflows" comprise gross lease revenue cashflows after selling,
general and administrative expenses, maintenance costs, operating costs
(including interest costs) and expenditure due to Aircraft downtime, defaults,
repossession and bad debts.) In addition, during the Period, Airplanes Group
exercised an option to purchase shares in an airline which Airplanes Group had
been granted under the terms of a lease of an Aircraft to this lessee. The
shares were subsequently sold yielding net proceeds of $1 million.

At January 18, 2000, having made the principal and interest distributions on
that date, Airplanes Group held cash balances of $178 million, $164 million in
the liquidity reserve and $14 million in the expense account. The cash balances
retained by Airplanes Group in the form of the liquidity reserve and expense
account decreased by $17 million between March 1998 and January 2000 which, when
combined with the positive cash performance of $14 million, resulted in
principal distributions in the Period of $31 million higher than the 1998
Assumptions.

                                       11

<PAGE>


Aircraft Sales

Sales proceeds of $134 million were received in the Period in respect of the
sale of 20 Aircraft which included six DC8-71Fs, one B737-300, four B737-200As
and one A300-B4-100 which was scrapped. In addition, Airplanes Group disposed of
eight DC9 Aircraft pursuant to a lessee purchase option, all of which were over
25 years old at date of sale and the proceeds received for these Aircraft were
negligible. The 1998 Assumptions reflected sales proceeds of $47 million in
respect of the sale of three DC8-71F Aircraft only.

Net Operating Cashflows

Net Operating Cashflows were $74 million lower than the 1998 Assumptions in the
Period due to the following:

Lease revenue receipts

Lease revenue receipts were $32 million lower than the 1998 Assumptions in the
Period. This negative variance is primarily as a result of a number of lessees
going into arrears on their rental payments ($19 million), revenue foregone due
to Aircraft sales ($25 million) and other net negative variances ($14 million)
due to differences in lease rates and interest rate movements. These factors
were partially offset by the fact that revenue lost through downtime and
defaults was $26 million lower than assumed in the 1998 Assumptions.

Net maintenance costs

Net maintenance costs were higher than the 1998 Assumptions by approximately $30
million (the 1998 Assumptions assumed that net maintenance cashflows would be
zero) primarily due to the acceleration of maintenance events in the amount of
$19 million due to Aircraft repossessions, the return of $7 million in
maintenance reserves to a Latin American lessee as a result of the restructuring
of its leases and a greater than expected incidence of maintenance events in the
Period. Maintenance expenditure may vary significantly from period to period as
it is impacted by the timing and incidence of checks, where checks are
performed, the type and age of the Aircraft as well as events such as lease
extensions and early redeliveries. In addition to maintenance expenditure,
Airplanes Group also incurs technical costs with respect to the Aircraft which
are included in "Other leasing/repossession costs".

Other leasing/repossession costs

Other leasing costs were approximately $27 million greater than the 1998
Assumptions in the Period. The 1998 Prospectus assumed that other leasing costs
would amount to 2% of lease revenues. Since March 1998 other leasing costs have
amounted to approximately 5% of lease revenues. In general, other leasing costs
have exceeded the 1998 Assumption primarily due to high transition costs on
Aircraft delivering to new lessees in the Period and the level of payments made
in the form of lessor contributions to defray certain technical costs during the
term of certain leases. These contributions included mainly, payments made in
the form of lessor contributions to engine refurbishment costs on two A300
Aircraft.

                                       12

<PAGE>


In addition, repossession costs at 0.7% of lease revenues received were $1
million lower than the 1998 Assumptions of 0.8%. These repossession costs were
primarily in respect of three MD83 Aircraft repossessed from Sunways and four
F100 Aircraft repossessed from Sempati. To a lesser extent they were also
related to one B737-400 Aircraft repossessed from Nordic East and one B737-200A
Aircraft which was redelivered from an Indonesian lessee and subsequently sold
in September 1998.

Net interest payments (including hedging costs)

Net interest payments (including hedging costs) were $25 million lower than the
1998 Assumptions due to the following:

Interest payments on the floating rate Class A ($16 million) and Class B ($2
million) Notes were lower than assumed as a result of a combination of lower
principal balances outstanding due to the greater than assumed principal
amortisation and the lower interest rate environment. Also, since the February
1999 Payment Date there has been a suspension of payments of the Class E Minimum
Interest Amount ($6 million cumulative to-date) due to the reallocation of
cashflows to the more senior Note classes as a result of a greater than assumed
reduction in aircraft valuations in the period to February 5, 1999.

Net interest swap payments which were $2 million lower than the 1998 Assumptions
included a net cash inflow of $11.25 million on the re-couponing/unwinding of 30
of Airplanes Group's portfolio of 44 Swaps (refer to Interest Rate Management on
page 31). In addition, payments of $2 million in respect of the Minimum and
Supplemental Hedge Payments in the Period were not assumed in the 1998
Assumptions.

Interest income receipts were $2 million higher than the 1998 Assumptions due to
higher cash balances retained in Airplanes Group.

Security Deposits

There was a net decrease of $11 million in lessee security deposits held by
Airplanes Group over the Period which was not assumed in the 1998 Assumptions.
This decrease was represented by an equivalent movement in the Liquidity
Reserve.

Principal Distributions

As a result of the above, Airplanes Group repaid $31 million more debt in the
Period than assumed in the 1998 Assumptions. Distributions of principal to the
Class A Certificateholders were $41 million greater than assumed and
distributions of principal to the Class B Certificateholders were $7 million
lower than assumed. The February 1999 decrease in aircraft valuations resulted
in a reallocation of cashflows in favour of the Class A Notes through the
payment of Class A Principal Adjustment Amounts and a deferral of payments of
the Class C and D Scheduled Principal Amounts. However, on December 15, 1999
arrears of the Class A Principal Adjustment Amounts were eliminated and payments
of the Class C Scheduled Principal Amounts recommenced. On January 18, 2000, the
deferred Class C Scheduled Principal Amounts were paid in full and payments of
the Class D Scheduled Principal Amounts commenced. Following the distributions
to Certificateholders on January 18, 2000, the arrears of Class D Scheduled
Principal Amounts were $3 million.

                                       13

<PAGE>


Recent Developments

The aircraft leasing industry is being adversely affected by a significant
increase in the numbers of aircraft available for lease or sale, with a
corresponding negative impact on aircraft values and lease rates of certain
aircraft types. Airplanes Group has twenty two Aircraft to remarket before June
30, 2000. These comprise (2 x B737 300's / 400's, 3 x B727/B737-200A's, 6 x DHC
8-300's, 9 x DC9 and 2 x B767-300). As a result of the current over supply of
aircraft in the market place, Airplanes Group may experience difficulties in
placing certain of these Aircraft at satisfactory lease rates and without
incurring substantial downtime. The Servicer is in discussions with two lessees
concerning lease receivables which may result in the Aircraft being repossessed.
In the event that the Servicer decides to repossess these Aircraft, Airplanes
Group would have additional Aircraft to place in the current market environment.

Trading conditions in the civil aviation industry have been adversely affected
by the severe economic and financial difficulties experienced in Latin America.
This downturn has undermined business confidence in the region and has had an
adverse impact on the results of operations of some of Airplanes Group's lessees
in the region which may adversely affect Airplanes Group's future revenues and
cashflows.

Brazil has experienced significant downturns in its economy and financial
markets, with large decreases in financial asset prices and, since it devalued
its currency on January 13, 1999, dramatic decreases in the value of its
currency. Continued weakness in the value of the Brazilian real, as well as
general deterioration in the Brazilian economy will mean that lessees may be
unable to generate sufficient revenues in Brazilian currency to pay the
dollar-denominated rental payments under the leases. At present it appears that
some consolidation may take place in Brazil with the possible merger of a number
of Brazilian airlines being suggested by market analysts. Future developments in
the political systems or economies of Brazil and other Latin American countries
may have a material adverse effect on lessee operations in those countries. At
December 31, 1999, Airplanes Group leased 67 Aircraft representing 32.41% of its
portfolio by Appraised Value to operators in Latin America of which 15 Aircraft
representing 12.97% of the portfolio by Appraised Value were leased to operators
in Brazil. Accordingly, further deterioration in the Latin American economies,
especially Brazil, could lead to a material decrease in Airplanes Group's
leasing revenues and an increase in default related costs.

The Servicer is currently in negotiation with a Brazilian lessee with regard to
restructuring outstanding receivables. The lessee leases eight F100 Aircraft
(3.26% of the portfolio by Appraised Value). In the three months ended December
31, 1999, the Servicer completed a restructuring of outstanding receivables with
one Brazilian lessee, the lessor of three MD11 Aircraft and three B737-500
Aircraft (7.99% of the portfolio by Appraised Value). Through a combination of
cash payments by the lessee in December 1999 ($4.3 million) and reduced security
deposits ($4.4 million) (which will be reinstated over the term of the lease)
the balance was cleared.

Colombia has recently suffered as a result of the deterioration in the value of
the Colombian Peso and the resulting negative impact on the Colombian economy.
Airplanes Group leases to

                                       14

<PAGE>


three Colombian lessees which operate ten Aircraft, representing 6.56% of the
portfolio by Appraised Value. Continued weakness in the value of the Colombian
Peso, as well as general deterioration in the Colombian economy, will mean that
these lessees may be unable to generate sufficient revenues in the Colombian
currency to pay the dollar denominated rental payments under the leases. During
the three months ended December 31, 1999, one lessee with whom the Servicer, on
behalf of Airplanes Group, entered into a restructuring agreement, repaid $2.2
million of restructured lease rental and maintenance payments.

At December 31, 1999, five lessees operate thirteen aircraft representing 8.90%
of the Aircraft by Appraised Value in Turkey, which was hit by a severe
earthquake in August 1999. Four of these carriers operate charter flights which
are heavily dependent on foreign tourists travelling to Turkey. Damage caused by
the earthquake and any fall-off in tourist traffic may adversely affect the
ability of these carriers to operate and meet their obligations under the
leases.

The economies of Indonesia, Thailand, South Korea, Malaysia and the Philippines
have experienced particularly acute difficulties resulting in many business
failures, significant depreciation of local currencies against the dollar (the
currency in which lease payments are payable), sovereign and corporate credit
ratings downgrades and defaults, and in certain cases, internationally organized
financial stability measures. The economic difficulties in Indonesia have
resulted in civil disturbances and a change of government in that country.
Several airlines in the region have announced their intention to reschedule
their aircraft purchase obligations, reduce headcount and eliminate certain
routes. Since 1990, the market in this region for aircraft on operating lease
has demonstrated significant growth rates. However, should the recessionary
conditions that now prevail in large parts of the region last for a significant
period of time these will have an adverse impact on operators in the region as
well as global aircraft demand. At December 31, 1999, Airplanes Group leased 16
Aircraft, representing 9.37% of its portfolio by Appraised Value, to operators
in Asia and the Far East.

The U.S. Federal Aviation Administration (the "FAA") has indicated that it will
develop in the near term a new test specification for insulation for the purpose
of increasing fire safety on aircraft. The FAA has also begun discussion with
the international aviation authorities on this matter. In addition, the FAA has
indicated that it will propose requiring the use of improved insulation once the
new test standard is developed. It is possible that additional service
bulletins, new maintenance practices and mandatory airworthiness directives may
be issued while the new standard for insulation is developed. If new standards
for insulation are implemented, Airplanes Group could incur significant costs in
ensuring the Aircraft comply with these standards which could impact adversely
on Airplanes Group's results of operations. It is currently not clear whether or
to what extent manufacturers, owners or lessees would be responsible for the
costs necessary to bring aircraft into compliance with such new test standards.

                                       15

<PAGE>


Results of Operations - Three Months Ended December 31, 1999 Compared with Three
Months Ended December 31, 1998.

There is considerable uncertainty facing the markets in which Airplanes Group's
lessees operate due to the continuing Asian financial crisis, the substantial
difficulties facing the Russian political and financial system and the
devaluation of the Brazilian currency. Despite this and although a small number
of lessees performed poorly, Airplanes Group's results of operations for the
three months ended December 31, 1999 continued to be relatively stable. Overall,
Airplanes Group generated $58 million in cash from operations in the three
months to December 31, 1999 compared to $22 million in the same period of the
previous year. The increase in cash generated from operations in the three month
period to December 31, 1999 is primarily attributable to a decrease in cash paid
in respect of interest and a cash receipt relating to the re-couponing and
unwinding of 30 of Airplanes Group's Swaps. In addition there was a reduction in
the level of receivables and a net inflow of maintenance reserves. In the three
months to December 31, 1998, there was a net outflow of maintenance reserves due
to the acceleration of maintenance events (including as a result of Aircraft
repossessions) and the return of $7 million in maintenance reserves to a Latin
American lessee as a result of the restructuring of its leases. This has been
partially offset by a reduction in lease revenues due to previous Aircraft
sales, and a greater number of off lease aircraft during the three months ended
December 31, 1999. There was a net loss after taxation for the three months to
December 31, 1999 of $62 million (Airplanes Limited: $55 million; Airplanes
Trust: $7 million) compared to a net loss after taxation for the three months to
December 31, 1998 of $51 million (Airplanes Limited: $46 million; Airplanes
Trust: $5 million). The increase in the net loss for the period was primarily
attributable to additional interest being charged on accrued but unpaid Class E
Note interest.

Leasing Revenues

Leasing revenues (which include maintenance reserve receipts which Airplanes
Group receives from certain of its lessees) for the three months ended December
31, 1999 were $123 million (Airplanes Limited: $113 million; Airplanes Trust:
$10 million) compared with $131 million (Airplanes Limited: $121 million;
Airplanes Trust: $10 million) for the three months ended December 31, 1998. The
decrease in 1999 was primarily attributable to the reduction in the number of
Aircraft on lease in the period to December 31, 1999, as a consequence of
Aircraft sales and a greater number of Aircraft off lease during the three
months ended December 31, 1999. At December 31, 1999, Airplanes Group had 195 of
its 201 Aircraft on lease (Airplanes Limited: 177 Aircraft; Airplanes Trust: 18
Aircraft) compared to 202 of its 204 Aircraft on lease (Airplanes Limited: 184
Aircraft; Airplanes Trust: 18 Aircraft) at December 31, 1998.

Aircraft Sales

There were no sales in the three months ended December 31, 1999. Sales revenues
of $2 million (Airplanes Limited: $2million; Airplanes Trust: Nil) in respect of
the sale of two DC9-14 Aircraft and six DC9-15 Aircraft were received in the
three months ended December 31, 1998. The net book value of the Aircraft at the
date of sale was $1 million (Airplanes Limited: $1 million, Airplanes Trust:
Nil).

                                       16

<PAGE>


Depreciation and Amortization

The charge for depreciation and amortization in the three months ended December
31, 1999 amounted to $44 million (Airplanes Limited: $40 million; Airplanes
Trust: $4 million) compared with $44 million (Airplanes Limited: $40 million;
Airplanes Trust: $4 million) for the comparative period in 1998.

Net Interest Expense

Net interest expense was $119 million (Airplanes Limited: $108 million;
Airplanes Trust: $11 million) in the three month period ended December 31, 1999
compared to $112 million (Airplanes Limited: $102 million; Airplanes Trust: $10
million) in the three month period ended December 31, 1998. The increase in net
interest expense was primarily due to a combination of offsetting factors:
additional interest charged on accrued but unpaid Class E Note interest of $14
million and lower average debt in the three months to December 31, 1999. In
addition, the net interest expense for the three month period ended December 31,
1998 included a one-time expense of $2 million recognised on the value of
swaptions.

The weighted average interest rate on the Class A - D Notes during the three
months to December 31, 1999 was 6.86% and the average debt in respect of the
Class A - D Notes outstanding during the period was $3,136 million. The Class E
Notes accrue interest at a rate of 20% per annum (as adjusted by reference to
the U.S. consumer price index, effective March 28, 1996). The weighted average
interest rate on the Class A - D Notes during the three months to December 31,
1998 was 6.69% and the average debt in respect of the Class A - D Notes
outstanding during the period was $3,312 million.

The difference for the three months ended December 31, 1999 in Airplanes Group's
net interest expense of $119 million (Airplanes Limited: $108 million; Airplanes
Trust: $11 million) and cash paid in respect of interest of $51 million
(Airplanes Limited: $46 million; Airplanes Trust: $5 million) is substantially
accounted for by the fact that interest on the Class E Notes is accrued but
unpaid, in the three months ended December 31, 1999.

Net interest expense is stated after deducting interest income earned during the
relevant period. In the three months ended December 31, 1999, Airplanes Group
earned interest income (including lessee default interest) of $4 million
(Airplanes Limited: $4 million; Airplanes Trust: Nil) compared with $3 million
in the three months ended December 31, 1998 (Airplanes Limited: $3 million;
Airplanes Trust: Nil).

At December 31, 1999, Airplanes Group had options on interest rate swaps
("Swaptions") with a notional principal of $289 million. The value of the
Swaptions decreased by approximately $0.2 million during the three months ended
December 31, 1999. As Swaptions do not qualify for hedge accounting under US
GAAP, the decrease in fair value of $0.2 million has been included in interest
expense in the statement of operations.

                                       17

<PAGE>


Bad Debt and Loss-Making Lease 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 small number of Airplanes Group's lessees failed to meet their
contractual obligations in the three month period ended December 31, 1999,
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 credit
of $7 million in respect of bad and doubtful debts (Airplanes Limited: $7
million; Airplanes Trust: $Nil million) in the three months ended December 31,
1999, compared with an overall net charge of $1 million for the three months
ended December 31, 1998 (Airplanes Limited: $Nil million; Airplanes Trust: $1
million). The net credit in 1999 was primarily as a result of provisions
released in respect of two Brazilian lessees and one Colombian lessee which was
partially offset by provisions required in relation to one Irish lessee.

A lease agreement is deemed to be `loss making' in circumstances where the
contracted rental payments are insufficient to cover the depreciation and
allocated interest attributable to the aircraft plus certain direct costs, such
as legal fees and registration costs, attributable to the lease over its term.
For these purposes, interest is allocated to individual aircraft based on the
weighted average interest cost of the principal balance of the Notes and the
Class E Notes (excluding, in the case of the Class E Notes, the element of
interest (9% per annum) which is payable only in the event that the principal
amount of all the Notes is repaid). This results in a significant number of
leases being `loss making' while still being cash positive. The significant
`loss making' leases signed in the three months to December 31, 1999 related to
two Fokker 100 Aircraft, on lease to a Latin American lessee. In the three
months to December 31, 1998, the only significant "loss making" lease signed
related to a B767 Aircraft on lease to a Latin American lessee. Consequently,
there was an overall net provision of $1 million (Airplanes Limited: $1 million;
Airplanes Trust: $Nil million) in respect of `loss making' lease provisions in
the three months ended December 31, 1999, compared with the three month period
to December 31, 1998, where there was an overall net utilisation of $3 million
(Airplanes Limited: $3 million; Airplanes Trust: $Nil million).

Other Lease Cost

Other lease costs, comprising mainly Aircraft related technical expenditure, in
the three months ended December 31, 1999 amounted to $5 million (Airplanes
Limited: $5 million; Airplanes Trust: $Nil million) compared to other lease
costs of $3 million (Airplanes Limited: $3 million; Airplanes Trust: Nil) in the
three months to December 31, 1998.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period to
December 31, 1999 amounted to $9 million (Airplanes Limited: $8 million;
Airplanes Trust: $1 million). This is a comparable expense to that incurred in
the three months to December 31, 1998 of $9 million (Airplanes Limited: $9
million; Airplanes Trust: $Nil million).

                                       18

<PAGE>


The most significant element of selling, general and administrative expenses are
the Aircraft servicing fees paid to GECAS. 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 to December 31, 1999 and the
three months to December 31, 1998 include $6 million (Airplanes Limited: $5
million; Airplanes Trust: $1 million) relating to GECAS servicing fees.

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the period to December 31, 1999 was $2
million (Airplanes Limited: $2 million; Airplanes Trust: Nil) in respect of
administrative agency and cash management fees payable to AerFi, similar to the
charge of $2 million for the period to December 31, 1998.

Operating Loss

The operating loss for the three months ended December 31, 1999 was $65 million
(Airplanes Limited: $58 million; Airplanes Trust: $7 million) compared with an
operating loss of $51 million for the three months ended December 31, 1998
(Airplanes Limited: $46 million; Airplanes Trust: $5 million). Airplanes Limited
and Airplanes Trust are expected to continue to report substantial losses in the
future.

Taxes

There was a tax credit of $3 million (Airplanes Limited: $3 million; Airplanes
Trust : Nil) required in the three months to December 31, 1999, as compared with
no tax movement for the three months ended December 31, 1998.

Net Loss

The net loss after taxation for the three months ended December 31, 1999 was $62
million (Airplanes Limited: $55 million; Airplanes Trust: $7 million) compared
with a net loss after taxation for the three months ended December 31, 1998 of
$51 million (Airplanes Limited: $46 million; Airplanes Trust: $5 million).

                                       19

<PAGE>


Financial Resources and Liquidity

There was an overall net decrease in cash of $2 million for the three months to
December 31, 1999, compared with a net decrease in cash of $9 million for the
three months to December 31, 1998.

Liquidity

The cash balances at December 31, 1999 amounted to $211 million (Airplanes
Limited: $205 million; Airplanes Trust: $6 million) compared to cash balances at
December 31, 1998 of $210 million (Airplanes Limited: $204 million; Airplanes
Trust: $6 million.)

Operating Activities

Net cash provided by operating activities in the three months ended December 31,
1999 amounted to $58 million (Airplanes Limited: $52 million; Airplanes Trust:
$6 million) compared with $22 million in the three months ended December 31,
1998 (Airplanes Limited: $19 million; Airplanes Trust: $3 million). This
includes cash paid in respect of interest of $51 million in the three months to
December 31, 1999 (Airplanes Limited: $46 million; Airplanes Trust: $5 million)
compared with $61 million in the three months to December 31, 1998 (Airplanes
Limited: $55 million; Airplanes Trust: $6 million). The increase in cash
provided by operating activities in the three month period to December 31, 1999
is primarily attributable to a reduction in cash paid in respect of interest and
a cash receipt relating to the re-couponing and unwinding of 30 of Airplanes
Group's Swaps. In addition, there was a reduction in receivables balances
combined with a reduction in the level of maintenance payments in the three
month period to December 31, 1999. This was partially offset by a reduction in
lease revenues due to Aircraft sales and a greater number of off lease Aircraft
in the three months to December 31, 1999.

Investing and Financing Activities

Cash flows from investing activities in the three months to December 31, 1999
reflects the cash provided by capital and sales type leases which was $2 million
(Airplanes Limited: $2 million; Airplanes Trust: Nil) as compared with $2
million in the three months ended December 31, 1998 (Airplanes Limited: $2
million; Airplanes Trust: Nil). In the three months ended December 31, 1998,
Airplanes Group also received sales proceeds of $2 million (Airplanes Limited:
$2 million; Airplanes Trust: Nil) from the sale of eight DC9 Aircraft.

Cash flows from financing activities in the three months to December 31, 1999
primarily reflect the repayment of $62 million of principal on Subclass A-6,
Class B and Class C Notes by Airplanes Group (Airplanes Limited: $56 million;
Airplanes Trust: $6 million) compared with $34 million of principal repaid on
Subclass A6, Class B and Class C Notes by Airplanes Group (Airplanes Limited:
$31 million; Airplanes Trust: $3 million) in the three months to December 31,
1998. The increase in principal repayments in the three months ended December
31, 1999 as compared to the three months ended December 31, 1998, is due to an
increase in cash provided by operating activities as discussed above.

                                       20

<PAGE>


Indebtedness

Airplanes Group's indebtedness consisted of Class A-E Notes in the amount of
$3,679 million (Airplanes Limited: $3,352 million; Airplanes Trust: $327
million) at December 31, 1999 and $3,873 million (Airplanes Limited: $3,529
million; Airplanes Trust: $344 million) at December 31, 1998. Airplanes Group
had $591 million Class E Notes outstanding at December 31, 1999 and December 31,
1998. In order to repay principal on the Subclass A-4, A-7 and A-8 Notes on
their expected maturity dates, Airplanes Group will have to refinance such Notes
in the capital markets. In order to avoid stepped up interest costs, $200
million of Subclass A-4 Notes, $550 million of Subclass A-7 Notes and $700
million in Subclass A-8 Notes will have to be refinanced through the sale of
further pass-through certificates by March 2003, 2001 and 2003, respectively.
There can be no assurance that the Trust will be able to sell further
pass-through certificates in the amounts and at the times required and any
failure to do so may have the impact of increasing Airplanes Group's borrowing
costs.


New Accounting Pronouncement

Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133") was issued in September
1998. This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognizes all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value.

Airplanes Group is currently reviewing implementation of the requirements of
SFAS No. 133. Airplanes Group is required to implement SFAS No. 133 by April 1,
2001.

                                       21

<PAGE>


Results of Operations - Nine Months Ended December 31, 1999 Compared with Nine
Months Ended December 31, 1998.

Airplanes Group's results of operations for the nine months ended December 31,
1999 reflected a continuation of reasonably favorable industry conditions.
However, as discussed in - " Results of Operations - Three Months Ended December
31, 1999 Compared with Three Months Ended December 31, 1998" - there is
considerable uncertainty facing the world's economy and, in recent months, there
has been a significant increase in the number of aircraft available for lease or
sale. Overall, Airplanes Group generated $147 million in cash from operations in
the nine months to December 31, 1999 compared to $73 million in the same period
of the previous year. The increase in cash generated from operations in the nine
month period to December 31, 1999 is primarily attributable to a decrease in
cash paid in respect of interest and a cash receipt in relation to the
re-couponing and unwinding of 30 of Airplanes Group's Swaps. In addition, there
was a net inflow of maintenance reserves due to the timing of maintenance events
and a reduction in the level of technical costs . In the nine months to December
31, 1998, $7 million in maintenance reserves was repaid to a Latin American
lessee as a result of the restructuring of its leases. There was also a
reduction in the level of receivables in the nine months to December 31, 1999.
There was a net loss after taxation for the nine months to December 31, 1999 of
$177 million (Airplanes Limited: $160 million; Airplanes Trust: $17 million)
compared to a net loss after taxation for the nine months to December 31, 1998
of $130 million (Airplanes Limited: $123 million; Airplanes Trust: $7 million).

Leasing Revenues

Leasing revenues (which include maintenance reserve receipts which Airplanes
Group receives from certain of its lessees) for the nine months ended December
31, 1999 were $383 million (Airplanes Limited: $352 million; Airplanes Trust:
$31 million) compared with $399 million (Airplanes Limited: $367 million;
Airplanes Trust: $32 million) for the nine months ended December 31, 1998. The
decrease in 1999 was primarily attributable to the reduction in the number of
Aircraft on lease in the period to December 31, 1999, as a result of Aircraft
sales and a greater number of Aircraft off lease during the three months ended
December 31, 1999. At December 31, 1999, Airplanes Group had 195 of its 201
Aircraft on lease (Airplanes Limited: 177 Aircraft; Airplanes Trust: 18
Aircraft) compared to 202 of its 204 Aircraft on lease (Airplanes Limited: 184
Aircraft; Airplanes Trust: 18 Aircraft) at December 31, 1998. In addition, there
was a lower interest rate environment (which impacts the pricing of certain
lease rentals) in the nine month period to December 31, 1999 compared with the
nine month period to December 31, 1998.

Aircraft Sales

Sales revenues of $2 million (Airplanes Limited $2 million; Airplanes Trust:
Nil) in respect of the sale of one B737-200 Aircraft, and an engine from an A300
Aircraft, the airframe of which had previously been sold, were received in the
nine months ended December 31, 1999. The net book value of the Aircraft and
engine at the date of sale, net of maintenance reserves of $1 million, was $1
million (Airplanes Limited:$1 million; Airplanes Trust: Nil). In addition, $2
million was capitalised in relation to Aircraft expenditures giving a net cash
movement of $Nil.

                                       22

<PAGE>


Sales revenues of $122 million (Airplanes Limited: $28 million; Airplanes Trust:
$94 million) in respect of the sale of seventeen Aircraft (eight DC9's, six
DC8-71F's, one B737-300, one B737-200A and one A300-B4-100) were received in the
same period in 1998. The net book value of the seventeen Aircraft at the date of
sale, net of maintenance reserves, was $110 million (Airplanes Limited: $25
million; Airplanes Trust: $85 million).

Other Income

During the nine months ended December 31, 1999, Airplanes Group exercised an
option to purchase shares in an airline which had been granted to the lessor
under the terms of the lease of an Aircraft to a lessee. The shares were
subsequently sold, yielding a profit of $1 million.

Depreciation and Amortization

The charge for depreciation and amortization in the nine months ended December
31, 1999 amounted to $131 million (Airplanes Limited: $119 million; Airplanes
Trust: $12 million) compared with $132 million (Airplanes Limited: $120 million;
Airplanes Trust: $12 million) for the comparative period in 1998. The decrease
arose as a result of the reduction in the number of Aircraft owned by Airplanes
Group.

Net Interest Expense

Net interest expense was $345 million (Airplanes Limited: $313 million;
Airplanes Trust: $32 million) in the nine month period ended December 31, 1999
compared to $317 million (Airplanes Limited: $287 million; Airplanes Trust : $30
million) in the nine month period ended December 31, 1998. The increase in net
interest expense was primarily due to a combination of offsetting factors:
additional interest being charged on accrued but unpaid Class E Note interest of
$36 million and lower average debt and interest rates in the nine months to
December 31, 1999. In addition, the net interest expense for the nine month
period ended December 31, 1998 included a one-time gain of $4 million,
recognised on the value of Swaptions.

The weighted average interest rate on the Class A - D Notes during the nine
months to December 31, 1999 was 6.59% and the average debt in respect of the
Class A - D Notes outstanding during the period was $3,190 million. The Class E
Notes accrue interest at a rate of 20% per annum (as adjusted by reference to
the U.S. consumer price index, effective March 28, 1996). The weighted average
interest rate on the Class A - D Notes during the nine months to December 31,
1998 was 6.8% and the average debt in respect of the Class A - D Notes
outstanding during the period was $3,366 million.

The difference for the nine months ended December 31, 1999 in Airplanes Group's
net interest expense of $345 million (Airplanes Limited: $313 million; Airplanes
Trust: $32 million) and cash paid in respect of interest of $158 million
(Airplanes Limited: $143 million; Airplanes Trust: $15 million) is substantially
accounted for by the fact that interest on the Class E Notes is accrued but
unpaid in the nine months ended December 31, 1998.

Net interest expense is stated after deducting interest income earned during the
relevant period.

                                       23

<PAGE>


In the nine months ended December 31, 1999, Airplanes Group earned interest
income (including lessee default interest) of $10 million (Airplanes Limited:
$10 million; Airplanes Trust: Nil) compared with $11 million in the nine months
ended December 31, 1998 (Airplanes Limited: $11 million; Airplanes Trust: Nil
million). The decrease is primarily as a result of marginally lower lessee
default interest in addition to lower interest rates in the nine months to
December 31, 1999.

At December 31, 1999, Airplanes Group had Swaptions with a notional principal of
$289 million. The value of the Swaptions decreased by approximately $0.9 million
during the nine months ended December 31, 1999. As Swaptions do not qualify for
hedge accounting under US GAAP, the decrease in fair value of $0.9 million has
been included in interest expense in the statement of operations.

Bad Debt and Loss-Making Lease Provisions

See "Results of Operations - Three Months Ended December 31, 1999 Compared with
Three Months Ended December 31, 1998" for a discussion of Airplanes Group's
accounting practices in respect of delinquent receivables and provisions for
"loss making leases". A number of Airplanes Group's lessees failed to meet their
contractual obligations in the nine month period ended December 31, 1999,
resulting in the requirement for additional provisions in respect of bad and
doubtful debts in respect of these lessees, while the credit exposure with
regard to certain other carriers improved in the period. Overall, there was a
net credit of $1 million in respect of bad and doubtful debts (Airplanes
Limited: $Nil million; Airplanes Trust: a credit of $1 million) in the nine
months ended December 31, 1999, compared with the overall net provision required
of $4 million for the nine months ended December 31, 1998 (Airplanes Limited: $3
million; Airplanes Trust: $1 million). The credit in 1999 was primarily as a
result of provisions no longer required for various lessees including two
Brazilian lessees and one Colombian lessee, which were partially offset by
provisions required in respect of one Irish lessee and one US lessee.

In respect of `loss making' lease provisions, there was an overall net
utilisation of $6 million (Airplanes Limited: $5 million; Airplanes Trust: $1
million) in the nine months ended December 31, 1999. In the nine month period to
December 31, 1998, there was an overall net utilization of $9 million (Airplanes
Limited: $8 million; Airplanes Trust: $1 million). The only significant "loss
making" leases signed in the nine months to December 31, 1999 related to two
Fokker 100 Aircraft on lease to a Latin American lessee. In the nine months
ended December 31, 1998, the only significant provision required was in respect
of one B767 Aircraft on lease to one Latin American lessee.

Other Lease Costs

Other lease costs in the nine months ended December 31, 1999 amounted to $14
million (Airplanes Limited: $13 million; Airplanes Trust: $1 million) compared
to other lease costs of $19 million (Airplanes Limited: $18 million; Airplanes
Trust: $1 million) in the nine months to December 31, 1998. The reduction in the
charge in the nine months to December 31, 1999, was primarily due to the fact
that in the nine months to December 31, 1998, there was an increase in

                                       24

<PAGE>


technical expenses of $5 million which related primarily to four Fokker 100
Aircraft repossessed from Sempati.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine month period to
December 31, 1999 amounted to $27 million (Airplanes Limited: $25 million;
Airplanes Trust: $2 million). This is a comparable expense to that incurred in
the nine months to December 31, 1998 of $27 million (Airplanes Limited: $25
million; Airplanes Trust: $2 million).

The most significant element of selling, general and administrative expenses is
the Aircraft servicing fees paid to GECAS. 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 of $27 million in the nine months to December 31,
1999 include $17 million (Airplanes Limited: $16 million; Airplanes Trust: $1
million) relating to GECAS servicing fees as compared to the expense incurred in
respect of GECAS servicing fees in the comparative period to December 31, 1998
of $18 million (Airplanes Limited: $17 million; Airplanes Trust: $1 million).

A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the period to December 31, 1999 was $7
million (Airplanes Limited: $6 million; Airplanes Trust: $1 million) in respect
of administrative agency and cash management fees payable to AerFi, compared
with the charge of $7 million for the period to December 31, 1998 (Airplanes
Limited: $6 million; Airplanes Trust: $1 million).

Operating Loss

The operating loss for the nine months ended December 31, 1999 was $177 million
(Airplanes Limited: $160 million; Airplanes Trust: $17 million) compared with an
operating loss of $132 million for the nine months ended December 31, 1998
(Airplanes Limited: $125 million; Airplanes Trust: $7 million). Airplanes
Limited and Airplanes Trust are expected to continue to report substantial
losses in the future.

Taxes

There was no tax charge or benefit in the nine months to December 31, 1999
compared with an overall tax benefit of $2 million in the same period in 1998
(Airplanes Limited: $2 million; Airplanes Trust: Nil).

Net Loss

The net loss after taxation for the nine months ended December 31, 1999 was $177
million (Airplanes Limited: $160 million; Airplanes Trust: $17 million) compared
with a net loss after taxation for the nine months ended December 31, 1998 of
$130 million (Airplanes Limited: $123 million; Airplanes Trust: $7 million).

                                       25

<PAGE>


Financial Resources and Liquidity

There was a decrease in cash of $13 million for the nine months to December 31,
1999 compared to a net decrease of $8 million for the nine months to December
31, 1998.

Liquidity

The cash balances at December 31, 1999 amounted to $211 million (Airplanes
Limited: $205 million ; Airplanes Trust: $6 million) compared to cash balances
at December 31, 1998 of $224 million (Airplanes Limited: $218 million ;
Airplanes Trust: $6 million.)

Operating Activities

Net cash provided by operating activities in the nine months ended December 31,
1999 amounted to $147 million (Airplanes Limited: $132 million; Airplanes Trust:
$15 million) compared with $73 million in the nine months ended December 31,
1998 (Airplanes Limited: $55 million; Airplanes Trust: $18 million). This
includes cash paid in respect of interest of $158 million in the nine months to
December 31, 1999 (Airplanes Limited: $143 million; Airplanes Trust: $15
million) compared with $186 million in the nine months to December 31, 1998
(Airplanes Limited: $169 million; Airplanes Trust: $17 million). The increase in
cash from operations generated in the nine month period to December 31, 1999 is
primarily attributable to a decrease in cash paid in respect of interest, and a
cash receipt relating to the re-couponing and unwinding of 30 of Airplanes
Group's Swap's. There was a reduction in both maintenance claims and technical
costs for the nine months ended December 31, 1999 as compared to the nine months
ended December 31, 1998. In addition, in the nine months to December 31, 1998,
$7 million in maintenance reserves was returned to a Latin American lessee as a
result of the restructuring of its lessees. There has also been a reduction in
lessee receivables of $11 million in the period to December 31, 1999 compared to
a net negative movement of $21 million in the period to December 31, 1998.

Investing and Financing Activities

Cash flows from investing activities in the nine months to December 31, 1999
primarily reflects proceeds of $2 million from the sale of one B737-200 Aircraft
and one engine. This has been offset by $2 million (Airplanes Limited: $2
million; Airplanes Trust: Nil) of costs capitalised in relation to Aircraft
expenditures. The cash provided by capital and sale type leases was $6 million
(Airplanes Limited: $6 million; Airplanes Trust: Nil) as compared with $6
million in the comparative period to December 31, 1998 (Airplanes Limited: $6
million; Airplanes Trust: Nil).

Cash flows from financing activities in the nine months to December 31, 1999
primarily reflect the repayment of $166 million of principal on Subclass A-6,
Class B and Class C Notes by Airplanes Group (Airplanes Limited: $151 million;
Airplanes Trust: $15 million) compared to $208 million of principal on Subclass
A-5, Subclass A-6 and Class B Notes repaid by Airplanes Group (Airplanes
Limited: $190 million; Airplanes Trust: $18 million) in the nine months to
December 31, 1998. The higher amount of principal repayments in the nine months
ended

                                       26

<PAGE>


December 31, 1998 is due to a higher amount of cash provided by investing and
financing activities as discussed above.

                                       27

<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 of Notes, including the outstanding principal amount
and estimated fair value as of December 31, 1999, are as follows:

<TABLE>
                     Annual Interest                                                             Estimated
                          Rate          Principal Amount   Expected Final    Final              Fair Value at
Subclass of Notes   (Payable Monthly)    at quarter end    Payment Date      Maturity Date    December 31, 1999
-----------------   -----------------   ----------------   --------------    -------------    -----------------
                                          $ Millions                                              $ Millions

<S>                  <C>                <C>                <C>               <C>              <C>
Subclass A-4        (LIBOR+.62%)               200         March 15, 2003    March 15, 2019          199
Subclass A-6        (LIBOR+.34%)               594         January 15, 2004  March 15, 2019          590
Subclass A-7        (LIBOR+.26%)               550         March 15, 2001    March 15, 2019          548
Subclass A-8        (LIBOR+.375%)              700         March 15, 2003    March 15, 2019          693
Class B             (LIBOR+.75%)               300         March 15, 2009    March 15, 2019          290
Class C             (8.15%)                    356         March 15, 2011    March 15, 2019          318
Class D             (10.875%)                  400         March 15, 2012    March 15, 2019          360
                                             -----                                                 -----
                                             3,100                                                 2,998
                                             =====                                                 =====
</TABLE>


Interest Rate Management

The leasing revenues of Airplanes Group are generated primarily from lease
rental payments which are either fixed or floating. 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 approximately two thirds of the leases 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-D
Notes do not correlate to the mix of fixed and floating rental payments for
different rental periods. This interest rate exposure can be managed through the
use of interest rate swaps. The Class A and B Notes bear floating rates of
interest and the Class C and D Notes bear fixed rates of interest. The mix of
fixed and floating rental payments contains a higher percentage of fixed rate
payments than the percentage of fixed rate interest payments on the Notes. One
reason for this is the fact that the reset periods on floating rental payments
are generally longer than the monthly reset periods on the floating rate Notes.
In order to correlate the contracted fixed and floating rental payments to the
fixed and floating interest payments on the Notes, Airplanes Group enters into
interest rate swaps (the `Swaps'). Under the Swaps, Airplanes Group pays fixed
amounts and receives floating amounts on a monthly basis. The Swaps amortize
having regard to the expected paydown schedule of the Class A and 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 rates leases. At
least every three months, and in practice more frequently, AerFi Financial
Services (Ireland) Limited, a subsidiary of AerFi Group, as Airplanes Group's

                                       28

<PAGE>


administrative agent (the "Administrative Agent"), seeks to enter into
additional swaps or sell at market value or unwind part or all of the Swaps and
any future swaps in order to rebalance the fixed and floating mix of interest
obligations and the fixed and floating mix of rental payments. At December 31,
1999, Airplanes Group had unamortized Swaps with an aggregate notional principal
balance of $2,190 million. The aggregate notional principal of these Swaps will
be reduced to $1,755 million by the end of the fiscal year ended March 31, 2000.
These Swaps will be further reduced to an aggregate notional principal balance
of $1,000 million by the year ended March 31, 2001, to an aggregate notional
principal balance of $635 million by the year ended March 31, 2002 and to an
aggregate notional principal balance of $120 million by the year ended March 31,
2003. None of the Swaps have maturity dates extending beyond November 2003. The
aggregate fair value of the Swaps at December 31, 1999 was $10 million.

Airplanes Group Swap Book at December 31, 1999

<TABLE>
  Swap No.      Notional Amount (i)       Effective Date        Final        Fixed Rate      Estimated Fair Market
                    ($ Millions)                              Maturity      Payable (ii)   Value as at December 31,
                                                                 Date                                1999
<S>             <C>                       <C>               <C>             <C>            <C>
      1                 155                  07/30/99          01/15/00        5.8300%                    $92,331
      2                  10                  09/22/97          02/15/00        5.7450%                     $6,945
      3                 125                  09/15/99          03/15/00        6.0600%                    $19,180
      4                 160                  10/15/99          03/15/00        5.7750%                   $139,578
      6                  10                  12/15/97          04/15/00        6.3900%                  ($10,997)
      5                  25                  05/17/99          04/15/00        5.9800%                    $10,618
      8                  20                  06/24/97          06/15/00        5.9825%                     $8,589
      9                  15                  07/15/97          06/15/00        6.0600%                     $2,362
      7                  5                   02/17/98          06/15/00        5.9500%                     $4,030
      10                 95                  10/15/99          07/15/00        5.8650%                   $101,328
      11                 20                  12/15/97          10/15/00        5.8475%                    $23,837
      12                 15                  01/15/97          11/15/00        6.0550%                    $28,817
      13                 10                  08/15/97          12/15/00        5.9800%                    $24,458
      14                 75                  10/28/99          01/15/01        5.9250%                    $87,268
      15                 20                  12/23/97          03/15/01        5.8175%                   $149,917
      17                150                  03/28/96          04/15/01        6.0925%                   $311,638
      16                 70                  11/17/99          04/15/01        5.8550%                   $208,185
      18                 45                  10/28/97          06/15/01        5.9600%                   $194,432
      19                 30                  12/15/99          08/15/01        6.2000%                    $54,207
      20                 15                  05/27/98          04/15/02        6.2800%                   $155,911
      21                 45                  08/16/99          04/15/02        6.2250%                   $336,397
      22                105                  12/15/99          04/15/02        6.3100%                    $90,282
      23                 10                  10/27/98          05/15/02        6.2900%                    $80,270
      24                410                  11/15/99          06/15/02        6.1200%                 $2,447,717
      25                 10                  02/16/99          07/15/02        6.2700%                   $137,319
      26                 20                  09/15/98          08/15/02        6.1700%                   $129,286
      27                140                  07/15/98          12/15/02        6.2400%                 $1,365,753
      28                 20                  08/25/98          02/15/03        6.3900%                   $328,841
      29                 20                  10/15/98          02/15/03        6.3800%                   $213,483
      30                 10                  11/16/98          02/15/03        6.3900%                   $117,922
      31                 70                  12/15/98          02/15/03        6.2840%                   $578,204
      34                 45                  06/01/99          03/15/03        6.2200%                   $449,120

                                       29

<PAGE>


      35                 65                  12/21/99          03/15/03        6.5875%                    $41,413
      33                 0                   01/18/00          03/15/03        6.3850%                   $172,627
      32                 0                   02/15/00          03/15/03        6.3965%                   $180,711
      36                 20                  06/21/99          06/15/03        6.3100%                   $701,540
      37                110                  07/15/99          08/15/03        6.2900%                   $825,505
      38                 0                   01/18/00          10/15/03        6.4650%                   $126,314
      39                 20                  08/17/99          11/15/03        6.3300%                   $454,855

                                                                                                    --------------
                                                                                                      $10,390,193
                                                                                                    ==============
</TABLE>


(i)   While some of the above may have a fixed amount, many amortise over the
      period to the final maturity date.

(ii)  Each of the above Swaps is calculated on a monthly fixed actual/360
      adjusted basis, with the exception of Swap No. 17 which is calculated on a
      monthly fixed 30/360 unadjusted basis.

(iii) Under all Swaps, Airplanes Group receives floating at one month LIBOR,
      which resets monthly.

Pursuant to a decision of the Directors of Airplanes Limited and the Controlling
Trustees of Airplanes Trust on November 8, 1999, Airplanes Group either
re-couponed or unwound and replaced thirty of its portfolio of forty four Swaps.
Twenty of these Swaps were adjusted so that Airplanes Group's fixed payment rate
more closely reflected current market rates. Airplanes Group received a net cash
payment of US$9.33 million with respect to these twenty Swaps. In addition, ten
of the thirty Swaps were terminated, in return for a net payment to Airplanes
Group of US$1.92 million. In aggregate therefore, Airplanes Group received a net
cash inflow of US$11.25 million, but will now have higher ongoing swap costs as
a result of re-calibrating the Swaps to current market rates. Simultaneously
with these terminations, Airplanes Group put in place a replacement Swap to
maintain a fully hedged position. These adjustments and terminations released
the positive value in Airplanes Group's Swaps and allowed that value to be
available to be applied to additional payments of the Class A Principal
Adjustment Amount. These transactions were conducted in accordance with
Airplanes Group's interest rate risk management policies.

The realized gain on the termination of these Swaps has been deferred and is
being recognized over the life of the hedged transaction in accordance with the
guidance provided in ET Issue No. 84-7, "Termination of Interest Rate Swaps".

                                       30

<PAGE>


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 is managed
through the purchase of Swaptions. Airplanes Group purchases Swaptions which, if
exercised, will allow Airplanes Group to enter into interest rate swap
transactions under which it will pay floating amounts and received fixed
amounts. These Swaptions can be exercised in the event of defaults by lessees
owing fixed rate rental payments in circumstances where interest rates have
declined since the contract date of such leases. Because not all lessees making
fixed rate rental payments are expected to default and not all lessee defaults
are expected to occur following a decline in interest rates, Airplanes Group
purchases Swaptions in aggregate in a notional amount less than the full extent
of the exposure associated with the lessees making fixed rate rental payments.
This notional amount (the `Target Hedge') will be varied from time to time to
reflect, inter alia, changes in the mix of payment bases under future leases and
in the prevailing level of interest rates. From time to time the Administrative
Agent may also sell at market value or unwind part or all of the outstanding
Swaptions, for example, to reflect any decreases in the Target Hedge. In the
period from March 28, 1996 to December 31, 1999, Airplanes Group purchased
Swaptions for interest rate swaps with an aggregate notional principal balance
of $483 million and sold Swaptions with an aggregate notional principal balance
of $194 million. The net aggregate notional principal balance of Swaptions at
December 31, 1999 therefore amounted to $289 million. The fair values of the
Swaptions at December 31, 1999 was $0.2 million and because the Swaptions do not
qualify for hedge accounting under U.S. GAAP, the decrease in this amount since
March 31, 1999 of $0.9 million has been included in interest expense for the
nine months ended December 31, 1999.

Airplanes Group Swaption Book at December 31, 1999


<TABLE>
Swaption No.    Notional Amount (i)    Effective        Final         Fixed Rate       Estimated Fair Market
                    ($ Millions)          Date        Maturity     Receivable (ii)   Value as at December 31,
                                                        Date                                   1999
<S>             <C>                    <C>            <C>          <C>               <C>
      1                  14             5/15/98       10/15/00          5.000%                     100
      2                  25             9/15/98       11/15/00          5.200%                     716
      3                  7              2/17/98        1/15/01          5.000%                      83
      4                  24             1/15/98        5/15/01          5.000%                  16,047
      5                  50             9/15/98       12/15/01          5.300%                  11,298
      6                  30             1/15/98        4/15/02          5.000%                  57,612
      7                  34             2/17/98        9/15/02          5.100%                  12,931
      8                  15             3/16/98        3/15/03          5.100%                   9,707
      9                  50             7/15/98        3/15/03          5.100%                  30,787
     10                  20             4/15/98        6/15/03          5.100%                  15,424
     11                  10             9/15/98        9/15/03          5.300%                  10,807
     15                  10             2/16/99        2/15/04          5.400%                  17,854
                        ---                                                                    -------
                        289                                                                    183,364
                                                                                               =======
</TABLE>

(i)    Under each Swaption, if exercised, Airplanes Group would receive fixed
       amounts at the rate indicated above on a monthly fixed 30/360 unadjusted
       basis.

(ii)   Under each Swaption, if exercised, Airplanes Group would pay floating
       amounts at one month LIBOR, which resets monthly.

                                       31

<PAGE>


Through the use of the Swaps, Swaptions and other interest rate hedging
products, it is Airplanes Group's policy not to be adversely exposed to material
movements in interest rates. There can be no assurance, however, that Airplanes
Group's interest rate risk management strategies will be effective in this
regard.

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's
counterparties consist of the affiliates of major U.S. and European financial
institutions which have credit ratings, or which provide collateralisation
arrangements, consistent with maintaining the ratings of the Class A Notes.

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 additional notes or refinancing notes
with different interest rate provisions from the Notes. Please refer to "Risk
Factors" in the Airplanes Group Form 10K filed with the SEC on June 30,, 1999
for more information about risks, especially lessee credit risk, that could
intensify Airplanes Group's exposure to changes in interest rates.

                                       32

<PAGE>


Part II.      Other Information

Item 1. Legal Proceedings

VASP
On November 5, 1992, AerFi obtained a preliminary injunction for repossession
and export of thirteen aircraft and three spare engines (the "Repossessed
Assets") from VASP, a Brazilian airline, which had defaulted under its lease
agreements with AerFi. On May 10, 1993, at a full hearing, the Brazilian courts
gave a decision fully validating the repossession injunction. VASP appealed this
decision to the High Court of the State of Sao Paolo (the "High Court"). On
December 18, 1996, the High Court found in favor of VASP in its appeal against
the court order granting AerFi repossession and export of the Repossessed
Assets. AerFi was instructed to return the Repossessed Assets for lease by VASP
under the terms of the original lease agreements between AerFi and VASP, within
thirty days of notification by VASP that it requires return of the assets. The
decision of the High Court was stayed pending a number of clarificatory motions
by both sides before the same court. In responding to those motions, the High
Court granted VASP the right to seek damages against AerFi in lieu of the return
of the Repossessed Assets. AerFi is appealing the December 1996 decision and the
court's responses to the clarificatory motions. As part of its appeals, AerFi
filed a recission action with the High Court which seeks to overturn the
decisions of the High Court and which seeks a stay on the December 1996 decision
pending determination of its recission action.

Seven of the thirteen aircraft which were repossessed by AerFi from VASP
following the 1992 injunction and the 1993 decision are now owned by Airplanes
Group although none of them are habitually based in Brazil. However, a number of
these aircraft operate into Brazil from time to time. The judgment of the High
Court only applies to those assets which are the subject matter of the
proceedings. VASP sought to have AerFi return the Repossessed Assets, in
connection with which the High Court served notice on AerFi for return of the
Repossessed Assets for the account, and at the risk, of VASP. AerFi has
challenged a number of matters relating to the notice, including its validity.
In addition, VASP filed a petition for calculation of the amount which it
alleges should be paid by AerFi, based on the High Court decision, seeking
damages in respect of (i) AerFi's alleged failure to comply with the court order
requiring return of the Repossessed Assets and (ii) the period during which VASP
was prevented from using the Repossessed Assets. AerFi has challenged VASP's
petition on the basis that if VASP believes it has an action for alleged damages
against AerFi in respect of the period during which VASP was prevented from
using the Repossessed Assets, VASP must commence such an action in accordance
with normal Brazilian court procedures before a court of first instance. These
preliminary matters still await a decision by the lower court. Before the High
Court, AerFi successfully challenged VASP's petition for calculation of alleged
damages arising from AerFi's alleged failure to comply with the court order
requiring return of the Repossessed Assets. As a consequence, VASP, should it
seek to recover such alleged damages, will have to prove the existence and
extent of its alleged damages. The only immediate risk to the Repossessed Assets
would arise where they are located in Brazil and where VASP was successful in
enforcing its judgement having sought repossession rather than damages.

AerFi has informed Airplanes Group that it has been advised that the December
1996 decision

                                       33

<PAGE>


of the High Court in this matter is incorrect as a matter of Brazilian law.
AerFi has further informed Airplanes Group that it is actively pursuing all
courses of action that may be available to it, including appeals to superior
courts and intends to defend its position vigorously and to pursue each of its
claims and counter claims against VASP. AerFi has advised Airplanes Group that
it believes the outcome of these matters will not have a material adverse effect
on Airplanes Group's liquidity, results of operations or financial condition.

Other Matters
Prior to the transfer of the Class E Notes held by AerFi Group and its
subsidiary, AerFi Inc. to General Electric Capital Corporation, Aero USA, Inc.
and Aero USA 3, Inc., both Connecticut corporations, have filed United States
federal consolidated tax returns and certain state and local tax returns with
AerFi, Inc., and its subsidiaries. There are ongoing tax audits by certain state
and local tax authorities with respect to taxes previously reported by AerFi,
Inc. and its subsidiaries. AerFi believes that none of these audits will have a
material adverse impact upon the liquidity, results of operations, financial
condition or liquidity of AeroUSA, Inc or AeroUSA 3, Inc.

Item 6. Exhibits and Reports on Form 8-K

         (a)    Exhibits

                27.1   Financial Data Schedule of Airplanes Limited

                27.2   Financial Data Schedule of Airplanes U.S. Trust

         (b)    Reports on Form 8-K: Filed for event dates November 15, 1999;
                December 15, 1999; January 18, 2000 (relating to the monthly
                report to holders of the Certificates).

                                       34

<PAGE>


                                   SIGNATURES


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


Date: February 11, 2000                  AIRPLANES LIMITED


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



Date: February 11, 2000                  AIRPLANES U.S. TRUST


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

<PAGE>


                   AIRPLANES LIMITED AND AIRPLANES U.S. TRUST


                                INDEX TO EXHIBITS



EXHIBIT NUMBER

27.1       Financial Data Schedule of Airplanes Limited

27.2       Financial Data Schedule of Airplanes U.S. Trust