|     X | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended December 31, 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 and Nine Months Ended December 31, 2010 and 2009 (Unaudited)             |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Balance Sheets                                                 |   |   | 4      |   |
|       | December 31, 2010 (Unaudited) and March 31, 2010                                      |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Statements of Cash Flows                                       |   |   | 5      |   |
|       | Nine Months Ended December 31, 2010 and 2009 (Unaudited)                              |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | Condensed Consolidated Statements of Stockholders' Equity                             |   |   | 6      |   |
|       | Nine Months Ended December 31, 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                            |   |   | 16     |   |
|       |                                                                                  |   |   |   |   |
| Item 4(T). | Controls and Procedures                                                               |   |   | 16     |   |
|       |                                                                                  |   |   |   |   |
|       |                                                                                  |   |   |   |   |
|       | PART II                                                                               |   |   |   |   |
|       |                                                                                  |   |   |   |   |
| Item 1.    | Legal Proceedings                                                                     |   |   | 16     |   |
| Item 6.    | Exhibits                                                                              |   |   | 16     |   |
|       | Signatures                                                                            |   |   | 17     |   |
|       | Exhibit Index                                                                         |   |   | 18     |   |
|       | Certifications                                                                        |   |   | 19     |   |
|       |                                                                                  |   |   |   |   |

----

|                                                      |   | Three Months Ended December 31, |       |   | Nine Months Ended December 31, |   |
|-----------------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|
|                                                      |   | 2010                            |       |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Operating Revenues:                                       |   |                            |       |   |                           |   |   |   |   |   |   |   |
| Overnight air cargo                                       |   | $                               | 10,718,997 |   |                           | $      | 9,991,420 |   |   | $ | 29,963,524 |   |   | $ | 28,594,095 |   |
| Ground equipment sales                                    |   |                            | 10,036,373 |   |                           |   | 9,769,016 |   |   |   | 20,980,186 |   |   |   | 25,964,537 |   |
| Ground support services                                   |   |                            | 1,558,320  |   |                           |   | 2,560,691 |   |   |   | 6,564,539 |   |   |   | 6,852,590 |   |
|                                                      |   |                            | 22,313,690 |   |                           |   | 22,321,127 |   |   |   | 57,508,249 |   |   |   | 61,411,222 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                                       |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Flight-air cargo                                          |   |                            | 4,522,341  |   |                           |   | 4,516,982 |   |   |   | 13,139,044 |   |   |   | 12,797,373 |   |
| Maintenance-air cargo                                     |   |                            | 4,632,982  |   |                           |   | 4,038,547 |   |   |   | 12,244,359 |   |   |   | 11,312,464 |   |
| Ground equipment sales                                    |   |                            | 8,375,763  |   |                           |   | 7,477,230 |   |   |   | 17,338,331 |   |   |   | 19,438,142 |   |
| Ground support services                                   |   |                            | 1,150,276  |   |                           |   | 1,801,877 |   |   |   | 4,851,226 |   |   |   | 4,887,652 |   |
| General and administrative                                |   |                            | 2,631,419  |   |                           |   | 2,612,140 |   |   |   | 7,520,060 |   |   |   | 7,824,147 |   |
| Depreciation and amortization                             |   |                            | 86,329     |   |                           |   | 105,706 |   |   |   | 273,912 |   |   |   | 317,070 |   |
|                                                      |   |                            | 21,399,110 |   |                           |   | 20,552,482 |   |   |   | 55,366,932 |   |   |   | 56,576,848 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income                                          |   |                            | 914,580    |   |                           |   | 1,768,645 |   |   |   | 2,141,317 |   |   |   | 4,834,374 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating Income (Expense):                           |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Gain on retirement plan settlement                        |   |                            | -          |   |                           |   | - |   |   |   | - |   |   |   | 8,460 |   |
| Interest expense                                          |   |                            | (208       | )      |                           |   | (262 | ) |   |   | (1,563 | ) |   |   | (17,182 | ) |
| Investment income                                         |   |                            | 19,447     |   |                           |   | 20,875 |   |   |   | 115,795 |   |   |   | 75,454 |   |
| Other                                                     |   |                            | 3,700      |   |                           |   | - |   |   |   | 3,700 |   |   |   | (2,826 | ) |
|                                                      |   |                            | 22,939     |   |                           |   | 20,613 |   |   |   | 117,932 |   |   |   | 63,906 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Before Income Taxes                              |   |                            | 937,519    |   |                           |   | 1,789,258 |   |   |   | 2,259,249 |   |   |   | 4,898,280 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes                                              |   |                            | 339,000    |   |                           |   | 542,000 |   |   |   | 816,000 |   |   |   | 1,686,000 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net Earnings                                              |   | $                               | 598,519    |   |                           | $      | 1,247,258 |   |   | $ | 1,443,249 |   |   | $ | 3,212,280 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Per Share:                                       |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   | $                               | 0.25       |   |                           | $      | 0.51 |   |   | $ | 0.59 |   |   | $ | 1.32 |   |
|                                                      |   |                            |       |   |                           | $      | 0.51 |   |   |   |   |   |   |   |   |   |
| Diluted                                                   |   | $                               | 0.24       |   |                           | $      | 0.51 |   |   | $ | 0.58 |   |   | $ | 1.32 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Dividends Declared Per Share                              |   | $                               | -          |   |                           | $      | - |   |   | $ | 0.33 |   |   | $ | 0.33 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Shares Outstanding:                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |
| Basic                                                     |   |                            | 2,431,286  |   |                           |   | 2,424,486 |   |   |   | 2,431,301 |   |   |   | 2,424,486 |   |
| Diluted                                                   |   |                            | 2,452,589  |   |                           |   | 2,459,754 |   |   |   | 2,468,496 |   |   |   | 2,434,751 |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |                            |       |   |                           |   |   |   |   |   |   |   |   |

----

|                                                              |   | December 31, 2010 |       |   | March 31, 2010 |   |
|-------------------------------------------------------------------|--------|-------------------|------------|--------|----------------|--------|
| ASSETS                                                            |   | (Unaudited)       |       |   |           |   |
| Current Assets:                                                   |   |              |       |   |           |   |
| Cash and cash equivalents                                         |   | $                 | 6,136,011  |   |           | $      | 9,777,587 |   |
| Short-term investments                                            |   |              | 50,000     |   |           |   | 2,254,589 |   |
| Accounts receivable, less allowance for                           |   |              |       |   |           |   |   |   |
|   doubtful accounts of $74,000 and $89,000              |   |              | 10,890,138 |   |           |   | 5,601,064 |   |
| Notes and other non-trade receivables-current                     |   |              | 228,595    |   |           |   | 570,931 |   |
| Income tax receivable                                             |   |              | 373,654    |   |           |   | 467,000 |   |
| Inventories                                                       |   |              | 12,628,592 |   |           |   | 6,843,347 |   |
| Deferred income taxes                                             |   |              | 496,000    |   |           |   | 404,000 |   |
| Prepaid expenses and other                                        |   |              | 524,250    |   |           |   | 360,635 |   |
|   Total Current Assets                                  |   |              | 31,327,240 |   |           |   | 26,279,153 |   |
|                                                              |   |              |       |   |           |   |   |   |
| Property and Equipment, net                                       |   |              | 1,216,713  |   |           |   | 1,317,290 |   |
|                                                              |   |              |       |   |           |   |   |   |
| Deferred Income Taxes                                             |   |              | 443,000    |   |           |   | 372,000 |   |
| Cash Surrender Value of Life Insurance Policies                   |   |              | 1,548,839  |   |           |   | 1,497,836 |   |
| Notes and Other Non-Trade Receivables-LongTerm                    |   |              | 152,855    |   |           |   | 50,000 |   |
| Other Assets                                                      |   |              | 81,007     |   |           |   | 87,968 |   |
|   Total Assets                                          |   | $                 | 34,769,654 |   |           | $      | 29,604,247 |   |
|                                                              |   |              |       |   |           |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                              |   |              |       |   |           |   |   |   |
| Current Liabilities:                                              |   |              |       |   |           |   |   |   |
| Accounts payable                                                  |   | $                 | 7,127,626  |   |           | $      | 2,623,590 |   |
| Accrued expenses                                                  |   |              | 2,086,233  |   |           |   | 2,059,373 |   |
| Current portion of long-term obligations                          |   |              | 11,434     |   |           |   | 13,573 |   |
|  Total Current Liabilities                                   |   |              | 9,225,293  |   |           |   | 4,696,536 |   |
|                                                              |   |              |       |   |           |   |   |   |
| Long-term Obligations                                             |   |              | -          |   |           |   | 7,071 |   |
|                                                              |   |              |       |   |           |   |   |   |
| Stockholders' Equity:                                             |   |              |       |   |           |   |   |   |
| Preferred stock, $1.00 par value, 50,000 shares authorized        |   |              | -          |   |           |   | - |   |
| Common stock, $.25 par value; 4,000,000 shares authorized,        |   |              |       |   |           |
|   2,431,286 and 2,431,326 shares issued and outstanding |   |              | 607,821    |   |           |   | 607,831 |   |
| Additional paid-in capital                                        |   |              | 6,236,898  |   |           |   | 6,234,079 |   |
| Retained earnings                                                 |   |              | 18,699,642 |   |           |   | 18,058,730 |   |
|   Total Stockholders' Equity                            |   |              | 25,544,361 |   |           |   | 24,900,640 |   |
|   Total Liabilities and Stockholders’ Equity      |   | $                 | 34,769,654 |   |           | $      | 29,604,247 |   |
|                                                              |   |              |       |   |           |   |   |   |
|                                                              |   |              |       |   |           |   |   |   |
|                                                              |   |              |       |   |           |   |   |   |
|                                                              |   |              |       |   |           |   |   |   |
| See notes to condensed consolidated financial statements.         |   |              |       |   |           |

----

|                                                         |   | Nine Months Ended December 31, |       |
|--------------------------------------------------------------|--------|--------------------------------|------------|
|                                                         |   | 2010                           |       |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                        |   |                           |       |   |   |   |
| Net earnings                                                 |   | $                              | 1,443,249  |   |   | $ | 3,212,280 |   |
| Adjustments to reconcile net earnings to net                 |   |                           |       |   |   |   |   |   |
|   cash used in operating activities:               |   |                           |       |   |   |   |   |   |
| Loss on sale of assets                                       |   |                           | 3,700      |   |   |   | 2,839 |   |
| Change in accounts receivable and inventory reserves         |   |                           | 80,523     |   |   |   | 27,657 |   |
| Depreciation and amortization                                |   |                           | 273,912    |   |   |   | 317,070 |   |
| Change in cash surrender value of life insurance             |   |                           | (51,003    | ) |   |   | (51,003 | ) |
| Deferred income taxes                                        |   |                           | (163,000   | ) |   |   | 288,000 |   |
| Gain on retirement plan settlement                           |   |                           | -          |   |   |   | (8,460 | ) |
| Warranty reserve                                             |   |                           | 93,308     |   |   |   | 100,002 |   |
| Compensation expense related to stock options                |   |                           | 3,200      |   |   |   | 134,125 |   |
| Change in operating assets and liabilities:                  |   |                           |       |   |   |   |   |   |
|   Accounts receivable                              |   |                           | (5,274,742 | ) |   |   | (5,373,054 | ) |
|   Notes receivable and other non-trade receivables |   |                           | 239,481    |   |   |   | 233,963 |   |
|   Inventories                                      |   |                           | (5,879,551 | ) |   |   | 905,467 |   |
|   Prepaid expenses and other                       |   |                           | (160,901   | ) |   |   | (86,319 | ) |
|   Accounts payable                                 |   |                           | 4,504,036  |   |   |   | 494,622 |   |
|   Accrued expenses                                 |   |                           | (66,448    | ) |   |   | (664,268 | ) |
|   Accrued  compensation to executive     |   |                           | -          |   |   |   | (941,540 | ) |
|   Income taxes receivable                          |   |                           | 93,346     |   |   |   | 81,000 |   |
| Total adjustments                                            |   |                           | (6,304,139 | ) |   |   | (4,539,899 | ) |
|  Net cash used in operating activities                  |   |                           | (4,860,890 | ) |   |   | (1,327,619 | ) |
|                                                         |   |                           |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                        |   |                           |       |   |   |   |   |   |
| Proceeds from sale of investments, net                       |   |                           | 2,204,589  |   |   |   | 900 |   |
| Capital expenditures                                         |   |                           | (173,337   | ) |   |   | (103,428 | ) |
| Stock repurchase                                             |   |                           | (391       | ) |   |   | - |   |
|  Net cash provided by (used in) investing activities    |   |                           | 2,030,861  |   |   |   | (102,528 | ) |
|                                                         |   |                           |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                        |   |                           |       |   |   |   |   |   |
| Aircraft term loan payments                                  |   |                           | -          |   |   |   | (450,035 | ) |
| Payment of cash dividend                                     |   |                           | (802,337   | ) |   |   | (800,080 | ) |
| Payment on capital leases                                    |   |                           | (9,210     | ) |   |   | (19,585 | ) |
|  Net cash used in financing activities                  |   |                           | (811,547   | ) |   |   | (1,269,700 | ) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                    |   |                           | (3,641,576 | ) |   |   | (2,699,847 | ) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD             |   |                           | 9,777,587  |   |   |   | 6,852,713 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                   |   | $                              | 6,136,011  |   |   | $ | 4,152,866 |   |
|                                                         |   |                           |       |   |   |   |   |   |
|                                                         |   |                           |       |   |   |   |   |   |
|                                                         |   |                           |       |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:            |   |                           |       |   |   |
| Cash paid during the period for:                             |   |                           |       |   |   |   |   |   |
| Interest                                                     |   | $                              | 2,083      |   |   | $ | 21,924 |   |
| Income taxes                                                 |   |                           | 886,000    |   |   |   | 1,318,000 |   |
|                                                         |   |                           |       |   |   |   |   |   |
|                                                         |   |                           |       |   |   |   |   |   |
|                                                         |   |                           |       |   |   |   |   |   |
| 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                                              |   |         |      |   |       |   |    |    |   |    |      |   |   |   | 3,212,280 |   |   |   | 3,212,280 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Cash dividend ($0.33 per share)                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   | (800,080 | ) |   |   | (800,080 | ) |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Compensation expense related to                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|     stock options                     |   |         |      |   |       |   |    |    |   |    | 134,125   |   |   |   |   |   |   |   | 134,125 |   |
| Balance, December 31, 2009                                |   |         | 2,424,486 |   |       | $      | 606,121 |    |   | $       | 6,179,455 |   |   | $ | 17,513,987 |   |   | $ | 24,299,563 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   | 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                                              |   |         |      |   |       |   |    |    |   |    |      |   |   |   | 1,443,249 |   |   |   | 1,443,249 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Cash dividend ($0.33 per share)                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   | (802,337 | ) |   |   | (802,337 | ) |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Compensation expense related to                           |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|     stock options                     |   |         |      |   |       |   |    |    |   |    | 3,200     |   |   |   |   |   |   |   | 3,200 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| Stock repurchase                                          |   |         | (40       | )      |       |   | (10     | )       |   |    | (381      | )      |   |   |   |   |   |   | (391 | ) |
| Balance, December 31, 2010                                |   |         | 2,431,286 |   |       | $      | 607,821 |    |   | $       | 6,236,898 |   |   | $ | 18,699,642 |   |   | $ | 25,544,361 |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
|                                                      |   |         |      |   |       |   |    |    |   |    |      |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |         |      |   |       |   |    |    |   |

----

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

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

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

|                                 |   | Three Months Ended December 31, |      |   | Nine Months Ended December 31, |   |
|--------------------------------------|--------|---------------------------------|-----------|--------|--------------------------------|--------|
|                                 |   | 2010                            |      |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                 |   |                            |      |   |                           |   |   |   |   |   |   |   |
| Net earnings                         |   | $                               | 598,519   |   |                           | $      | 1,247,258 |   |   | $ | 1,443,249 |   |   | $ | 3,212,280 |   |
|                                 |   |                            |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Per Share:                  |   |                            |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                |   | $                               | 0.25      |   |                           | $      | 0.51 |   |   | $ | 0.59 |   |   | $ | 1.32 |   |
| Diluted                              |   | $                               | 0.24      |   |                           | $      | 0.51 |   |   | $ | 0.58 |   |   | $ | 1.32 |   |
|                                 |   |                            |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Shares Outstanding: |   |                            |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                |   |                            | 2,431,286 |   |                           |   | 2,424,486 |   |   |   | 2,431,301 |   |   |   | 2,424,486 |   |
| Diluted                              |   |                            | 2,452,589 |   |                           |   | 2,459,754 |   |   |   | 2,468,496 |   |   |   | 2,434,751 |   |
|                                 |   |                            |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |

----

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

|                                  |   | December 31, |       |   | March 31, |   |
|---------------------------------------|--------|--------------|------------|--------|-----------|--------|
|                                  |   | 2010         |       |   | 2010      |   |
|  Aircraft parts and supplies     |   | $            | 128,261    |   |      | $      | 124,777 |   |
|  Ground equipment manufacturing: |   |         |       |   |      |   |   |   |
| Raw materials                         |   |         | 9,483,045  |   |      |   | 5,029,982 |   |
| Work in process                       |   |         | 2,052,021  |   |      |   | 415,920 |   |
| Finished goods                        |   |         | 1,661,309  |   |      |   | 1,873,857 |   |
|  Total inventories               |   |         | 13,324,636 |   |      |   | 7,444,536 |   |
|  Reserves                        |   |         | (696,044   | )      |      |   | (601,189 | ) |
|                                  |   |         |       |   |      |   |   |   |
| Total, net of reserves                |   | $            | 12,628,592 |   |      | $      | 6,843,347 |   |
|                                  |   |         |       |   |      |   |   |   |

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

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

|                   |   | Fair Value Measurements at |   |
|------------------------|--------|----------------------------|--------|
|                   |   | December 31, 2010          |   |   | March 31, 2010 |   |
|                   |   |                       |   |   |   |   |
| Short-term investments |   | $                          | 50,000 |   |   | $ | 2,254,589 |   |
|                   |   |                       |   |   |   |   |   |   |

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

----

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

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

|                            |   | Three Months Ended December 31, |       |   | Nine Months Ended December 31, |   |
|---------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|
|                            |   | 2010                            |       |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Operating Revenues:             |   |                            |       |   |                           |   |   |   |   |   |   |   |
| Overnight Air Cargo             |   | $                               | 10,718,997 |   |                           | $      | 9,991,420 |   |   | $ | 29,963,524 |   |   | $ | 28,594,095 |   |
| Ground Equipment Sales:         |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|    Domestic      |   |                            | 6,291,824  |   |                           |   | 8,109,459 |   |   |   | 11,796,050 |   |   |   | 20,139,466 |   |
|    International |   |                            | 3,744,549  |   |                           |   | 1,659,557 |   |   |   | 9,184,136 |   |   |   | 5,825,071 |   |
| Total Ground Equipment Sales    |   |                            | 10,036,373 |   |                           |   | 9,769,016 |   |   |   | 20,980,186 |   |   |   | 25,964,537 |   |
| Ground Support Services         |   |                            | 1,558,320  |   |                           |   | 2,560,691 |   |   |   | 6,564,539 |   |   |   | 6,852,590 |   |
| Total                           |   | $                               | 22,313,690 |   |                           | $      | 22,321,127 |   |   | $ | 57,508,249 |   |   | $ | 61,411,222 |   |
|                            |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income (Loss):        |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Overnight Air Cargo             |   | $                               | 773,159    |   |                           | $      | 627,161 |   |   | $ | 2,169,216 |   |   | $ | 2,027,105 |   |
| Ground Equipment Sales          |   |                            | 581,060    |   |                           |   | 1,280,647 |   |   |   | 780,348 |   |   |   | 3,588,369 |   |
| Ground Support Services         |   |                            | 62,223     |   |                           |   | 397,433 |   |   |   | 593,262 |   |   |   | 962,724 |   |
| Corporate                       |   |                            | (501,862   | )      |                           |   | (536,596 | ) |   |   | (1,401,509 | ) |   |   | (1,743,824 | ) |
| Total                           |   | $                               | 914,580    |   |                           | $      | 1,768,645 |   |   | $ | 2,141,317 |   |   | $ | 4,834,374 |   |
|                            |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Capital Expenditures:           |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Overnight Air Cargo             |   | $                               | 7,650      |   |                           | $      | 5,849 |   |   | $ | 31,804 |   |   | $ | 40,434 |   |
| Ground Equipment Sales          |   |                            | 37,457     |   |                           |   | - |   |   |   | 53,149 |   |   |   | 20,436 |   |
| Ground Support Services         |   |                            | 41,850     |   |                           |   | - |   |   |   | 74,490 |   |   |   | 13,304 |   |
| Corporate                       |   |                            | 2,369      |   |                           |   | 517 |   |   |   | 13,894 |   |   |   | 29,254 |   |
| Total                           |   | $                               | 89,326     |   |                           | $      | 6,366 |   |   | $ | 173,337 |   |   | $ | 103,428 |   |
|                            |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and Amortization:  |   |                            |       |   |                           |   |   |   |   |   |   |   |   |
| Overnight Air Cargo             |   | $                               | 49,995     |   |                           | $      | 52,124 |   |   | $ | 147,556 |   |   | $ | 158,271 |   |
| Ground Equipment Sales          |   |                            | 6,029      |   |                           |   | 12,971 |   |   |   | 17,266 |   |   |   | 38,119 |   |
| Ground Support Services         |   |                            | 18,746     |   |                           |   | 27,477 |   |   |   | 73,700 |   |   |   | 81,699 |   |
| Corporate                       |   |                            | 11,559     |   |                           |   | 13,134 |   |   |   | 35,390 |   |   |   | 38,981 |   |
| Total                           |   | $                               | 86,329     |   |                           | $      | 105,706 |   |   | $ | 273,912 |   |   | $ | 317,070 |   |
|                            |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |

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

----

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

| (In thousands)                                     |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                               |   | Three Months Ended December 31, |   |   | Nine Months Ended December 31, |   |
|                                               |   | 2010                            |   | 2009   |                           |   | 2010   |   |   | 2009   |   |
|                                               |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Overnight Air Cargo Segment:                       |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     FedEx                      |   | $                               | 10,719 |   |                           |   | 48     | %      |   | $      | 9,991  |   |   |   | 45     | %      |   | $      | 29,964 |   |   |   | 52     | %      |   | $ | 28,594 |   |   |   | 47 | % |
| Ground Equipment Sales Segment:                    |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Military                   |   |                            | 156    |   |                           |   | 1      | %      |   |   | 4,759  |   |   |   | 21     | %      |   |   | 734    |   |   |   | 1      | %      |   |   | 12,395 |   |   |   | 20 | % |
|     Commercial - Domestic      |   |                            | 6,136  |   |                           |   | 27     | %      |   |   | 3,350  |   |   |   | 15     | %      |   |   | 11,062 |   |   |   | 19     | %      |   |   | 7,744 |   |   |   | 13 | % |
|     Commercial - International |   |                            | 3,744  |   |                           |   | 17     | %      |   |   | 1,660  |   |   |   | 7      | %      |   |   | 9,184  |   |   |   | 16     | %      |   |   | 5,825 |   |   |   | 9 | % |
|                                               |   |                            | 10,036 |   |                           |   | 45     | %      |   |   | 9,769  |   |   |   | 43     | %      |   |   | 20,980 |   |   |   | 36     | %      |   |   | 25,964 |   |   |   | 42 | % |
|                                               |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ground Support Services Segment                    |   |                            | 1,558  |   |                           |   | 7      | %      |   |   | 2,561  |   |   |   | 12     | %      |   |   | 6,564  |   |   |   | 12     | %      |   |   | 6,853 |   |   |   | 11 | % |
|                                               |   | $                               | 22,313 |   |                           |   | 100    | %      |   | $      | 22,321 |   |   |   | 100    | %      |   | $      | 57,508 |   |   |   | 100    | %      |   | $ | 61,411 |   |   |   | 100 | % |
|                                               |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

----

|                                                |   | Nine Months Ended December 31, |       |
|-----------------------------------------------------|--------|--------------------------------|------------|
|                                                |   | 2010                           |       |   | 2009 |   |
|                                                |   |                           |       |   |   |   |
| Net Cash Used in Operating Activities               |   | $                              | (4,861,000 | ) |   | $ | (1,328,000 | ) |
| Net Cash Provided by (Used in) Investing Activities |   |                           | 2,031,000  |   |   |   | (102,000 | ) |
| Net Cash Used in Financing Activities               |   |                           | (812,000   | ) |   |   | (1,270,000 | ) |
|                                                |   |                           |       |   |   |   |   |   |
| Net Decrease in Cash and Cash Equivalents           |   | $                              | (3,642,000 | ) |   | $ | (2,700,000 | ) |
|                                                |   |                           |       |   |   |   |   |   |

| ·   | Economic conditions in the Company’s markets; |
|--------------------|-----------------------------------------------------|

| ·   | The risk that contracts with FedEx could be terminated or that the three ATR aircraft undergoing heavy maintenance will not be assigned by FedEx to MAC; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk that the number of aircraft operated for FedEx will be further reduced; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | The risk that the United States Air Force will defer or substantially reduce orders under its contracts with GGS; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | The impact of any terrorist activities on United States soil or abroad; |
|--------------------|-------------------------------------------------------------------------|

----

| ·   | The Company’s ability to manage its cost structure for operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production volume levels; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The risk of injury or other damage arising from accidents involving the Company’s air cargo operations, equipment sold by GGS or services provided by GGS or GAS; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Market acceptance of the Company’s new commercial and military equipment and services; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | Competition from other providers of similar equipment and services; |
|--------------------|---------------------------------------------------------------------|

| ·   | Changes in government regulation and technology; |
|--------------------|--------------------------------------------------|

| ·   | Mild winter weather conditions reducing the demand for deicing equipment. |
|--------------------|---------------------------------------------------------------------------|

| (a)    |   | Exhibits |   |        |
|--------|--------|----------|--------|-------------|
|   |   | No.      |   | Description |
|   |   |     |   |        |
|   |   |     | 31.1   |        | Section 302 Certification of Chief Executive Officer |
|   |   |     |   |        |   |
|   |   |     | 31.2   |        | Section 302 Certification of Chief Financial Officer |
|   |   |     |   |        |   |
|   |   |     | 32.1   |        | Section 1350 Certifications |

----

----

| (a)    |   | Exhibits |   |        |
|--------|--------|----------|--------|-------------|
|   |   | No.      |   | Description |
|   |   |     |   |        |
|   |   |     | 31.1   |        | Section 302 Certification of Chief Executive Officer |
|   |   |     |   |        |   |
|   |   |     | 31.2   |        | Section 302 Certification of Chief Financial Officer |
|   |   |     |   |        |   |
|   |   |     | 32.1   |        | Section 1350 Certifications |