|  __X__ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2010 |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------|

|  _____ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____to _____ |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

|       | AIR T, INC. AND SUBSIDIARIES                                                          |   |   |   |
|------------|---------------------------------------------------------------------------------------|--------|--------|--------|
|       | QUARTERLY REPORT ON FORM 10-Q                                                         |   |   |   |
|       | TABLE OF CONTENTS                                                                     |   |   |   |
|       |                                                                                  |   |   |   |
|       |                                                                                  |   | Page   |   |
|       | PART I                                                                                |   |   |   |
|       |                                                                                  |   |   |   |
| Item 1.    | Financial statements                                                                  |   |   |   |
|       |                                                                                  |   |   |   |
|       | Condensed Consolidated Statements of Income                                           |   |   | 3      |   |
|       | Three Months Ended June 30, 2010 and 2009 (Unaudited)                                 |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Balance Sheets                                                 |   |   | 4      |   |
|       | June 30, 2010 (Unaudited) and March 31, 2010                                          |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Statements of Cash Flows                                       |   |   | 5      |   |
|       | Three Months Ended June 30, 2010 and 2009 (Unaudited)                                 |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Statements of Stockholders' Equity                             |   |   | 6      |   |
|       | Three Months Ended June 30, 2010 and 2009 (Unaudited)                                 |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Notes to Condensed Consolidated Financial Statements (Unaudited)                      |   |   | 7      |   |
|       |                                                                                  |   |   |   |   |
| Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of Operations |   |   | 10     |   |
|       |                                                                                  |   |   |   |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market risk                            |   |   | 14     |   |
|       |                                                                                  |   |   |   |   |
| Item 4(T). | Controls and Procedures                                                               |   |   | 14     |   |
|       |                                                                                  |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | PART II                                                                               |   |   |   |   |
|       |                                                                                  |   |   |   |   |
| Item 1.    | Legal proceedings                                                                     |   |   | 15     |   |
| Item 6.    | Exhibits                                                                              |   |   | 15     |   |
|       | Signatures                                                                            |   |   | 16     |   |
|       | Exhibit Index                                                                         |   |   | 17     |   |
|       | Certifications                                                                        |   |   | 18     |   |
|       |                                                                                  |   |   |   |   |

----

|                                                      |   | Three Months Ended June 30, |       |
|-----------------------------------------------------------|--------|-----------------------------|------------|
|                                                      |   | 2010                        |       |   | 2009 |   |
| Operating Revenues:                                       |   |                        |       |   |   |   |
| Overnight air cargo                                       |   | $                           | 8,920,174  |   |   | $ | 8,788,476 |   |
| Ground equipment sales                                    |   |                        | 3,925,740  |   |   |   | 8,102,819 |   |
| Ground support services                                   |   |                        | 2,177,361  |   |   |   | 2,057,012 |   |
|                                                      |   |                        | 15,023,275 |   |   |   | 18,948,307 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Operating Expenses:                                       |   |                        |       |   |   |   |   |   |
| Flight-air cargo                                          |   |                        | 3,969,345  |   |   |   | 3,835,469 |   |
| Maintenance-air cargo                                     |   |                        | 3,439,234  |   |   |   | 3,365,822 |   |
| Ground equipment sales                                    |   |                        | 3,198,787  |   |   |   | 5,751,726 |   |
| Ground support services                                   |   |                        | 1,505,906  |   |   |   | 1,505,736 |   |
| General and administrative                                |   |                        | 2,402,926  |   |   |   | 2,650,519 |   |
| Depreciation and amortization                             |   |                        | 96,715     |   |   |   | 103,898 |   |
|                                                      |   |                        | 14,612,913 |   |   |   | 17,213,170 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Operating Income                                          |   |                        | 410,362    |   |   |   | 1,735,137 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Non-operating Expense (Income):                           |   |                        |       |   |   |   |   |   |
| Gain on retirement plan settlement                        |   |                        | -          |   |   |   | (8,460 | ) |
| Interest expense                                          |   |                        | 288        |   |   |   | 13,679 |   |
| Investment income                                         |   |                        | (57,477    | ) |   |   | (27,049 | ) |
|                                                      |   |                        | (57,189    | ) |   |   | (21,830 | ) |
|                                                      |   |                        |       |   |   |   |   |   |
| Earnings Before Income Taxes                              |   |                        | 467,551    |   |   |   | 1,756,967 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Income Taxes                                              |   |                        | 169,000    |   |   |   | 639,000 |   |
|                                                      |   |                        |       |   |   |   |   |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Net Earnings                                              |   | $                           | 298,551    |   |   | $ | 1,117,967 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Earnings Per Share:                                       |   |                        |       |   |   |   |   |   |
| Basic                                                     |   | $                           | 0.12       |   |   | $ | 0.46 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Diluted                                                   |   | $                           | 0.12       |   |   | $ | 0.46 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Dividends Declared Per Share                              |   | $                           | 0.33       |   |   | $ | 0.33 |   |
|                                                      |   |                        |       |   |   |   |   |   |
| Weighted Average Shares Outstanding:                      |   |                        |       |   |   |   |   |   |
| Basic                                                     |   |                        | 2,431,326  |   |   |   | 2,424,486 |   |
| Diluted                                                   |   |                        | 2,495,546  |   |   |   | 2,424,486 |   |
|                                                      |   |                        |       |   |   |   |   |   |
|                                                      |   |                        |       |   |   |   |   |   |
|                                                      |   |                        |       |   |   |   |   |   |
|                                                      |   |                        |       |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |                        |       |   |   |   |   |   |

----

|                                                         |   | June 30, 2010 |       |   | March 31, 2010 |   |
|--------------------------------------------------------------|--------|---------------|------------|--------|----------------|--------|
| ASSETS                                                       |   | (Unaudited)   |       |   |           |   |
| Current Assets:                                              |   |          |       |   |           |   |
| Cash and cash equivalents                                    |   | $             | 7,924,849  |   |           | $      | 9,777,587 |   |
| Short-term investments                                       |   |          | 2,264,529  |   |           |   | 2,254,589 |   |
| Accounts receivable, less allowance for                      |   |          |       |   |           |   |   |   |
|   doubtful accounts of $61,000 and $89,000         |   |          | 5,514,616  |   |           |   | 5,601,064 |   |
| Notes and other non-trade receivables-current                |   |          | 520,328    |   |           |   | 570,931 |   |
| Income tax receivable                                        |   |          | 531,811    |   |           |   | 467,000 |   |
| Inventories                                                  |   |          | 9,012,179  |   |           |   | 6,843,347 |   |
| Deferred income taxes                                        |   |          | 496,000    |   |           |   | 404,000 |   |
| Prepaid expenses and other                                   |   |          | 120,170    |   |           |   | 360,635 |   |
|   Total Current Assets                             |   |          | 26,384,482 |   |           |   | 26,279,153 |   |
|                                                         |   |          |       |   |           |   |   |   |
| Property and Equipment, net                                  |   |          | 1,258,905  |   |           |   | 1,317,290 |   |
|                                                         |   |          |       |   |           |   |   |   |
| Deferred Income Taxes                                        |   |          | 443,000    |   |           |   | 372,000 |   |
| Cash Surrender Value of Life Insurance Policies              |   |          | 1,514,837  |   |           |   | 1,497,836 |   |
| Notes and Other Non-Trade Receivables-LongTerm               |   |          | -          |   |           |   | 50,000 |   |
| Other Assets                                                 |   |          | 87,968     |   |           |   | 87,968 |   |
|   Total Assets                                     |   | $             | 29,689,192 |   |           | $      | 29,604,247 |   |
|                                                         |   |          |       |   |           |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                         |   |          |       |   |           |   |   |   |
| Current Liabilities:                                         |   |          |       |   |           |   |   |   |
| Accounts payable                                             |   | $             | 3,606,123  |   |           | $      | 2,623,590 |   |
| Accrued expenses                                             |   |          | 1,668,595  |   |           |   | 2,059,373 |   |
| Current portion of long-term obligations                     |   |          | 13,573     |   |           |   | 13,573 |   |
|  Total Current Liabilities                              |   |          | 5,288,291  |   |           |   | 4,696,536 |   |
|                                                         |   |          |       |   |           |   |   |   |
| Long-term Obligations                                        |   |          | 4,047      |   |           |   | 7,071 |   |
|                                                         |   |          |       |   |           |   |   |   |
| Stockholders' Equity:                                        |   |          |       |   |           |   |   |   |
| Preferred stock, $1.00 par value, 50,000 shares authorized,  |   |          | -          |   |           |   | - |   |
| Common stock, $.25 par value; 4,000,000 shares authorized,   |   |          |       |   |           |
|   2,431,326 shares issued and outstanding          |   |          | 607,831    |   |           |   | 607,831 |   |
| Additional paid-in capital                                   |   |          | 6,234,079  |   |           |   | 6,234,079 |   |
| Retained earnings                                            |   |          | 17,554,944 |   |           |   | 18,058,730 |   |
|   Total Stockholders' Equity                       |   |          | 24,396,854 |   |           |   | 24,900,640 |   |
|   Total Liabilities and Stockholders’ Equity |   | $             | 29,689,192 |   |           | $      | 29,604,247 |   |
|                                                         |   |          |       |   |           |   |   |   |
|                                                         |   |          |       |   |           |   |   |   |
|                                                         |   |          |       |   |           |   |   |   |
|                                                         |   |          |       |   |           |   |   |   |
| See notes to condensed consolidated financial statements.    |   |          |       |   |           |

|                                                         |   | Three Months Ended June 30, |       |
|--------------------------------------------------------------|--------|-----------------------------|------------|
|                                                         |   | 2010                        |       |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                        |   |                        |       |   |   |   |
| Net earnings                                                 |   | $                           | 298,551    |   |   | $ | 1,117,967 |   |
| Adjustments to reconcile net earnings to net                 |   |                        |       |   |   |   |   |   |
|   cash used in operating activities:               |   |                        |       |   |   |   |   |   |
| Loss on sale of assets                                       |   |                        | -          |   |   |   | 2,563 |   |
| Change in accounts receivable and inventory reserves         |   |                        | 19,861     |   |   |   | 33,817 |   |
| Depreciation and amortization                                |   |                        | 96,715     |   |   |   | 103,898 |   |
| Change in cash surrender value of life insurance             |   |                        | (17,001    | ) |   |   | (17,001 | ) |
| Deferred income taxes                                        |   |                        | (163,000   | ) |   |   | (108,000 | ) |
| Gain on retirement plan settlement                           |   |                        | -          |   |   |   | (8,460 | ) |
| Warranty reserve                                             |   |                        | 5,000      |   |   |   | (40,733 | ) |
| Compensation expense related to stock options                |   |                        | -          |   |   |   | 84,830 |   |
| Change in operating assets and liabilities:                  |   |                        |       |   |   |   |   |   |
|   Accounts receivable                              |   |                        | 114,311    |   |   |   | (2,902,734 | ) |
|   Notes receivable and other non-trade receivables |   |                        | 100,603    |   |   |   | 38,928 |   |
|   Inventories                                      |   |                        | (2,216,556 | ) |   |   | (865,504 | ) |
|   Prepaid expenses and other                       |   |                        | 239,915    |   |   |   | 217,165 |   |
|   Accounts payable                                 |   |                        | 982,533    |   |   |   | 146,377 |   |
|   Accrued expenses                                 |   |                        | (395,778   | ) |   |   | (927,604 | ) |
|   Income taxes receivable                          |   |                        | (64,811    | ) |   |   | 133,000 |   |
| Total adjustments                                            |   |                        | (1,298,208 | ) |   |   | (4,109,458 | ) |
|  Net cash used in operating activities                  |   |                        | (999,657   | ) |   |   | (2,991,491 | ) |
|                                                         |   |                        |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                        |   |                        |       |   |   |   |   |   |
| Purchase of investments                                      |   |                        | (9,940     | ) |   |   | (6,204 | ) |
| Capital expenditures                                         |   |                        | (37,780    | ) |   |   | (74,977 | ) |
|  Net cash used in investing activities                  |   |                        | (47,720    | ) |   |   | (81,181 | ) |
|                                                         |   |                        |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                        |   |                        |       |   |   |   |   |   |
| Aircraft term loan payments                                  |   |                        | -          |   |   |   | (450,035 | ) |
| Payment of cash dividend                                     |   |                        | (802,337   | ) |   |   | (800,080 | ) |
| Payment on capital leases                                    |   |                        | (3,024     | ) |   |   | (4,154 | ) |
|  Net cash used in financing activities                  |   |                        | (805,361   | ) |   |   | (1,254,269 | ) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                    |   |                        | (1,852,738 | ) |   |   | (4,326,941 | ) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD             |   |                        | 9,777,587  |   |   |   | 6,852,713 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                   |   | $                           | 7,924,849  |   |   | $ | 2,525,772 |   |
|                                                         |   |                        |       |   |   |   |   |   |
|                                                         |   |                        |       |   |   |   |   |   |
|                                                         |   |                        |       |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:            |   |                        |       |   |   |
| Cash paid during the period for:                             |   |                        |       |   |   |   |   |   |
| Interest                                                     |   | $                           | 288        |   |   | $ | 18,864 |   |
| Income taxes                                                 |   |                        | 397,000    |   |   |   | 614,000 |   |
|                                                         |   |                        |       |   |   |   |   |   |
|                                                         |   |                        |       |   |   |   |   |   |
|                                                         |   |                        |       |   |   |   |   |   |
|                                                         |   |                        |       |   |   |   |   |   |
| See notes to condensed consolidated financial statements.    |   |                        |       |   |   |   |   |   |

|                                                      |   | Common Stock |      |   | Additional |   |    |    |   |    | Total     |   |
|-----------------------------------------------------------|--------|--------------|-----------|--------|------------|--------|---------|---------|--------|---------|-----------|--------|
|                                                      |   |         |      |   |       |   |    | Paid-In |   |    | Retained  |   |   | Stockholders' |   |
|                                                      |   | Shares       |      |   | Amount     |   |    | Capital |   |    | Earnings  |   |   | Equity |   |
| Balance, March 31, 2009                                   |   |         | 2,424,486 |   |       | $      | 606,121 |    |   | $       | 6,045,330 |   |   | $ | 15,101,787 |   |   | $ | 21,753,238 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Net earnings                                              |   |         |      |   |       |   |    |    |   |    |      |   |   |   | 1,117,967 |   |   |   | 1,117,967 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Cash dividend ($0.33 per share)                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   | (800,080 | ) |   |   | (800,080 | ) |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Compensation expense related to                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|     stock options                     |   |         |      |   |       |   |    |    |   |    | 84,830    |   |   |   |   |   |   |   | 84,830 |   |
| Balance, June 30, 2009                                    |   |         | 2,424,486 |   |       | $      | 606,121 |    |   | $       | 6,130,160 |   |   | $ | 15,419,674 |   |   | $ | 22,155,955 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   | Common Stock |      |   | Additional |   |    |    |   |    |      | Total  |   |
|                                                      |   |         |      |   |       |   |    |    |   | Paid-In |      |   | Retained |   |   | Stockholders' |   |
|                                                      |   | Shares       |      |   | Amount     |   |    | Capital |   |    | Earnings  |   |   | Equity |   |
| Balance, March 31, 2010                                   |   |         | 2,431,326 |   |       | $      | 607,831 |    |   | $       | 6,234,079 |   |   | $ | 18,058,730 |   |   | $ | 24,900,640 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Net earnings                                              |   |         |      |   |       |   |    |    |   |    |      |   |   |   | 298,551 |   |   |   | 298,551 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Cash dividend ($0.33 per share)                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   | (802,337 | ) |   |   | (802,337 | ) |
| Balance, June 30, 2010                                    |   |         | 2,431,326 |   |       | $      | 607,831 |    |   | $       | 6,234,079 |   |   | $ | 17,554,944 |   |   | $ | 24,396,854 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |         |      |   |       |   |    |    |   |

| 1.   | Financial Statement Presentation |
|----------------|----------------------------------|

| 2.   | Income Taxes |
|----------------|--------------|

| 3.   | Net Earnings Per Share |
|----------------|------------------------|

|                                 |   | Three Months Ended June 30, |      |
|--------------------------------------|--------|-----------------------------|-----------|
|                                 |   | 2010                        |      |   | 2009 |   |
|                                 |   |                        |      |   |   |   |
| Net earnings                         |   | $                           | 298,551   |   |   | $ | 1,117,967 |   |
|                                 |   |                        |      |   |   |   |   |   |
| Earnings Per Share:                  |   |                        |      |   |   |   |   |   |
| Basic                                |   | $                           | 0.12      |   |   | $ | 0.46 |   |
| Diluted                              |   | $                           | 0.12      |   |   | $ | 0.46 |   |
|                                 |   |                        |      |   |   |   |   |   |
| Weighted Average Shares Outstanding: |   |                        |      |   |   |   |   |   |
| Basic                                |   |                        | 2,431,326 |   |   |   | 2,424,486 |   |
| Diluted                              |   |                        | 2,495,546 |   |   |   | 2,424,486 |   |
|                                 |   |                        |      |   |   |   |   |   |

| 4.   | Inventories |
|----------------|-------------|

|                                  |   | June 30, |      |   | March 31, |   |
|---------------------------------------|--------|----------|-----------|--------|-----------|--------|
|                                  |   | 2010     |      |   | 2010      |   |
|  Aircraft parts and supplies     |   | $        | 136,480   |   |      | $      | 124,777 |   |
|  Ground equipment manufacturing: |   |     |      |   |      |   |   |   |
| Raw materials                         |   |     | 6,510,392 |   |      |   | 5,029,982 |   |
| Work in process                       |   |     | 1,585,191 |   |      |   | 415,920 |   |
| Finished goods                        |   |     | 1,429,029 |   |      |   | 1,873,857 |   |
|  Total inventories               |   |     | 9,661,092 |   |      |   | 7,444,536 |   |
|  Reserves                        |   |     | (648,913  | )      |      |   | (601,189 | ) |
|                                  |   |     |      |   |      |   |   |   |
| Total, net of reserves                |   | $        | 9,012,179 |   |      | $      | 6,843,347 |   |

| 5.   | Stock Based Compensation |
|----------------|--------------------------|

| 6.   | Fair Value of Financial Instruments |
|----------------|-------------------------------------|

|                   |   | Fair Value Measurements at |      |
|------------------------|--------|----------------------------|-----------|
|                   |   | June 30, 2010              |      |   | March 31, 2010 |   |
|                   |   |                       |      |   |   |   |
| Short-term investments |   | $                          | 2,264,529 |   |   | $ | 2,254,589 |   |
|                   |   |                       |      |   |   |   |   |   |

| 7.   | Financing Arrangements |
|----------------|------------------------|

|   |    |
|--------|--------------|

| 8.   | Segment Information  |
|----------------|---------------------------|

|                            |   | Three Months Ended June 30, |       |
|---------------------------------|--------|-----------------------------|------------|
|                            |   | 2010                        |       |   | 2009 |   |
| Operating Revenues:             |   |                        |       |   |   |   |
| Overnight Air Cargo             |   | $                           | 8,920,174  |   |   | $ | 8,788,476 |   |
| Ground Equipment Sales:         |   |                        |       |   |   |   |   |   |
|    Domestic      |   |                        | 1,309,348  |   |   |   | 6,984,825 |   |
|    International |   |                        | 2,616,392  |   |   |   | 1,117,994 |   |
| Total Ground Equipment Sales    |   |                        | 3,925,740  |   |   |   | 8,102,819 |   |
| Ground Support Services         |   |                        | 2,177,361  |   |   |   | 2,057,012 |   |
| Total                           |   | $                           | 15,023,275 |   |   | $ | 18,948,307 |   |
|                            |   |                        |       |   |   |   |   |   |
| Operating Income (Loss):        |   |                        |       |   |   |   |   |   |
| Overnight Air Cargo             |   | $                           | 727,983    |   |   | $ | 794,811 |   |
| Ground Equipment Sales          |   |                        | (162,937   | ) |   |   | 1,356,532 |   |
| Ground Support Services         |   |                        | 299,299    |   |   |   | 255,342 |   |
| Corporate                       |   |                        | (453,983   | ) |   |   | (671,548 | ) |
| Total                           |   | $                           | 410,362    |   |   | $ | 1,735,137 |   |
|                            |   |                        |       |   |   |   |   |   |
| Capital Expenditures:           |   |                        |       |   |   |   |   |   |
| Overnight Air Cargo             |   | $                           | -          |   |   | $ | 12,500 |   |
| Ground Equipment Sales          |   |                        | -          |   |   |   | 20,436 |   |
| Ground Support Services         |   |                        | 32,640     |   |   |   | 13,555 |   |
| Corporate                       |   |                        | 5,140      |   |   |   | 28,486 |   |
| Total                           |   | $                           | 37,780     |   |   | $ | 74,977 |   |
|                            |   |                        |       |   |   |   |   |   |
| Depreciation and Amortization:  |   |                        |       |   |   |   |   |   |
| Overnight Air Cargo             |   | $                           | 50,073     |   |   | $ | 53,175 |   |
| Ground Equipment Sales          |   |                        | 7,023      |   |   |   | 11,868 |   |
| Ground Support Services         |   |                        | 27,478     |   |   |   | 26,744 |   |
| Corporate                       |   |                        | 12,141     |   |   |   | 12,111 |   |
| Total                           |   | $                           | 96,715     |   |   | $ | 103,898 |   |
|                            |   |                        |       |   |   |   |   |   |
|                            |   | As of                       |       |   |   |   |   |
|                            |   | June 30, 2010               |       |   | March 31, 2010 |   |
| Identifiable Assets:            |   |                        |       |   |   |   |   |   |
| Overnight Air Cargo             |   | $                           | 5,749,335  |   |   | $ | 6,626,250 |   |
| Ground Equipment Sales          |   |                        | 13,599,545 |   |   |   | 10,143,010 |   |
| Ground Support Services         |   |                        | 2,859,358  |   |   |   | 3,712,960 |   |
| Corporate                       |   |                        | 7,480,954  |   |   |   | 9,122,027 |   |
| Total                           |   | $                           | 29,689,192 |   |   | $ | 29,604,247 |   |
|                            |   |                        |       |   |   |   |   |   |

| 9.   | Commitments and Contingencies |
|----------------|-------------------------------|

| 10.   | Subsequent Events |
|-----------------|-------------------|

| (In thousands)                                     |   |                        |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------|--------|-----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                               |   | Three Months Ended June 30, |   |
|                                               |   | 2010                        |   |   | 2009   |   |
|                                               |   |                        |   |   |   |   |   |   |   |   |   |   |
| Overnight Air Cargo Segment:                       |   |                        |   |   |   |   |   |   |   |   |   |   |
|     FedEx                      |   | $                           | 8,920  |   |   |   | 59     | %      |   | $      | 8,788  |   |   |   | 46 | % |
| Ground Equipment Sales Segment:                    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Military                   |   |                        | 497    |   |   |   | 3      | %      |   |   | 5,873  |   |   |   | 31 | % |
|     Commercial - Domestic      |   |                        | 813    |   |   |   | 6      | %      |   |   | 1,112  |   |   |   | 6 | % |
|     Commercial - International |   |                        | 2,616  |   |   |   | 17     | %      |   |   | 1,118  |   |   |   | 6 | % |
|                                               |   |                        | 3,926  |   |   |   | 26     | %      |   |   | 8,103  |   |   |   | 43 | % |
|                                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ground Support Services Segment                    |   |                        | 2,177  |   |   |   | 15     | %      |   |   | 2,057  |   |   |   | 11 | % |
|                                               |   | $                           | 15,023 |   |   |   | 100    | %      |   | $      | 18,948 |   |   |   | 100 | % |

|                                      |   | Three Months Ended June 30,                                                            |
|-------------------------------------------|--------|----------------------------------------------------------------------------------------|
|                                      |   | 2010                                                                                   |   | 2009 |
|                                      |   |                                                                                   |   |   |
| Net Cash Used in Operating Activities     |   |  $     (1,000,000)                                       |   |  $     (2,992,000) |
| Net Cash Used in Investing Activities     |   |              (48,000) |   |              (81,000) |
| Net Cash Used in Financing Activities     |   |            (805,000)            |   |         (1,254,000) |
|                                      |   |                                                                                   |   |   |
| Net Decrease in Cash and Cash Equivalents |   |  $     (1,853,000)                                       |   |  $     (4,327,000) |
|                                      |   |                                                                                   |   |   |

| Exhibits |   |        |
|----------|--------|-------------|
| No.      |   | Description |
|     |   |        |
|     | 3.1    |        | Restated Certificate of Incorporation and Certificate of Amendment to Certificate of Incorporation dated September 25, 2008, incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2008 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 3.2    |        | Amended and Restated Bylaws of Air T, Inc., incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 9, 2008 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 4.1    |        | Specimen Common Stock Certificate, incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10‑K for the fiscal year ended March 31, 1994 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 31.1   |        | Section 302 Certification of Chief Executive Officer |
|     |   |        |   |
|     | 31.2   |        | Section 302 Certification of Chief Financial Officer |
|     |   |        |   |
|     | 32.1   |        | Section 1350 Certifications |

| Exhibits |   |        |
|----------|--------|-------------|
| No.      |   | Description |
|     |   |        |
|     | 3.1    |        | Restated Certificate of Incorporation and Certificate of Amendment to Certificate of Incorporation dated September 25, 2008, incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2008 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 3.2    |        | Amended and Restated Bylaws of Air T, Inc., incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 9, 2008 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 4.1    |        | Specimen Common Stock Certificate, incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10‑K for the fiscal year ended March 31, 1994 (Commission file No. 0-11720) |
|     |   |        |   |
|     | 31.1   |        | Section 302 Certification of Chief Executive Officer |
|     |   |        |   |
|     | 31.2   |        | Section 302 Certification of Chief Financial Officer |
|     |   |        |   |
|     | 32.1   |        | Section 1350 Certifications |