UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ___________________

                                    FORM 10-Q


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

For  the  quarterly  period  ended     March 31, 2005
                                   ---------------------------------------------

                                       OR

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

For  the  transition  period  from                      to
                                   --------------------    ---------------------

                         Commission file number  0-16079
                                                --------

                             AIR METHODS CORPORATION
                             -----------------------
             (Exact name of Registrant as Specified in Its Charter)


               Delaware                                84-0915893
               --------                                ----------
    (State or Other Jurisdiction of      (I.R.S. Employer Identification Number)
     Incorporation or Organization)

7301 South Peoria, Englewood, Colorado                    80112
--------------------------------------                    -----
(Address of Principal Executive Offices)               (Zip Code)


        Registrant's Telephone Number, Including Area Code (303) 792-7400
                                                           --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.
Yes  X    No
    ---      ---

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).
Yes  X    No
    ---      ---

The  number  of  shares of Common Stock, par value $.06, outstanding as of April
29,  2005,  was  11,030,388.


<PAGE>
<TABLE>
<CAPTION>
                                    TABLE OF CONTENTS

                                        Form 10-Q

PART I.   FINANCIAL INFORMATION
<S>       <C>      <C>                                                                 <C>
          Item 1.  Consolidated Financial Statements

                   Consolidated Balance Sheets - March 31, 2005 and December 31, 2004   1

                   Consolidated Statements of Operations for the three months
                     ended March 31, 2005 and 2004                                      3

                   Consolidated Statements of Cash Flows for the three months ended
                     March 31, 2005 and 2004                                            5

                   Notes to Consolidated Financial Statements                           7

          Item 2.  Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                                         12

          Item 3.  Quantitative and Qualitative Disclosures about Market Risk          23

          Item 4.  Controls and Procedures                                             23

PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                                   24

          Item 2.  Changes in Securities                                               24

          Item 3.  Defaults upon Senior Securities                                     24

          Item 4.  Submission of Matters to a Vote of Security Holders                 24

          Item 5.  Other Information                                                   24

          Item 6.  Exhibits                                                            24




          SIGNATURES                                                                   25
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                 PART I: FINANCIAL INFORMATION

                           ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                            AIR METHODS CORPORATION AND SUBSIDIARIES

                                  CONSOLIDATED BALANCE SHEETS
                   (Amounts in thousands, except share and per share amounts)
                                          (unaudited)

                                                                      MARCH 31,   DECEMBER 31,
                                                                        2005          2004
                                                                     --------------------------
<S>                                                                  <C>          <C>
Assets
------
Current assets:
  Cash and cash equivalents                                          $    2,761          2,603
  Current installments of notes receivable                                   62             61
  Receivables:
    Trade                                                                90,268         89,218
    Less allowance for doubtful accounts                                (26,188)       (26,040)
                                                                     --------------------------
                                                                         64,080         63,178


    Other                                                                 3,318          4,520
                                                                     --------------------------
                                                                         67,398         67,698
                                                                     --------------------------

  Inventories                                                             8,954          8,667
  Work-in-process on medical interiors and products contracts               367            645
  Assets held for sale                                                      582          5,705
  Costs and estimated earnings in excess of billings on
    uncompleted contracts                                                 2,156          2,938
  Prepaid expenses and other                                              2,561          2,686
                                                                     --------------------------

        Total current assets                                             84,841         91,003
                                                                     --------------------------

Property and equipment:
  Land                                                                      190            190
  Flight and ground support equipment                                   139,777        137,742
  Buildings and office equipment                                         11,783         11,805
                                                                     --------------------------
                                                                        151,750        149,737
  Less accumulated depreciation and amortization                        (55,491)       (52,985)
                                                                     --------------------------

        Net property and equipment                                       96,259         96,752
                                                                     --------------------------

Goodwill                                                                  6,485          6,485
Notes and other receivables, less current installments                      331            572
Other assets, net of accumulated amortization of $2,148 and $2,108
  at March 31, 2005 and December 31, 2004, respectively                   9,601          9,911
                                                                     --------------------------

        Total assets                                                 $  197,517        204,723
                                                                     ==========================
</TABLE>
                                                                     (Continued)


                                        1
<PAGE>
<TABLE>
<CAPTION>
                       AIR METHODS CORPORATION AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS, CONTINUED
              (Amounts in thousands, except share and per share amounts)
                                      (unaudited)

                                                              MARCH 31,   DECEMBER 31,
                                                                 2005         2004
                                                              ------------------------
Liabilities and Stockholders' Equity
------------------------------------
<S>                                                           <C>         <C>
Current liabilities:
  Notes payable                                               $       --         5,105
  Current installments of long-term debt                           7,846         6,041
  Current installments of obligations under capital leases           321           410
  Accounts payable                                                 6,578         7,193
  Deferred revenue                                                 4,061         3,883
  Billings in excess of costs and estimated earnings on
    uncompleted contracts                                            190           309
  Accrued wages and compensated absences                           5,831         3,668
  Deferred income taxes                                            3,913         4,387
  Due to third party payers                                        1,789         2,867
  Other accrued liabilities                                        6,160         8,291
                                                              ------------------------

        Total current liabilities                                 36,689        42,154

Long-term debt, less current installments (note 3)                70,961        72,693
Obligations under capital leases, less current installments          198           249
Deferred income taxes                                              8,481         8,284
Other liabilities                                                  8,460         8,264
                                                              ------------------------

        Total liabilities                                        124,789       131,644
                                                              ------------------------

Stockholders' equity (note 5):
  Preferred stock, $1 par value.  Authorized 5,000,000
    shares, none issued                                               --            --
  Common stock, $.06 par value. Authorized 16,000,000
    shares; issued 11,019,761 and 10,997,380 shares at
    March 31, 2005 and December 31, 2004, respectively               661           660
  Additional paid-in capital                                      65,071        64,955
  Retained earnings                                                6,996         7,464
  Treasury stock at par, 4,040 common shares at March
    31, 2005 and December 31, 2004                                    --            --
                                                              ------------------------

        Total stockholders' equity                                72,728        73,079
                                                              ------------------------

        Total liabilities and stockholders' equity            $  197,517       204,723
                                                              ========================
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                AIR METHODS CORPORATION AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                       (Amounts in thousands, except share and per share amounts)
                                              (unaudited)

                                                                         THREE MONTHS ENDED MARCH 31,
                                                                      ---------------------------------
                                                                            2005             2004
                                                                      ---------------------------------
<S>                                                                   <C>               <C>
Revenue:
  Flight revenue                                                      $        66,958           59,577
  Sales of medical interiors and products                                       1,524            2,025
  Parts and maintenance sales and services                                         26               32
                                                                      ---------------------------------
                                                                               68,508           61,634
                                                                      ---------------------------------

Operating expenses:
  Flight centers                                                               25,746           23,046
  Aircraft operations                                                          14,929           13,721
  Aircraft rental                                                               4,280            3,330
  Cost of medical interiors and products sold                                     843              638
  Cost of parts and maintenance sales and services                                 47               47
  Depreciation and amortization                                                 2,897            2,677
  Bad debt expense                                                             10,111            9,740
  Loss on disposition of assets, net                                              107                4
  General and administrative                                                    8,763            7,522
                                                                      ---------------------------------
                                                                               67,723           60,725
                                                                      ---------------------------------

        Operating income                                                          785              909

Other income (expense):
  Interest expense                                                             (1,893)          (2,087)
  Other, net                                                                      373              286
                                                                      ---------------------------------

Loss before income tax benefit and cumulative effect of change in
  accounting principle                                                           (735)            (892)

Income tax benefit                                                                267              348
                                                                      ---------------------------------

Loss before cumulative effect of change in accounting principle                  (468)            (544)

Cumulative effect of change in method of accounting for maintenance
  costs, net of income taxes  (note 2)                                             --            8,595

                                                                      ---------------------------------
        Net income (loss)                                             $          (468)           8,051
                                                                      =================================
</TABLE>

                                                                     (Continued)


                                        3
<PAGE>
<TABLE>
<CAPTION>
                               AIR METHODS CORPORATION AND SUBSIDIARIES

                                CONSOLIDATED STATEMENTS OF OPERATIONS
                      (Amounts in thousands, except share and per share amounts)
                                             (unaudited)

                                                                       THREE MONTHS ENDED MARCH 31,
                                                                    ---------------------------------
                                                                          2005             2004
                                                                    ---------------------------------
<S>                                                                 <C>               <C>
Income (loss) per common share - basic and diluted  (note 4):
  Loss before cumulative effect of change in accounting principle   $          (.04)            (.05)
  Cumulative effect of change in method of accounting for
    maintenance costs, net of income taxes                                       --              .79
                                                                    ---------------------------------
  Net income (loss)                                                 $          (.04)             .74
                                                                    =================================

Weighted average number of common shares outstanding - basic             10,998,232       10,832,455
                                                                    =================================

Weighted average number of common shares outstanding - diluted           10,998,232       10,832,455
                                                                    =================================
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                        AIR METHODS CORPORATION AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (Amounts in thousands)
                                                       (unaudited)

                                                                                          THREE MONTHS ENDED MARCH 31,
                                                                                       ---------------------------------
                                                                                             2005             2004
                                                                                       ---------------------------------
<S>                                                                                    <C>               <C>
Cash flows from operating activities:
  Net income (loss)                                                                    $          (468)           8,051
  Adjustments to reconcile net income (loss) to net cash provided (used) by
    operating activities:
    Depreciation and amortization expense                                                        2,897            2,677
    Bad debt expense                                                                            10,111            9,740
    Deferred income tax benefit                                                                   (277)            (339)
    Loss on retirement and sale of equipment, net                                                  107                4
    Cumulative effect of change in method of accounting for maintenance                             --           (8,595)
    Changes in assets and liabilities:
      Decrease (increase) in prepaid expenses and other current assets                             539             (692)
      Increase in receivables                                                                   (9,811)         (17,632)
      Decrease (increase) in inventories                                                          (287)              14
      Decrease in work-in-process on medical interiors and costs in excess of
        billings                                                                                 1,060              177
      Decrease in accounts payable, other accrued liabilities, and other liabilities            (1,465)          (2,017)
      Increase in deferred revenue and billings in excess of costs                                  59            2,028
                                                                                       ---------------------------------
          Net cash provided (used) by operating activities                                       2,465           (6,584)
                                                                                       ---------------------------------

Cash flows from investing activities:
  Acquisition of equipment and leasehold improvements                                           (2,761)          (4,433)
  Proceeds from disposition and sale of equipment                                                  463                9
  Decrease in notes receivable and other assets, net                                               252               67
                                                                                       ---------------------------------
          Net cash used by investing activities                                                 (2,046)          (4,357)
                                                                                       ---------------------------------
</TABLE>

                                                                     (Continued)


                                        5
<PAGE>
<TABLE>
<CAPTION>
                          AIR METHODS CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                                   (Amounts in thousands)
                                        (unaudited)

                                                             THREE MONTHS ENDED MARCH 31,
                                                                2005             2004
                                                          ---------------------------------
<S>                                                       <C>               <C>
Cash flows from financing activities:
  Net borrowings under line of credit                     $         1,836            8,169
  Proceeds from long-term debt                                         --            8,531
  Payments of long-term debt                                       (2,074)          (9,678)
  Payments of capital lease obligations                              (140)            (165)
  Payments for purchases of common stock                               --             (416)
  Proceeds from issuance of common stock, net                         117              462
                                                          ---------------------------------
        Net cash provided (used) by financing activities             (261)           6,903
                                                          ---------------------------------

Increase (decrease) in cash and cash equivalents                      158           (4,038)

Cash and cash equivalents at beginning of period                    2,603            5,574
                                                          ---------------------------------

Cash and cash equivalents at end of period                $         2,761            1,536
                                                          =================================
</TABLE>

Non-cash investing and financing activities:

In the quarter ended March 31, 2005, the Company settled notes payable of $5,105
in  exchange for the aircraft securing the debt. The Company also settled a note
payable  totaling $85 by applying a purchase deposit against it and entered into
a  note  payable  of  $396  to  finance  insurance  policies.

Effective  January  1,  2004,  the  Company changed its method of accounting for
major  engine  and  airframe component overhaul costs from the accrual method of
accounting  to  the direct expense method. Accordingly, the Company reversed its
major  overhaul  accrual  totaling $33,809 for all owned and leased aircraft and
reversed the remaining capitalized maintenance included in fixed assets relating
to  used  aircraft purchases totaling $19,719, with the balance reflected as the
cumulative  effect  of change in accounting principle of $8,595 ($14,090, net of
income  taxes  of  $5,495).




See  accompanying  notes  to  consolidated  financial  statements.


                                        6
<PAGE>
AIR  METHODS  CORPORATION  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


(1)  BASIS  OF  PRESENTATION
     -----------------------

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared  in  accordance  with generally accepted accounting principles for
     interim  financial  information  and  the  instructions  to  Form  10-Q and
     Regulation  S-X.  Accordingly,  the  accompanying  unaudited  consolidated
     financial  statements  contain  all  adjustments (consisting of only normal
     recurring  accruals) necessary to present fairly the consolidated financial
     statements  for the respective periods. Interim results are not necessarily
     indicative  of  results  for  a  full  year.  The  consolidated  financial
     statements  should  be  read  in  conjunction  with  the  Company's audited
     consolidated  financial  statements  and  notes  thereto for the year ended
     December 31, 2004.

     The  preparation  of  financial  statements  in  conformity with accounting
     principles  generally  accepted  in  the  United States of America requires
     management  to  make  estimates  and  assumptions  that affect the reported
     amounts  of  assets and liabilities and disclosure of contingent assets and
     liabilities  at  the  date  of  the  financial  statements and the reported
     amounts  of  revenue  and expenses during the reporting period. The Company
     considers  its  critical  accounting  policies  involving  more significant
     judgments  and  estimates  to  be  those  related  to  revenue recognition,
     uncollectible  receivables,  deferred  income  taxes,  and depreciation and
     residual values. Actual results could differ from those estimates.

     Certain  prior  period  amounts  have  been  reclassified  to  conform with
     the 2005 presentation.

(2)  ACCOUNTING  CHANGE
     ------------------

     Effective  January  1,  2004,  the  Company  changed  its  method  of
     accounting  for major engine and airframe component overhaul costs from the
     accrual  method  of  accounting to the direct expense method. Under the new
     accounting  method,  maintenance  costs  are  recognized  as  expense  as
     maintenance services are performed. The Company believes the direct-expense
     method is preferable in the circumstances because the maintenance liability
     is  not  recorded  until there is an obligating event (when the maintenance
     event  is  actually  being performed), the direct expense method eliminates
     significant  estimates and judgments inherent under the accrual method, and
     it  is  the  predominant  method  used  in  the  transportation  industry.
     Accordingly,  effective  January  1,  2004,  the Company reversed its major
     overhaul accrual totaling $33,809,000 for all owned and leased aircraft and
     reversed  the  remaining  capitalized  maintenance included in fixed assets
     relating  to used aircraft purchases totaling $19,719,000, with the balance
     reflected  as  the  cumulative  effect of change in accounting principle of
     $8,595,000 ($14,090,000, net of income taxes of $5,495,000).

     In  2002,  the  impact  of  the major overhaul accrual relating to aircraft
     purchased  in  the  Rocky  Mountain  Holdings,  LLC  (RMH)  acquisition was
     considered  a component of the valuation of the aircraft and did not affect
     the  allocation  of the purchase price to goodwill. Accordingly, the change
     in  method  to the direct expense method in 2004 resulted in a reduction in
     the  asset  value  assigned  to  RMH aircraft. The amount of the cumulative
     effect  of  the  change in accounting principle related to RMH aircraft was
     due  exclusively  to  depreciation  of  the  asset  value or changes in the
     liability  balances  which had been expensed subsequent to the acquisition.
     Therefore,  the  majority  of  the  cumulative  effect  of  the  change  in
     accounting  principle related to aircraft which were in the Company's fleet
     prior to the RMH acquisition.


                                        7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(3)  LONG-TERM  DEBT
     ---------------

     On  May  9,  2005,  the  Company  amended and restated its senior revolving
     credit  facility  and  repaid its subordinated debt facility. The amendment
     provides  for,  among other things, $20 million of term loans, an extension
     of  the maturity date to March 31, 2010, and modifications to the financial
     covenants.  The  proceeds  from  the  term  loans,  along  with  additional
     borrowings  under  the  revolving  credit  facility, were used to repay the
     Company's  $23  million  of  subordinated  debt.  The  term  loans  and the
     revolving  loans  bear interest, at the Company's option, at either (i) the
     higher  of the federal funds rate plus 0.50% or the prime rate as announced
     by  the  lenders  plus  an applicable margin ranging from 0.50% to 1.50% or
     (ii)  a rate equal to LIBOR plus an applicable margin ranging from 1.75% to
     3.75%. Principal payments on the term loans will commence in April 2006 and
     total  $4.5  million  in  2006,  $6 million in 2007, $3 million in 2008, $2
     million  in  2009, and $4.5 million in 2010. In the second quarter of 2005,
     the  Company wrote off approximately $1.8 million in debt origination costs
     and  note  discount  related to the subordinated debt and paid a prepayment
     penalty  of  approximately  $1.4 million to the holders of the subordinated
     debt.  For  the  first  quarter of 2005, the effective interest rate on the
     subordinated  debt,  including  amortization  of debt origination costs and
     note  discount,  was  16.2%.  At  March  31,  2005,  the Company was not in
     compliance  with  covenants  which require a minimum fixed charge ratio (as
     defined  in  the agreements) under both its subordinated debt agreement and
     senior  revolving credit facility. The debt is not classified as current in
     the  consolidated  financial  statements  as  a  result  of  the  covenant
     violations because of the refinancing described above.


(4)  INCOME  (LOSS)  PER  SHARE
     --------------------------

     Basic  earnings  per  share  is  computed  by dividing net income (loss) by
     the weighted average number of common shares outstanding during the period.
     Diluted  earnings  per  share  is  computed  by  dividing net income by all
     outstanding and dilutive potential common shares during the period.

     The  reconciliation  of  basic  to  diluted  weighted average common shares
     outstanding is as follows for the quarters ended March 31:

<TABLE>
<CAPTION>
                                                                   2005        2004
                                                                ----------  ----------
<S>                                                             <C>         <C>
Weighted average number of common shares outstanding - basic    10,998,232  10,832,455
Dilutive effect of:
  Common stock options                                                  --          --
  Common stock warrants                                                 --          --
                                                                ----------------------
Weighted average number of common shares outstanding - diluted  10,998,232  10,832,455
                                                                ======================
</TABLE>

     Common  stock  options  totaling  1,012,500  and 1,137,856 and common stock
     warrants  totaling  574,716  and  599,716  were not included in the diluted
     shares  outstanding  for  the  quarters  ended  March  31,  2005  and 2004,
     respectively, because their effect would have been anti-dilutive.


                                        8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(5)  STOCKHOLDERS'  EQUITY
     ---------------------

     Changes  in  stockholders'  equity  for  the  three  months ended March 31,
     2005,  consisted  of  the  following  (amounts  in  thousands  except share
     amounts):

<TABLE>
<CAPTION>
                                                 Shares Outstanding   Amount
                                                 ----------------------------
<S>                                              <C>                 <C>
Balances at January 1, 2005                              10,993,340  $73,079

Issuance of common shares for options exercised              22,381      117
Net loss                                                         --     (468)
                                                 ----------------------------

Balances at March 31, 2005                               11,015,721  $72,728
                                                 ============================
</TABLE>

(6)  STOCK-BASED COMPENSATION
     ------------------------

     The  Company  accounts  for  its  employee  stock  compensation  plans  as
     prescribed under Accounting Principles Board Opinion No. 25, Accounting for
     Stock  Issued to Employees (APB Opinion 25). Because the Company grants its
     options  at or above market value, no compensation cost has been recognized
     relating  to the plans. Had compensation cost for the Company's stock-based
     compensation  plans  been  determined  based on the fair value at the grant
     dates  for  awards  under  those  plans  consistent  with the provisions of
     Statement  123,  the  Company's  net income and income per share would have
     been  reduced  to  the  pro  forma amounts indicated below for the quarters
     ended March 31 (amounts in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                     2005    2004
                                                    ------  ------
<S>                                                 <C>     <C>
Net loss before cumulative effect of change in
  accounting principle:
    As reported                                     $(468)   (544)
    Pro forma                                        (544)   (616)

Net income (loss):
    As reported                                     $(468)  8,051
    Pro forma                                        (544)  7,979

Basic and diluted loss per share before cumulative
  effect of change in accounting principle:
    As reported                                     $(.04)   (.05)
    Pro forma                                        (.05)   (.06)

Basic and diluted net income (loss) per share:
    As reported                                     $(.04)    .74
    Pro forma                                        (.05)    .74
</TABLE>

     The  fair  value  of  each  option  grant is estimated on the date of grant
     using  the  Black-Scholes  option-pricing model with the following weighted
     average  assumptions used for grants in the first quarter of 2004: dividend
     yield  of 0%; expected volatility of 30%; risk-free interest rates of 3.3%;
     and  expected  life  of 4 years. The weighted average fair value of options
     granted during the quarter ended March 31, 2004, was $2.81. No options were
     granted during the first quarter of 2005.


                                        9
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS,  CONTINUED


(6)  STOCK-BASED COMPENSATION, CONTINUED
     -----------------------------------

     In  December  2004,  the  Financial  Accounting  Standards  Board  (FASB)
     issued FASB Statement No. 123R (Statement 123R), Accounting for Stock-Based
     Compensation,  an  amendment  of  FASB  Statement  No.  123. Statement 123R
     requires  recognition  of  the  grant-date  fair value of stock options and
     other equity-based compensation issued to employees in the income statement
     and  provides  for  either a modified prospective or modified retrospective
     transition  method  for  adopting  the  statement.  The  statement  will be
     effective  for  the  Company  beginning with the first quarter of 2006. The
     Company  has  not  yet determined which transition method it will apply nor
     the  impact of adopting Statement 123R on its financial position or results
     of operations.

(7)  BUSINESS SEGMENT INFORMATION
     ----------------------------

     Summarized  financial  information  for  the  Company's  operating segments
     is  shown  in  the  following  table (amounts in thousands). Amounts in the
     "Corporate  Activities"  column  represent corporate headquarters expenses,
     corporate  income tax expense, and results of insignificant operations. The
     Company  does  not  allocate  assets  between  HBM, Products, and Corporate
     Activities  for  internal  reporting  and  performance evaluation purposes.
     Operating segments and their principal products or services are as follows:

     -    Community-Based  Model  (CBM)  -  provides  air medical transportation
          services  to  the  general  population  as  an  independent service in
          17  states.  Services  include  aircraft  operation  and  maintenance,
          medical  care,  dispatch  and  communications, and medical billing and
          collection.
     -    Hospital-Based  Model  (HBM)  -  provides  air  medical transportation
          services  to  hospitals  in  26  states  and  Puerto  Rico  under
          exclusive  operating  agreements.  Services include aircraft operation
          and maintenance.
     -    Products  Division  -  designs,  manufactures,  and  installs aircraft
          medical  interiors  and  other  aerospace  and  medical  transport
          products for domestic and international customers.


                                       10
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS,  CONTINUED

(7)  BUSINESS SEGMENT INFORMATION, CONTINUED
     ---------------------------------------

<TABLE>
<CAPTION>
                                                                Products   Corporate   Intersegment
FOR QUARTER ENDED MARCH 31:                     CBM      HBM    Division  Activities   Eliminations   Consolidated
-------------------------------------------------------------------------------------------------------------------
<S>                                           <C>       <C>     <C>       <C>          <C>            <C>
2005
External revenue                              $44,618   22,366     1,524          --             --         68,508
Intersegment revenue                               --       --     2,787          --         (2,787)            --
                                              ---------------------------------------------------------------------
Total revenue                                  44,618   22,366     4,311          --         (2,787)        68,508
                                              ---------------------------------------------------------------------

Operating expenses                             31,835   19,564     3,321       2,312         (2,317)        54,715
Depreciation & amortization                     1,397    1,348        91          61             --          2,897
Bad debt expense                               10,108        3        --          --             --         10,111
Interest expense                                  976      892        --          25             --          1,893
Other income, net                                (226)                          (147)            --           (373)
Income tax benefit                                 --       --        --        (267)            --           (267)
                                              ---------------------------------------------------------------------
Segment net income (loss)                     $   528      559       899      (1,984)          (470)          (468)
                                              =====================================================================

Total assets                                  $66,995      N/A       N/A     132,686         (2,164)       197,517
                                              =====================================================================

2004
External revenue                              $39,044   20,565     2,025          --             --         61,634
Intersegment revenue                               --       --     2,166          --         (2,166)            --
                                              ---------------------------------------------------------------------
Total revenue                                  39,044   20,565     4,191          --         (2,166)        61,634
                                              ---------------------------------------------------------------------

Operating expenses                             27,402   18,206     2,483       1,984         (1,767)        48,308
Depreciation & amortization                     1,330    1,257        42          48             --          2,677
Bad debt expense                                9,740       --        --          --             --          9,740
Interest expense                                1,029      967        --          91             --          2,087
Other income, net                                (229)      --        --         (57)            --           (286)
Income tax benefit                                 --       --        --        (348)            --           (348)
                                              ---------------------------------------------------------------------
Segment net income (loss) before cumulative
  effect of change in accounting principle       (228)     135     1,666      (1,718)          (399)          (544)
Cumulative effect of change in accounting
  principle, net                                   --       --        --       8,595             --          8,595
                                              ---------------------------------------------------------------------
Segment net income (loss)                     $  (228)     135     1,666       6,877           (399)         8,051
                                              =====================================================================

Total assets                                  $56,027   N/A     N/A          146,799         (2,164)       200,662
                                              =====================================================================
</TABLE>


                                       11
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

The  following  discussion  of the results of operations and financial condition
should  be  read  in  conjunction  with  the  Company's  consolidated  financial
statements  and  notes  thereto  included in Item 1 of this report. This report,
including  the  information  incorporated by reference, contains forward-looking
statements  as  defined in the Private Securities Litigation Reform Act of 1995.
The  use  of  any  of  the  words  "believe,"  "expect,"  "anticipate,"  "plan,"
"estimate,"  and  similar  expressions are intended to identify such statements.
Forward-looking  statements  include  statements  concerning possible or assumed
future  results  of the Company; size, structure and growth of the Company's air
medical  services  and  products  markets;  continuation  and/or  renewal of HBM
contracts; acquisition of new and profitable Products Division contracts; flight
volume  and  collection  rates for CBM operations; and other matters. The actual
results  that the Company achieves may differ materially from those discussed in
such  forward-looking statements due to the risks and uncertainties described in
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations,  and  in  other sections of this report, as well as in the Company's
annual  report  on Form 10-K. The Company undertakes no obligation to update any
forward-looking  statements.

OVERVIEW

The  Company  provides air medical transportation services throughout the United
States  and  designs,  manufactures, and installs medical aircraft interiors and
other aerospace products for domestic and international customers. The Company's
divisions,  or business segments, are organized according to the type of service
or  product  provided  and  consist  of  the  following:
-    Community-Based  Model (CBM) - provides air medical transportation services
     to  the  general  population  as  an  independent service. Revenue consists
     of flight fees billed directly to patients, their insurers, or governmental
     agencies, and cash flow is dependent upon collection from these individuals
     or entities. In the first quarter of 2005 the CBM Division generated 65% of
     the  Company's  total  revenue, increasing from 63% in the first quarter of
     2004.
-    Hospital-Based  Model  (HBM) - provides air medical transportation services
     to  hospitals  throughout  the  U.S.  under exclusive operating agreements.
     Revenue consists of fixed monthly fees (approximately 65% of total contract
     revenue)  and  hourly  flight  fees  (approximately  35%  of total contract
     revenue) billed to hospital customers. In the first quarter of 2005 the HBM
     Division  generated 33% of the Company's total revenue, decreasing from 34%
     in 2004.
-    Products  Division  -  designs, manufactures, and installs aircraft medical
     interiors  and  other  aerospace  and  medical  transport  products  for
     domestic  and  international  customers.  In  the first quarter of 2005 the
     Products  Division  generated 2% of the Company's total revenue, decreasing
     from 3% in 2004.

See  Note  7 to the consolidated financial statements included in Item 1 of this
report  for  operating  results  by  segment.

The  Company believes that the following factors have the greatest impact on its
results  of  operations  and  financial  condition:
-    FLIGHT  VOLUME.  Fluctuations in flight volume have a greater impact on CBM
     operations  than  HBM  operations  because  100%  of CBM revenue is derived
     from  flight  fees,  as  compared  to  35%  of  HBM  revenue.  By contrast,
     approximately  66%  of the Company's costs primarily associated with flight
     operations  (including  salaries, aircraft ownership costs, hull insurance,
     and  general and administrative expenses) are mainly fixed in nature. While
     flight  volume  is  affected by many factors, including competition and the
     distribution  of  calls  within  a  market,  the greatest single factor has
     historically  been  weather  conditions. Adverse weather conditions-such as
     fog,  high  winds,  or  heavy precipitation-hamper the Company's ability to
     operate  its  aircraft  safely  and,  therefore,  result  in reduced flight
     volume.  Total  patient  transports  for  CBM operations were approximately
     6,700 for the first quarter of 2005 compared to approximately 7,000 for the
     first  quarter  of  2004. Patient transports for CBM bases open longer than
     one  year  (Same-Base  Transports)  were  approximately  6,200 in the first
     quarter  of  2005 compared to approximately 6,800 in the first three months
     of 2004. During the first quarter of 2005, the Company's CBM operations had
     approximately  500,  or  31%, more cancellations as a result of unfavorable
     weather  conditions  than during 2004 for bases which had been in operation
     for longer than one year.


                                       12
<PAGE>
-    RECEIVABLE  COLLECTIONS.  The  Company  responds  to  calls for air medical
     transports  without  pre-screening  the  creditworthiness  of  the patient.
     For  CBM  operations,  bad  debt expense is estimated during the period the
     related  services  are performed based on historical collection experience.
     The  provision  is  adjusted  as  required  based  on actual collections in
     subsequent  periods.  Both  the  pace  of  collections  and  the  ultimate
     collection  rate  are  affected  by the overall health of the U.S. economy,
     which  impacts  the  number  of indigent patients and funding for state-run
     programs,  such  as  Medicaid.  Medicaid  reimbursement  rates  in  many
     jurisdictions  have  remained  well below the cost of providing air medical
     transportation.  The  Company  increased  prices  for  its  CBM  operations
     approximately  10%  effective September 2004 and an additional 7% effective
     March  2005.  Net  revenue  after  bad debt expense per transport increased
     22.2%  in  the first quarter of 2005 compared to the first quarter of 2004.
     The  total  allowance  for  expected  uncollectible  amounts,  including
     contractual  discounts  for Medicare/Medicaid and bad debts, decreased from
     49.6% of related gross flight revenue for the quarter ended March 31, 2004,
     to  45.1%  in  the  first  quarter  of  2005. In 2004 the Company increased
     staffing  in  the  billing and collections department, segmented billing by
     region,  and  hired  a national billing director. The Company believes that
     these  organizational  changes  to  the billing department resulted in more
     timely  billing and follow up on outstanding accounts and, therefore, in an
     improvement  in  collection  rates.  Days'  sales  outstanding, measured by
     comparing  net  revenue for the previous 12-month period to outstanding net
     accounts receivable, decreased from 148 days at March 31, 2004, to 105 days
     at March 31, 2005.

-    AIRCRAFT  MAINTENANCE. Both CBM and HBM operations are directly affected by
     fluctuations  in  aircraft  maintenance  costs.  Proper  operation  of  the
     aircraft by flight crews and standardized maintenance practices can help to
     contain  maintenance  costs.  Increases in spare parts prices from original
     equipment manufacturers (OEM's) tend to be higher for aircraft which are no
     longer  in  production.  Three  models  of helicopters within the Company's
     fleet,  representing  27%  of  the total rotor wing fleet, are no longer in
     production and are, therefore, susceptible to price increases which outpace
     general  inflationary trends. In addition, on-condition components are more
     likely  to  require replacement with age. Total maintenance expense for CBM
     and HBM operations increased 10.3% in the first quarter of 2005 compared to
     2004,  while  total flight volume for CBM and HBM operations increased 1.9%
     over  the  same  period. The Company continues to evaluate opportunities to
     modernize  its fleet in order to enhance long-term control over maintenance
     costs.  Replacement  models  of  aircraft,  however,  typically have higher
     ownership  costs  than  the  models  targeted  for replacement. In 2004 the
     Company  entered  into two long-term purchase commitments for a total of 25
     aircraft,  designed  to  replace  the  discontinued  models and other older
     aircraft  over  the  next  five  to  seven years. As of March 31, 2005, the
     Company had taken delivery of ten aircraft under these commitments.

-    COST  PRESSURES  ON  HEALTHCARE INSTITUTIONS. Publicly and privately funded
     healthcare  institutions  both  face  pressures  to  reduce the rising cost
     of  healthcare  and to modify or eliminate certain non-core operations as a
     result of reductions in funding. Flight programs based at a single hospital
     typically  require  subsidization  from  other  hospital  operations.  As a
     result,  a  growing  number of healthcare institutions are evaluating their
     delivery  model for air medical transportation services, creating expansion
     opportunities  for  CBM  operations.  In the first quarter of 2005, the CBM
     division  commenced  operations  at  two  new bases in California which had
     previously  been a hospital-based flight program with another operator. The
     Company  expects  the  trend  toward  conversion  of  HBM  programs  to CBM
     operations  to  continue  as  healthcare  institutions recognize the viable
     alternatives available for outsourcing.

-    COMPETITIVE  PRESSURES  FROM  LOW-COST PROVIDERS. The Company is recognized
     within  the  industry  for  its  standard  of  service  and  its  use  of
     cabin-class  aircraft.  Many  of the Company's regional competitors utilize
     aircraft  with  lower  ownership  and  operating costs and do not require a
     similar  level  of  experience  for  aviation  and  medical  personnel.
     Reimbursement  rates  established by Medicare, Medicaid, and most insurance
     providers  are  not  contingent  upon  the  type  of  aircraft  used or the
     experience  of personnel. However, the Company believes that higher quality
     standards  help  to  differentiate  its  service  from  competitors  and,
     therefore,  lead  to  higher  utilization. Deploying multiple aircraft in a
     market also serves as a barrier to entry for lower cost providers.


                                       13
<PAGE>
-    EMPLOYEE  RELATIONS.  In  September  2003, the Company's pilots voted to be
     represented  by  a  collective  bargaining  unit.  Negotiations  on  a
     collective  bargaining  agreement  have  continued  since early 2004, and a
     mediator  was  appointed  in  the  fourth  quarter  of  2004 to assist with
     resolving  differences  between the parties. Other employee groups may also
     elect  to  be  represented  by  unions  in the future. Although the Company
     believes that current salary and benefits arrangements are competitive with
     others within the industry, the impact of a collective bargaining agreement
     on the cost of operations has not yet been determined.


RESULTS  OF  OPERATIONS

The Company reported a net loss of $468,000 for the three months ended March 31,
2005,  compared to net income of $8,051,000 for the three months ended March 31,
2004. Net income for the first quarter of 2004 included the cumulative effect of
a  change in accounting principle of $8,595,000, as discussed more fully in Note
2  to  the  consolidated financial statements included in Item 1 of this report.
Before  the cumulative effect of the change in accounting principle, the Company
reported  a  net  loss  of $544,000 for the first quarter of 2004. A decrease of
9.3%  in  Same-Base Transports for CBM bases was offset during the first quarter
of  2005  by  an  increase  of  22.2%  in  net  reimbursement  (revenue  after
Medicare/Medicaid  discounts  and  bad  debt  expense)  for  CBM  operations. In
addition,  the average net margin earned on medical interior sales declined from
49%  in the first quarter of 2004 to 29% in the first quarter of 2005. The three
months  ended  March  31, 2005, also included an increase in expense of $593,000
for the self-insured portion of workers compensation premiums as a result of two
fatal  accidents  experienced  in  the  first  quarter.

FLIGHT  OPERATIONS  -  COMMUNITY-BASED  MODEL  AND  HOSPITAL-BASED  MODEL

FLIGHT  REVENUE  increased $7,381,000, or 12.4%, from $59,577,000 to $66,958,000
for  the  three months ended March 31, 2005, compared to 2004. Flight revenue is
generated  by  both  CBM  and  HBM operations and is recorded net of contractual
allowances  under  agreements  with  third-party  payers  and  Medicare/Medicaid
discounts.
-    CBM  - Flight revenue increased $5,587,000, or 14.3%, to $44,599,000 in the
     three  months  ended  March  31,  2005, compared to 2004, for the following
     reasons:
     -    Revenue  of  $3,584,000 from the addition of nine new CBM bases either
          during or subsequent to the first quarter of 2004.
     -    Closure  of  one  base in the first quarter of 2004 and one during the
          third  quarter  of  2004,  resulting  in  a  decrease  in  revenue  of
          approximately $565,000.
     -    Average  price  increases  of approximately 10% for all CBM operations
          effective  September  2004  and  approximately  7%  effective March 1,
          2005.
     -    Decrease  in  Same-Base  Transports.  Excluding  the impact of the new
          bases  and  base  closures  discussed  above,  total flight volume for
          all  CBM  operations  decreased  9.3%  in  the  first  quarter of 2005
          compared to the prior year. The decrease in flight volume is primarily
          attributed  to  adverse  weather  conditions.  Cancellations  due  to
          unfavorable  weather conditions were approximately 30.6% higher in the
          first quarter of 2005 compared to 2004.
-    HBM  - Flight revenue increased $1,794,000, or 8.7%, to $22,359,000 for the
     quarter ended March 31, 2005, for the following reasons:
     -    Revenue  of  $1,451,000  from  the  addition  of two new bases and the
          expansion  of  three  contracts  either  during  or  subsequent to the
          first quarter of 2004.
     -    Discontinuation of service under one contract during the first quarter
          of  2004,  resulting  in  a  decrease  in  revenue  of  approximately
          $88,000.
     -    Annual  price  increases in the majority of contracts based on changes
          in the Consumer Price Index and in hull insurance rates.
     -    Decrease  of 4.9% in flight volume for all contracts excluding the new
          contracts,  contract  expansions,  and  discontinued  contract
          discussed above.


                                       14
<PAGE>
FLIGHT  CENTER COSTS (consisting primarily of pilot, mechanic, and medical staff
salaries  and  benefits)  increased $2,700,000, or 11.7%, to $25,746,000 for the
quarter ended March 31, 2005, compared to 2004. Flight center costs in the first
quarter of 2005 included an increase of $505,000 in workers compensation expense
as a result of two fatal accidents experienced during the quarter. Other changes
by  business  segment  are  as  follows:
-    CBM  -  Flight  center costs increased $2,128,000, or 14.6%, to $16,715,000
     for the following reasons:
     -    Approximately  $1,812,000  for  the addition of personnel to staff new
          base locations described above.
     -    Decrease  of  approximately  $335,000  due  to  the  closure  of  base
          locations described above.
-    HBM  -  Flight  center  costs  increased  $574,000,  or 6.8%, to $9,032,000
     primarily due to the following:
     -    Approximately $616,000 for the addition of personnel to staff new base
          locations described above.
     -    Decrease of approximately $35,000 due to the closure of base locations
          described above.

AIRCRAFT OPERATING EXPENSES increased $1,208,000, or 8.8%, for the quarter ended
March  31,  2005,  in  comparison  to the quarter ended March 31, 2004. Aircraft
operating  expenses  consist primarily of fuel, insurance, and maintenance costs
and  generally  are a function of the size of the fleet, type of aircraft flown,
and  number  of  hours  flown.  The  increase  in costs is due to the following:
-    Addition  of  13  helicopters  for CBM operations and 7 helicopters for HBM
     operations  after  March  31,  2004,  resulting  in  an  increase  of
     approximately $991,000.
-    Increase of approximately 9.5% in the cost of aircraft fuel per hour flown.
-    Decrease  in  hull  insurance  rates  effective  July  2004.

AIRCRAFT  RENTAL  EXPENSE increased $950,000, or 28.5%, for the first quarter of
2005  compared  to  the  first  quarter  of  2004.  Rental expense for 11 leased
aircraft  added to the Company's fleet since March 31, 2004, totaled $801,000 in
the  three  months  ended  March  31,  2005.

BAD  DEBT  EXPENSE  increased $371,000, or 3.8%, for the quarter ended March 31,
2005, compared to 2004, due primarily to the increase in related flight revenue.
Bad  debt  expense  as a percentage of related net flight revenue decreased from
25.0% in the first quarter of 2004 to 22.5% in the first quarter of 2005. Flight
revenue  is recorded net of Medicare/Medicaid discounts. The total allowance for
expected  uncollectible  amounts, including contractual discounts and bad debts,
decreased from 49.6% of related gross flight revenue for the quarter ended March
31,  2004,  to 45.1% in the first quarter of 2005. The Company believes that the
improvement  in  collection  rates  is  primarily  the  result of organizational
changes within its billing department which provided for more timely billing and
follow  up  on  outstanding accounts. In addition, transports covered by private
insurance, which tends to reimburse at a higher rate than other types of payers,
accounted  for 39% of total transports in the first quarter of 2005, compared to
32%  in  the first quarter of 2004. Reimbursement rates are typically higher for
transports  covered  by  private  insurance  than  for  those  covered  by
Medicare/Medicaid.  Bad  debt  expense  related  to  HBM operations and Products
Division  was  not  significant  in  either  2005  or  2004.


MEDICAL  INTERIORS  AND  PRODUCTS

SALES  OF  MEDICAL  INTERIORS  AND  PRODUCTS  decreased $501,000, or 24.7%, from
$2,025,000  for  the  three  months  ended March 31, 2004, to $1,524,000 for the
first  quarter  of  2005.  Significant  projects  in  the  first quarter of 2005
included  continued production of 13 Multi-Mission Medevac Systems for the U. S.
Army's  HH-60L  Black  Hawk  helicopter,  19  litter systems for the U.S. Army's
Medical  Evacuation  Vehicle  (MEV),  a  multi-mission  interior  for a Sikorsky
FIREHAWK  helicopter for the Los Angeles County Fire Department, and two modular
medical  interiors for a commercial customer. Production of the 19 MEV units and
11  of  the  HH-60L  units  was  completed  during the first quarter. Revenue by
product  line  was  as  follows:
-    $404,000  -  manufacture  and  installation  of  modular  medical interiors
-    $786,000  -  manufacture  of  multi-mission  interiors
-    $334,000  - design and manufacture of other aerospace and medical transport
     products


                                       15
<PAGE>
Significant projects in the first quarter of 2004 included ongoing production of
11  HH-60L  units  and  21  MEV  units.  Revenue by product line was as follows:
-    $209,000  -  manufacture  and  installation  of  modular  medical interiors
-    $1,191,000  -  manufacture  of  multi-mission  interiors
-    $625,000  - design and manufacture of other aerospace and medical transport
     products

COST  OF  MEDICAL  INTERIORS  AND PRODUCTS increased $205,000, or 32.1%, for the
three months ended March 31, 2005, as compared to the previous year. The average
net  margin earned on projects during the first quarter of 2005 was 29% compared
to  49%  in 2004, primarily due to the change in product mix. The margins earned
on  multi-mission  interiors  are  typically  higher  than the margins earned on
modular  medical  interiors  for commercial customers. Cost of medical interiors
and  products also includes certain fixed costs, such as administrative salaries
and  facilities  rent,  which  do  not  vary  with  volume  of  sales.


GENERAL  EXPENSES

DEPRECIATION  AND AMORTIZATION EXPENSE increased $220,000, or 8.2% for the three
months ended March 31, 2005, compared to 2004, primarily as a result of upgrades
to  aircraft,  engines,  and  avionics  systems  and  to the purchase of rotable
equipment.

GENERAL  AND  ADMINISTRATIVE  (G&A) EXPENSES increased $1,241,000, or 16.5%, for
the  quarter ended March 31, 2005, compared to the quarter ended March 31, 2004,
reflecting  the  growth  in  the  Company's  operations.  G&A  expenses  include
accounting  and  finance,  billing  and  collections,  human resources, aviation
management,  pilot  training,  dispatch  and  communications,  and  CBM  program
administration.  G&A  expenses were 12.8% of revenue for 2005, compared to 12.2%
for  2004.  During  the  first  quarter  of  2005,  the  Company  also  incurred
approximately $298,000 in audit fees and outside consultant costs related to the
audit  of internal controls required by Section 404 of the Sarbanes-Oxley Act of
2002 for the year ended December 31, 2004. The Company also increased the number
of  billing and collections department personnel by 33% during the first quarter
of  2004  to address slowdowns in collections and incurred three months of costs
at  the  higher  staffing  level in 2005, compared to a partial quarter in 2004.

INTEREST  EXPENSE  decreased  $194,000,  or  9.3%, in the first quarter of 2005,
compared  to  the  first  quarter  of  2004,  primarily as a result of regularly
scheduled  payments  of  long-term  debt  and  decreased  borrowings against the
Company's  line  of  credit. The average balance outstanding against the line of
credit  was $17.0 million in the first quarter of 2005 compared to $19.6 million
in  the  first  quarter  of  2004.

DEFERRED  INCOME  TAX  BENEFIT was $277,000 and $339,000 in the first quarter of
2005  and 2004, respectively, both at an effective rate of approximately 39%. In
the first quarter of 2005, the Company also recognized $10,000 of current income
tax  expense  for  estimated  state  income  taxes.


LIQUIDITY  AND  CAPITAL  RESOURCES

The  Company's  working  capital position as of March 31, 2005, was $48,152,000,
relatively  unchanged  from  $48,849,000  at  December  31,  2004.

The  Company  had  cash and cash equivalents of $2,761,000 as of March 31, 2005,
compared  to  $2,603,000  at  December  31,  2004.  Company operations generated
$2,465,000  in cash in the first quarter of 2005 compared to using $6,584,000 in
2004.  Receivable  balances,  net of bad debt expense, decreased $300,000 in the
first  quarter of 2005 compared to increasing $7,892,000 in the first quarter of
2004,  reflecting  a  slower  rate  of  growth  in  2005  and the results of the
Company's  efforts  to  improve the pace of collections. Days' sales outstanding
for  CBM  operations, measured by comparing net revenue for the previous 6-month
period  to outstanding net accounts receivable, decreased from 148 days at March
31,  2004,  to  105  days  at  March  31,  2005.


                                       16
<PAGE>
Cash  used  by  investing  activities  totaled  $2,046,000  in  2005 compared to
$4,357,000  in  2004.  Equipment  acquisitions  in  the  first  quarter  of 2005
consisted  primarily of rotable equipment and upgrades to aircraft, engines, and
avionics systems. In the first quarter of 2005, the Company received $463,000 in
insurance  proceeds  for  an  aircraft  destroyed  in  an  accident.  Equipment
acquisitions  in  the  first  quarter  of  2004  consisted  primarily of medical
interior  and avionics installations, information systems hardware and software,
and  rotable  equipment.

Financing  activities used $261,000 in 2005 compared to generating $6,903,000 in
2004.  The  primary  use  of  cash in both 2005 and 2004 was regularly scheduled
payments of long-term debt and capital lease obligations. In 2004 these payments
were  offset  by proceeds from new note agreements, which were used primarily to
refinance  existing debt with higher interest rates, and by higher draws against
the  Company's  line  of  credit.

On  May  9,  2005,  the Company amended and restated its senior revolving credit
facility  and repaid its subordinated debt facility. The amendment provides for,
among other things, $20 million of term loans, an extension of the maturity date
to  March  31,  2010, and modifications to the financial covenants. The proceeds
from the term loans, along with additional borrowings under the revolving credit
facility, were used to repay the Company's $23 million of subordinated debt. The
term  loans  and  the revolving loans bear interest, at the Company's option, at
either  (i) the higher of the federal funds rate plus 0.50% or the prime rate as
announced  by  the lenders plus an applicable margin ranging from 0.50% to 1.50%
or  (ii)  a  rate equal to LIBOR plus an applicable margin ranging from 1.75% to
3.75%.  Principal  payments  on  the  term loans will commence in April 2006 and
total  $4.5  million in 2006, $6 million in 2007, $3 million in 2008, $2 million
in  2009,  and  $4.5 million in 2010. In the second quarter of 2005, the Company
wrote off approximately $1.8 million in debt origination costs and note discount
related  to the subordinated debt and paid a prepayment penalty of approximately
$1.4  million  to the holders of the subordinated debt. For the first quarter of
2005,  the  effective  interest  rate  on  the  subordinated  debt,  including
amortization  of  debt  origination costs and note discount, was 16.2%. At March
31,  2005,  the  Company  was  not  in compliance with covenants which require a
minimum  fixed  charge  ratio  (as  defined  in  the  agreements) under both its
subordinated  debt  agreement  and senior revolving credit facility. The debt is
not  classified  as current in the consolidated financial statements as a result
of the covenant violations because of the refinancing described above.

OUTLOOK  FOR  2005

The  statements  contained  in  this  Outlook are based on current expectations.
These  statements are forward-looking, and actual results may differ materially.
The  Company  undertakes no obligation to update any forward-looking statements.

Community-Based  Model

In  the  first  quarter  of  2005,  the  Company  purchased  the operations of a
hospital-based  program  which  had  been  served  by another vendor in northern
California  and  expanded it from one base to two. The Company also discontinued
operations  at a base in Missouri due to low flight volume. CBM flight volume at
all  other  locations  during  2005 is expected to be consistent with historical
levels, subject to seasonal, weather-related fluctuations. The Company continues
to  evaluate  opportunities  to  expand  the  CBM  model  in  other communities.

Hospital-Based  Model

In April 2005, the Company expanded three existing contracts in Utah, Minnesota,
and  West  Virginia  to  additional satellite bases. The Company expects similar
expansions under two other existing contracts during the second quarter of 2005.
Twelve  hospital  contracts  are  due for renewal in 2005. One was renewed for a
5-year  term  during  the  first  quarter of 2005, and renewals on the remaining
eleven contracts are still pending. The Company expects 2005 flight activity for
continuing  hospital  contracts  to  remain  consistent  with historical levels.


                                       17
<PAGE>
Products  Division

As  of  March  31, 2005, the Company was continuing the production of two HH-60L
units  for  the  U.S.  Army, a multi-mission interior for the Los Angeles County
Fire Department, and two modular medical interiors for a commercial customer. In
the  second  quarter  of 2005, the Company received a contract for 21 additional
MEV  units,  plus  spare  parts,  with deliveries scheduled into 2006. Remaining
revenue  for all contracts in process as of March 31, 2005, is estimated at $2.3
million.

The  current U.S. Army Aviation Modernization Plan defines a requirement for 180
HH-60L Multi-Mission Medevac units in total over an unspecified number of years.
The Company has already completed 26 HH-60L units under the program, in addition
to  the  2  currently  under  contract.  The  U.S.  Army  has  also forecasted a
requirement  for  a  total  of  119  MEV  units  over  4  years; the Company has
previously  delivered  82  units,  in  addition  to the 21 units currently under
contract.  There  is  no  assurance  that  orders  for  additional units will be
received  in  future  periods.

All  Segments

The  Company  expects to implement new software for major information technology
systems, including patient billing and inventory tracking, in 2005. The majority
of  the  cost  of  new  systems  is  expected to be financed through capital and
operating  lease  agreements.

There  can  be  no  assurance  that the Company will continue to maintain flight
volume or current levels of collections on receivables for CBM operations, renew
operating  agreements  for  its  HBM  operations,  or  generate  new  profitable
contracts  for  the Products Division. Based on the anticipated level of HBM and
CBM  flight  activity and the projects in process for the Products Division, the
Company  expects  to generate sufficient cash flow to meet its operational needs
throughout the remainder of 2005. The Company also had approximately $14,285,000
in  borrowing capacity available under its revolving credit facility as of March
31,  2005.

RISK FACTORS

Actual  results  achieved  by  the  Company  may  differ  materially  from those
described  in  forward-looking  statements  as  a  result  of  various  factors,
including  but  not  limited to, those discussed above in "Outlook for 2005" and
those  described  below.

-    Flight  volume  -  All  CBM  revenue  and  approximately 35% of HBM revenue
     is  dependent  upon flight volume. Approximately 35% of the Company's total
     operating  expenses  also vary with number of hours flown. Poor visibility,
     high  winds,  and  heavy  precipitation  can  affect  the safe operation of
     aircraft  and  therefore  result in a reduced number of flight hours due to
     the  inability to fly during these conditions. Prolonged periods of adverse
     weather  conditions could have an adverse impact on the Company's operating
     results.  Typically, the months from November through February tend to have
     lower  flight volume due to weather conditions and other factors, resulting
     in  lower  CBM operating revenue during these months. Flight volume for CBM
     operations  can  also  be  affected  by  the  distribution  of  calls among
     competitors  by  local  government  agencies  and  the  entrance  of  new
     competitors into a market.

-    Collection  rates  -  The  Company  responds  to  calls  for  air  medical
     transport  without  pre-screening  the creditworthiness of the patient. The
     CBM  division  invoices  patients  and their insurers directly for services
     rendered  and  recognizes  revenue net of estimated contractual allowances.
     The  level  of  bad  debt  expense  is  driven by collection rates on these
     accounts.  Changes  in  estimated  contractual allowances and bad debts are
     recognized  based  on  actual  collections  in  subsequent  periods.
     Collectibility  is affected by the number of uninsured or indigent patients
     transported  and  is, therefore, primarily dependent upon the health of the
     U.S. economy. A significant or sustained downturn in the U.S. economy could
     have an adverse impact on the Company's bad debt expense.


                                       18
<PAGE>
-    Highly  leveraged  balance  sheet  -  The  Company  is obligated under debt
     facilities providing for up to approximately $97.7 million of indebtedness,
     of  which approximately $79.3 million was outstanding at March 31, 2005. If
     the  Company  fails  to  meet its payment obligations or otherwise defaults
     under  the  agreements  governing  indebtedness,  the  lenders  under those
     agreements  will have the right to accelerate the indebtedness and exercise
     other  rights  and  remedies against the Company. These rights and remedies
     include the rights to repossess and foreclose upon the assets that serve as
     collateral,  initiate  judicial foreclosure against the Company, petition a
     court  to  appoint  a  receiver  for  the Company, and initiate involuntary
     bankruptcy  proceedings  against  the  Company.  If  lenders exercise their
     rights  and  remedies,  the Company's assets may not be sufficient to repay
     outstanding  indebtedness,  and  there  may  be  no  assets remaining after
     payment of indebtedness to provide a return on common stock.

-    Restrictive  debt  covenants  -  The  subordinated  notes and senior credit
     facility,  into which the Company entered to finance the acquisition of RMH
     both  contain  restrictive  financial  and  operating  covenants, including
     restrictions  on the Company's ability to incur additional indebtedness, to
     exceed  certain annual capital expenditure limits, and to engage in various
     corporate  transactions  such as mergers, acquisitions, asset sales and the
     payment  of  cash  dividends.  These  covenants will restrict future growth
     through  the  limitation  on capital expenditures and acquisitions, and may
     adversely  impact  the  Company's  ability  to implement its business plan.
     Failure  to  comply  with  the  covenants  defined  in the agreements or to
     maintain  the required financial ratios could result in an event of default
     and accelerate payment of the principal balances due under the subordinated
     notes  and  the  senior credit facility. Given factors beyond the Company's
     control,  such as interruptions in operations from unusual weather patterns
     not  included  in  current  projections, there can be no assurance that the
     Company  will  be  able to remain in compliance with financial covenants in
     the  future,  or  that, in the event of non-compliance, the Company will be
     able  to  obtain  waivers from the lenders, or that to obtain such waivers,
     the  Company will not be required to pay lenders significant cash or equity
     compensation.  In May 2005, the Company amended its senior revolving credit
     facility  which  provided  funds  to  retire  the  subordinated  debt.  The
     restrictive  operating covenants under the senior revolving credit facility
     are unchanged by the amendment.

-    Employee  unionization  -  In  September  2003,  the Company's pilots voted
     to  be  represented  by  a  collective  bargaining  unit,  the  Office  and
     Professional  Employees  International  Union. Negotiations on a collective
     bargaining  agreement  have  continued since early 2004, and a mediator was
     appointed  in  the  fourth  quarter  of  2004  to  assist  with  resolving
     differences between the parties. Other employee groups may also elect to be
     represented  by  unions  in  the future. Although the Company believes that
     current salary and benefits arrangements are competitive with others within
     the  industry,  the impact of a collective bargaining agreement on the cost
     of operations has not yet been determined.

-    Governmental  regulation  -  The  air  medical  transportation services and
     products  industry  is  subject  to  extensive  regulation  by governmental
     agencies,  including  the  Federal  Aviation  Administration,  which impose
     significant  compliance  costs  on  the Company. In addition, reimbursement
     rates  for air ambulance services established by governmental programs such
     as  Medicare  directly affect CBM revenue and indirectly affect HBM revenue
     from customers. Changes in laws or regulations or reimbursement rates could
     have  a  material  adverse  impact  on  the Company's cost of operations or
     revenue from flight operations. In January 2005 the Company experienced two
     fatal  accidents  which  are  currently under investigation by the National
     Transportation  Safety  Board.  The outcome of these investigations and the
     potential impact on the Company's operations cannot yet be ascertained.

-    Compliance  with  corporate  governance  and  public disclosure regulations
     - New laws, regulations, and standards relating to corporate governance and
     public  disclosure-including  the  Sarbanes-Oxley  Act  of  2002,  new  SEC
     regulations,  and  NASDAQ  National  Market  rules-are  subject  to varying
     interpretations in many cases due to lack of specificity. Their application
     may  evolve  over  time  as  new  guidance  is  provided  by regulatory and
     governing  bodies,  which  may  result  in continuing uncertainty regarding
     compliance  matters  and  higher costs necessitated by ongoing revisions to
     disclosure and governance practices. The Company's efforts to maintain high
     standards  of corporate governance and public disclosure in compliance with
     evolving  laws and regulations have resulted in, and are likely to continue
     to result in, increased general and administrative expenses and a diversion
     of  management's  time  and attention from revenue-generating activities to
     compliance  activities.  In  particular, compliance with Section 404 of the
     Sarbanes-Oxley  Act  of  2002,  which  requires  the  Company  to  include
     management and auditor reports on internal


                                       19
<PAGE>
     controls  as  part  of  its  annual  report,  has  required  commitment  of
     significant financial and managerial resources. In addition, board members,
     the  chief  executive  officer,  and  chief financial officer could face an
     increased  risk of personal liability in connection with the performance of
     their  duties.  As a result, the Company may have difficulty attracting and
     retaining  qualified  board  members  and executive officers. If efforts to
     comply with new or changed laws, regulations, and standards differ from the
     activities  intended  by  regulatory or governing bodies due to ambiguities
     related to practice, the Company's reputation may be harmed.

-    Internal  controls  -  The  Company  is  required  by  Section  404  of the
     Sarbanes-Oxley  Act  of  2002  to include management and auditor reports on
     internal  controls  as part of its annual report. Management concluded that
     internal  control  over  financial  reporting was effective at December 31,
     2004,  and  the Company's independent auditors attested to that conclusion.
     There  can  be  no  assurance that material weaknesses in internal controls
     over  financial  reporting will not be discovered in the future or that the
     Company and its independent auditors will be able to conclude that internal
     control over financial reporting is effective in the future. Although it is
     unclear  what  impact  failure  to  comply  fully  with  Section 404 or the
     discovery  of  a  material  weakness  in  internal  controls over financial
     reporting  would  have  on  the  Company,  it  may  subject  the Company to
     regulatory  scrutiny  and  result  in  additional  expenditures to meet the
     requirements,  a reduced ability to obtain financing, or a loss of investor
     confidence in the accuracy of the Company's financial reports.

-    Competition  -  HBM  operations  face  significant competition from several
     national  and  regional  air medical transportation providers for contracts
     with  hospitals  and  other  healthcare  institutions.  In  addition to the
     national  and regional providers, CBM operations also face competition from
     smaller  regional  carriers and alternative air ambulance providers such as
     sheriff  departments.  Operators  generally  compete on the basis of price,
     safety record, accident prevention and training, and the medical capability
     of  the aircraft. The Company's competition in the aircraft interior design
     and  manufacturing  industry  comes primarily from three companies based in
     the  United  States  and  three  in  Europe. Competition is based mainly on
     product  availability,  price,  and product features, such as configuration
     and  weight.  There  can  be  no assurance that the Company will be able to
     continue  to  compete  successfully  for  new  or renewing contracts in the
     future.

-    Fuel  costs  -  Fuel  accounted  for  2.0%  of total operating expenses for
     the  quarter  ended  March 31, 2005. Both the cost and availability of fuel
     are  influenced by many economic and political factors and events occurring
     in  oil-producing  countries throughout the world, and fuel costs fluctuate
     widely.  Recently the price per barrel of oil has been at an all-time high.
     The  Company  cannot  predict the future cost and availability of fuel. The
     unavailability  of  adequate  fuel supplies could have an adverse effect on
     the  Company's  cost  of  operations  and  profitability.  Generally,  the
     Company's  HBM  customers  pay  for  all  fuel consumed in medical flights.
     However,  the  Company's  ability  to  pass on increased fuel costs for CBM
     operations  may  be  limited  by economic and competitive conditions and by
     reimbursement  rates  established  by  Medicare,  Medicaid,  and  insurance
     providers.  The  Company does not currently have any agreements in place to
     hedge its fuel costs.

-    Aviation  industry  hazards  and  insurance  limitations  -  Hazards  are
     inherent  in  the  aviation  industry  and  may  result in loss of life and
     property, thereby exposing the Company to potentially substantial liability
     claims  arising  out  of the operation of aircraft. The Company may also be
     sued  in  connection  with  medical  malpractice claims arising from events
     occurring during a medical flight. Under HBM operating agreements, hospital
     customers  have  agreed  to indemnify the Company against liability arising
     out  of  medical malpractice claims and to maintain insurance covering such
     liability, but there can be no assurance that a hospital will not challenge
     the  indemnification  rights  or  will  have sufficient assets or insurance
     coverage  for  full indemnity. In CBM operations, Company personnel perform
     medical procedures on transported patients, which may expose the Company to
     significant  direct  legal  exposure  to  medical  malpractice  claims. The
     Company  maintains  general  liability aviation insurance, aviation product
     liability  coverage,  and  medical malpractice insurance, and believes that
     the  level of coverage is customary in the industry and adequate to protect
     against  claims.  However,  there  can  be  no  assurance  that  it will be
     sufficient  to  cover  potential  claims or that present levels of coverage
     will  be  available  in  the future at reasonable cost. A limited number of
     hull  and liability insurance underwriters provide coverage for air medical
     operators. A significant downturn in insurance market conditions could have
     a  material  adverse  effect  on  the  Company's  cost  of  operations.
     Approximately  33%  of any increases in hull and liability insurance may be
     passed  through to the Company's HBM customers according to contract terms.
     In  addition, the loss of any aircraft as a result of accidents could cause
     both significant adverse


                                       20
<PAGE>
     publicity  and  interruption  of  air medical services to client hospitals,
     which  could  adversely  affect  the  Company's  operating  results  and
     relationship  with  such  hospitals. The impact of the January accidents on
     the  Company's  hull and liability insurance rates is not yet known. In the
     first  quarter  of  2005,  the  Company  recorded an increase in expense of
     $593,000 for the self-insured portion of workers compensation premiums as a
     result  of  the  accidents.

-    Foreign  ownership  -  Federal  law  requires  that  United  States  air
     carriers  be citizens of the United States. For a corporation to qualify as
     a  United  States  citizen,  the  president  and at least two-thirds of the
     directors  and  other  managing  officers of the corporation must be United
     States  citizens and at least 75% of the voting interest of the corporation
     must  be  owned  or controlled by United States citizens. If the Company is
     unable  to  satisfy  these  requirements,  operating  authority  from  the
     Department  of  Transportation  may  be revoked. Furthermore, under certain
     loan  agreements, an event of default occurs if less than 80% of the voting
     interest  is owned or controlled by United States citizens. As of March 31,
     2005,  the Company was aware of one foreign person who, according to recent
     public  securities  filings,  is  believed  to  hold approximately 10.1% of
     outstanding  Common  Stock.  Because  the  Company is unable to control the
     transfer  of  its  stock,  it  is  unable  to  assure that it can remain in
     compliance with these requirements in the future.

-    Dependence  on  third  party  suppliers  -  The Company currently obtains a
     substantial  portion of its helicopter spare parts and components from Bell
     Helicopter, Inc., (Bell) and American Eurocopter Corporation (AEC), because
     its  fleet  is  composed  primarily  of  Bell  and Eurocopter aircraft, and
     maintains supply arrangements with other parties for its engine and related
     dynamic  components. Based upon the manufacturing capabilities and industry
     contacts  of  Bell,  AEC, and other suppliers, the Company believes it will
     not  be  subject  to material interruptions or delays in obtaining aircraft
     parts  and components but does not have an alternative source of supply for
     Bell,  AEC,  and certain other aircraft parts. Failure or significant delay
     by  these  vendors  in  providing  necessary parts could, in the absence of
     alternative  sources  of  supply,  have  a  material  adverse effect on the
     Company.  Because of its dependence upon Bell and AEC for helicopter parts,
     the  Company  may  also  be  subject to adverse impacts from unusually high
     price  increases  which  are  greater  than  overall  inflationary  trends.
     Increases in the Company's monthly and hourly flight fees billed to its HBM
     customers  may  be  limited  to  changes  in the consumer price index. As a
     result,  an  unusually high increase in the price of parts may not be fully
     passed on to the Company's HBM customers.

-    Employee  recruitment  and  retention  -  An  important  aspect  of  the
     Company's  operations  is the ability to hire and retain employees who have
     advanced  aviation,  nursing,  and  other  technical  skills.  In addition,
     hospital contracts typically contain minimum certification requirements for
     pilots  and  mechanics.  Employees  who  meet  these standards are in great
     demand  and  are  likely  to  remain  a limited resource in the foreseeable
     future.  If the Company is unable to recruit and retain a sufficient number
     of  these employees, the ability to maintain and grow the business could be
     negatively impacted.

-    Department  of  Defense  funding  -  Several  of  the  projects  which have
     historically been significant sources of revenue for the Products Division,
     including  HH-60L and MEV systems, are dependent upon Department of Defense
     funding. Failure of the U.S. Congress to approve funding for the production
     of  additional  HH-60L or MEV units could have a material adverse impact on
     Products Division revenue.


CRITICAL  ACCOUNTING  POLICIES

The Company's consolidated financial statements have been prepared in accordance
with  accounting  principles  generally  accepted  in  the  United  States.  The
preparation  of these financial statements requires management to make estimates
and  assumptions  that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting  period.


                                       21
<PAGE>
On  an  on-going  basis,  management  evaluates  its  estimates  and  judgments,
including  those  related  to  revenue  recognition,  uncollectible receivables,
deferred  income  taxes,  and depreciation and residual values. Management bases
its  estimates  and  judgments  on  historical  experience  and on various other
factors  that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may  differ  from  these  estimates  under  different assumptions or conditions.
Management  believes  the following critical accounting policies affect its more
significant  judgments and estimates used in the preparation of its consolidated
financial  statements.

Revenue  Recognition

Fixed flight fee revenue under the Company's operating agreements with hospitals
is  recognized monthly over the terms of the agreements. Flight revenue relating
to patient transports is recognized upon completion of the services. Revenue and
accounts  receivable  are recorded net of estimated contractual allowances under
agreements  with  third-party  payers.  Estimates  of contractual allowances are
initially  determined  based on historical discount percentages for Medicare and
Medicaid patients and adjusted periodically based on actual discounts. If actual
discounts  realized  are  more  or  less  than  those  projected  by management,
adjustments  to  contractual  allowances  may  be  required. Based on CBM flight
revenue  for  the quarter ended March 31, 2005, a change of 1% in the percentage
of  estimated  contractual  discounts  would  have  resulted  in  a  change  of
approximately  $633,000  in  flight  revenue.

Revenue related to fixed fee medical interior and products contracts is recorded
as  costs  are incurred using the percentage of completion method of accounting.
The  Company  estimates  the percentage of completion based on costs incurred to
date  as a percentage of an estimate of the total costs to complete the project.
Losses on contracts in process are recognized when determined. If total costs to
complete  a  project are greater or less than estimated, the gross margin on the
project  may be greater or less than originally recorded under the percentage of
completion  method.

Uncollectible  Receivables

The  Company  responds to calls for air medical transports without pre-screening
the  credit  worthiness  of  the  patient.  Uncollectible  trade receivables are
charged  to  operations  using  the allowance method. Estimates of uncollectible
receivables  are  determined  monthly  based  on historical collection rates and
adjusted  monthly  thereafter  based  on  actual  collections.  If actual future
collections  are more or less than those projected by management, adjustments to
allowances for uncollectible accounts may be required. There can be no guarantee
that  the  Company will continue to experience the same collection rates that it
has in the past. Based on CBM net flight revenue for the quarter ended March 31,
2005, a change of 1% in the percentage of estimated uncollectible accounts would
have  resulted  in  a  change  of  approximately  $449,000  in bad debt expense.

Deferred  Income  Taxes

In preparation of the consolidated financial statements, the Company is required
to estimate income taxes in each of the jurisdictions in which it operates. This
process  involves estimating actual current tax exposure together with assessing
temporary  differences  resulting  from  differing  treatment  of items, such as
depreciable  assets  and  maintenance reserves, for tax and accounting purposes.
These  differences  result  in  deferred  tax  assets and liabilities, which are
included  in  the  consolidated  balance  sheets.  The Company then assesses the
likelihood  that  deferred  tax  assets  will be recoverable from future taxable
income  and  records a valuation allowance for those amounts it believes are not
likely  to  be  realized.  Establishing or increasing a valuation allowance in a
period  increases  income  tax  expense.  The Company considers estimated future
taxable income, tax planning strategies, and the expected timing of reversals of
existing  temporary  differences in assessing the need for a valuation allowance
against  deferred tax assets. In the event the Company were to determine that it
would  not  be able to realize all or part of its net deferred tax assets in the
future,  an  adjustment to the valuation allowance would be charged to income in
the  period  such determination was made. Likewise, should the Company determine
that it would be able to realize its deferred tax assets in the future in excess
of  its  net  recorded  amount,  an  adjustment to the valuation allowance would
increase  income  in  the  period  such  determination  was  made.


                                       22
<PAGE>
Depreciation  and  Residual  Values

In  accounting  for  long-lived  assets,  the  Company makes estimates about the
expected  useful  lives,  projected  residual  values  and  the  potential  for
impairment.  Estimates of useful lives and residual values of aircraft are based
upon  actual  industry  experience  with  the same or similar aircraft types and
anticipated  utilization of the aircraft. Changing market prices of new and used
aircraft,  government  regulations  and  changes  in  the  Company's maintenance
program  or  operations could  result  in changes to these estimates. Long-lived
assets  are evaluated for impairment whenever events or changes in circumstances
indicate  that  the  carrying  amount  of  an  asset  may  not  be  recoverable.
Recoverability  of long-lived assets is measured by a comparison of the carrying
amount  of  an  asset  to  future net cash flows expected to be generated by the
asset.

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

Market  risk  is the potential loss arising from adverse changes in market rates
and prices, such as foreign currency exchange and interest rates. The Company is
subject to interest rate risk on its debt obligations and notes receivable, most
of  which  have fixed interest rates, except $16,556,000 outstanding against the
line of credit and $2,077,000 in notes payable. Based on the amounts outstanding
at  March  31, 2005, the annual impact of a 1% change in interest rates would be
approximately  $186,000. Interest rates on these instruments approximate current
market  rates  as  of  March  31,  2005.

Periodically  the  Company  enters  into  interest  rate risk hedges to minimize
exposure  to  the effect of an increase in interest rates. As of March 31, 2005,
the  Company  was  party to one interest rate swap agreement. The swap agreement
provides  that  the  Company will pay a 3.62% fixed interest rate on $901,000 of
notional  principal  and  receive a floating interest rate (LIBOR plus 2.50%) on
the  same  amount  of  notional  principal  from  the  counterparty.


ITEM  4.  CONTROLS  AND  PROCEDURES

DISCLOSURE  CONTROLS  AND  PROCEDURES

The  Company  maintains  disclosure controls and procedures that are designed to
ensure  that information required to be disclosed in the Company's reports filed
or  submitted  to  the  Securities  and Exchange Commission under the Securities
Exchange  Act  of  1934,  as  amended,  is  recorded,  processed, summarized and
reported  within the time periods specified by the Commission's rules and forms,
and  that  information  is accumulated and communicated to management, including
the  principal  executive  and financial officers (referred to in this report as
the  Certifying  Officers),  as  appropriate to allow timely decisions regarding
required  disclosure.  Management,  under  the  supervision  and  with  the
participation  of  the  Certifying  Officers,  evaluated  the  effectiveness  of
disclosure  controls  and  procedures  as  of  March  31, 2005, pursuant to Rule
13a-15(b)  under  the  Exchange  Act.  Based  on that evaluation, the Certifying
Officers  have  concluded  that,  as of March 31, 2005, the Company's disclosure
controls  and  procedures  were  effective.

CHANGES  IN  INTERNAL  CONTROL  OVER  FINANCIAL  REPORTING

There  were  no  significant  changes  in  the  Company's  internal control over
financial  reporting  that  occurred  during  the most recently completed fiscal
quarter  that  have  materially affected, or are reasonably likely to materially
affect,  the  Company's  internal  control  over  financial  reporting.


                                       23
<PAGE>
                           PART II: OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

               Not Applicable.

ITEM 2.        CHANGES IN SECURITIES

               Not Applicable.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

               Not Applicable.

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               Not Applicable.

ITEM 5.        OTHER INFORMATION

               Not Applicable.

ITEM 6.        EXHIBITS

               31.1      Chief  Executive Officer Certification adopted pursuant
                         to Section 302 of the Sarbanes-Oxley Act of 2002

               31.2      Chief  Financial Officer Certification adopted pursuant
                         to Section 302 of the Sarbanes-Oxley Act of 2002

               32        Certification  adopted  pursuant  to Section 906 of the
                         Sarbanes-Oxley Act of 2002


                                       24
<PAGE>
SIGNATURES

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


                 AIR METHODS CORPORATION


Date:  May 10, 2005                           By  \s\  Aaron D. Todd
                                                --------------------------------
                                                  Aaron D. Todd
                                                  Chief Executive Officer
                                                  (Principal Executive Officer)


Date:  May 10, 2005                           By   \s\  Trent J. Carman
                                                --------------------------------
                                                  Trent J. Carman
                                                  Chief Financial Officer
                                                  (Principal Financial Officer)


Date:  May 10, 2005                           By   \s\  Sharon J. Keck
                                                --------------------------------
                                                  Sharon J. Keck
                                                  Chief Accounting Officer
                                                  (Principal Accounting Officer)


                                       25