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, 2004
                               -------------------------------------------------

                                       OR

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

For the transition period from ___________________ to ___________________


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

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

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

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      No  X
                                                        ---     ---

The  number  of shares of Common Stock, par value $.06, outstanding as of May 7,
2004,  was  10,839,822.


<PAGE>
                                TABLE OF CONTENTS

                                    Form 10-Q



PART I.     FINANCIAL INFORMATION

     Item 1.   Consolidated Financial Statements

               Consolidated Balance Sheets - March 31, 2004 and December
                  31, 2003                                                     1

               Consolidated Statements of Operations for the three
                  months ended March 31, 2004 and 2003                         3

               Consolidated Statements of Cash Flows for the three
                  months ended March 31, 2004 and 2003                         5

               Notes to Consolidated Financial Statements                      7

     Item 2.   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                   11

     Item 3.   Quantitative and Qualitative Disclosures about Market Risk     22

     Item 4.   Controls and Procedures                                        22

PART II.    OTHER INFORMATION

     Item 1.   Legal Proceedings                                              23

     Item 2.   Changes in Securities                                          23

     Item 3.   Defaults upon Senior Securities                                23

     Item 4.   Submission of Matters to a Vote of Security Holders            23

     Item 5.   Other Information                                              23

     Item 6.   Exhibits and Reports on Form 8-K                               23



     SIGNATURES                                                               24


<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,
                                                                         2004          2003
                                                                     --------------------------
<S>                                                                  <C>          <C>
Assets
------

Current assets:
   Cash and cash equivalents                                         $    1,536          5,574
   Current installments of notes receivable                                  59             58
   Receivables:
      Trade                                                              92,701         82,786
      Less allowance for doubtful accounts                              (25,158)       (23,220)
                                                                     --------------------------
                                                                         67,543         59,566

      Other                                                               3,335          3,420
                                                                     --------------------------
                                                                         70,878         62,986
                                                                     --------------------------

   Inventories                                                            9,129          9,143
   Work-in-process on medical interiors and products contracts              340            145
   Assets held for sale                                                     432            431
   Costs and estimated earnings in excess of billings on
      uncompleted contracts                                               1,877          2,249
   Deferred tax asset                                                        --            105
   Prepaid expenses and other                                             2,344          1,653
                                                                     --------------------------

         Total current assets                                            86,595         82,344
                                                                     --------------------------

Property and equipment:
   Land                                                                     190            190
   Flight and ground support equipment (note 2)                         130,642        149,568
   Buildings and office equipment                                        11,103         10,436
                                                                     --------------------------
                                                                        141,935        160,194
   Less accumulated depreciation and amortization                       (46,218)       (47,117)
                                                                     --------------------------

         Net property and equipment                                      95,717        113,077
                                                                     --------------------------

Goodwill                                                                  6,485          6,485
Notes and other receivables, less current installments                    1,289          1,426
Other assets, net of accumulated amortization of $1,512 and $1,347
   at March 31, 2004 and December 31, 2003, respectively                 10,576         10,675
                                                                     --------------------------

         Total assets                                                $  200,662        214,007
                                                                     ==========================

                                                                                    (Continued)
</TABLE>


                                        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,
                                                                  2004         2003
                                                              -------------------------
<S>                                                           <C>         <C>
Liabilities and Stockholders' Equity
------------------------------------

Current liabilities:
   Current installments of long-term debt                     $    6,050         6,110
   Current installments of obligations under capital leases        2,821         2,886
   Accounts payable                                                5,499         6,097
   Accrued overhaul and parts replacement costs (note 2)              --         7,702
   Deferred revenue                                                3,713         2,898
   Billings in excess of costs and estimated earnings on
      uncompleted contracts                                        1,387           174
   Deferred income taxes                                           1,487            --
   Accrued wages and compensated absences                          4,890         6,015
   Other accrued liabilities                                       7,392         6,780
                                                              -------------------------

         Total current liabilities                                33,239        38,662

Long-term debt, less current installments                         83,762        76,680
Obligations under capital leases, less current installments          151           251
Accrued overhaul and parts replacement costs (note 2)                 --        26,107
Deferred income taxes (note 2)                                     8,715         5,151
Other liabilities                                                  6,010         6,468
                                                              -------------------------

         Total liabilities                                       131,877       153,319
                                                              -------------------------

Stockholders' equity (note 4):
   Preferred stock, $1 par value.  Authorized 5,000,000
      shares, none issued                                             --            --
   Common stock, $.06 par value. Authorized 16,000,000
      shares; issued 10,884,967 and 10,817,594 shares at
      March 31, 2004 and December 31, 2003,
      respectively                                                   653           649
   Additional paid-in capital                                     64,458        64,413
   Retained earnings (accumulated deficit)  (note 2)               3,677        (4,374)
   Treasury stock at par, 45,624 common shares at March
      31, 2004                                                        (3)           --
                                                              -------------------------

         Total stockholders' equity                               68,785        60,688
                                                              -------------------------

         Total liabilities and stockholders' equity           $  200,662       214,007
                                                              =========================
<FN>

See accompanying notes to consolidated financial statements.
</TABLE>


                                        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,
                                                                     ----------------------------
                                                                           2004          2003
                                                                     ----------------------------
<S>                                                                  <C>             <C>
Revenue:
   Flight revenue                                                    $      59,577        52,376
   Sales of medical interiors and products                                   2,025         1,335
   Parts and maintenance sales and services                                     32           243
                                                                     ----------------------------
                                                                            61,634        53,954
                                                                     ----------------------------

Operating expenses:
   Flight centers                                                           24,246        20,311
   Aircraft operations                                                      13,721        13,184
   Aircraft rental                                                           3,330         2,801
   Cost of medical interiors and products sold                                 638         1,124
   Cost of parts and maintenance sales and services                             47           241
   Depreciation and amortization                                             2,677         2,748
   Bad debt expense                                                          9,740         7,986
   Loss on disposition of assets, net                                            4            13
   General and administrative                                                6,322         4,704
                                                                     ----------------------------
                                                                            60,725        53,112
                                                                     ----------------------------

         Operating income                                                      909           842

Other income (expense):
   Interest expense                                                         (2,087)       (2,006)
   Interest and dividend income                                                  4             3
   Other, net                                                                  282           315
                                                                     ----------------------------

Loss before income tax benefit and cumulative effect of change in
   accounting principle                                                       (892)         (846)

Income tax benefit                                                             348           330
                                                                     ----------------------------

Loss before cumulative effect of change in accounting principle               (544)         (516)

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

                                                                     ----------------------------
         Net income (loss)                                           $       8,051          (516)
                                                                     ============================

                                                                                      (Continued)
</TABLE>


                                        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,
                                                                     ----------------------------
                                                                         2004         2003
                                                                     ----------------------------
<S>                                                                  <C>             <C>
Income (loss) per common share - basic and diluted  (note 3):
   Loss before cumulative effect of change in accounting principle   $        (.05)         (.05)
   Cumulative effect of change in method of accounting for
      maintenance costs, net of income taxes                                   .79            --
                                                                     ----------------------------
   Net income (loss)                                                 $         .74          (.05)
                                                                     ============================

Pro forma results, assuming change in method of accounting for
maintenance costs was applied retroactively (note 2):
   Net income                                                                        $       805
                                                                                     ============
   Basic and diluted income per common share                                         $       .08
                                                                                     ============

Weighted average number of common shares outstanding - basic            10,832,455     9,521,884
                                                                     ============================

Weighted average number of common shares outstanding - diluted          11,258,883     9,864,211
                                                                     ============================
<FN>


See accompanying notes to consolidated financial statements.
</TABLE>


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

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

                                                                                    THREE MONTHS ENDED MARCH 31,
                                                                                    ----------------------------
                                                                                         2004          2003
                                                                                    ----------------------------
<S>                                                                                 <C>            <C>
Cash flows from operating activities:
   Net income (loss)                                                                $      8,051           (516)
   Adjustments to reconcile net income (loss) to net cash used by operating
      activities:
      Depreciation and amortization expense                                                2,677          2,748
      Bad debt expense                                                                     9,740          7,986
      Deferred income tax benefit                                                           (339)          (330)
      Loss on retirement and sale of equipment, net                                            4             13
      Common stock options and warrants issued for services                                   --             75
      Cumulative effect of change in method of accounting for maintenance                 (8,595)            --
      Changes in assets and liabilities:
         Decrease (increase) in prepaid and other current assets                            (692)         1,300
         Increase in receivables                                                         (17,632)       (10,175)
         Decrease (increase) in inventories                                                   14           (289)
         Decrease (increase) in work-in-process on medical interiors and costs in
            excess of billings                                                               177           (560)
         Decrease in accounts payable, other accrued liabilities, and other
            liabilities                                                                   (2,017)        (1,905)
         Increase in deferred revenue and billings in excess of costs                      2,028            168
         Increase in accrued overhaul and parts replacement costs                             --          1,124
                                                                                    ----------------------------
               Net cash used by operating activities                                      (6,584)          (361)
                                                                                    ----------------------------

Cash flows from investing activities:
   Acquisition of equipment and leasehold improvements                                    (4,433)          (988)
   Proceeds from disposition and sale of equipment                                             9             10
   Decrease in notes receivable and other assets, net                                         67            322
                                                                                    ----------------------------
               Net cash used by investing activities                                      (4,357)          (656)
                                                                                    ----------------------------

                                                                                                     (Continued)
</TABLE>


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

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

                                                                                    THREE MONTHS ENDED MARCH 31,
                                                                                    ----------------------------
                                                                                         2004          2003
                                                                                    ----------------------------
<S>                                                                                 <C>            <C>
Cash flows from financing activities:
   Net borrowings under line of credit                                              $      8,169   $      2,040
   Proceeds from long-term debt                                                            8,531          2,490
   Payments of long-term debt                                                             (9,678)        (1,768)
   Payments of capital lease obligations                                                    (165)          (176)
   Payments for purchases of common stock                                                   (416)           (32)
   Proceeds from issuance of common stock, net                                               462            274
                                                                                    ----------------------------
            Net cash provided by financing activities                                      6,903          2,828
                                                                                    ----------------------------

Increase (decrease) in cash and cash equivalents                                          (4,038)         1,811

Cash and cash equivalents at beginning of period                                           5,574          1,410
                                                                                    ----------------------------

Cash and cash equivalents at end of period                                          $      1,536   $      3,221
                                                                                    ============================
</TABLE>

Non-cash investing and financing activities:

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).

In the quarter ended March 31, 2003, the Company settled a note payable totaling
$1,121  in  exchange  for  the  aircraft  securing  the  debt.





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  10Q  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,  2003.

     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 aircraft overhaul
     costs.  Actual  results  could  differ  from  those  estimates.

     The  Company  operates  under  an  FAA-approved  continuous  inspection and
     maintenance program. The Company accounts for maintenance activities on the
     direct  expense  method. Under this method, commencing January 1, 2004, all
     maintenance costs are recognized as expense as costs are incurred. Prior to
     January  1,  2004,  the  Company  accrued  for  major  engine  and airframe
     component  overhaul costs based on usage of the aircraft component over the
     period  between  overhauls  or  replacements  in  advance of performing the
     maintenance  services.  (See  Note  2).

     Certain  prior  period  amounts  have been reclassified to conform with the
     2004  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).


                                        7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3)  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>
                                                                        2004       2003
                                                                     ----------  ---------
<S>                                                                  <C>         <C>
     Weighted average number of common shares outstanding - basic    10,832,455  9,521,884
     Dilutive effect of:
        Common stock options                                            115,452     69,457
        Common stock warrants                                           310,976    272,870
                                                                     ---------------------
     Weighted average number of common shares outstanding - diluted  11,258,883  9,864,211
                                                                     =====================
</TABLE>

     Common  stock  options  totaling  640,000  were not included in the diluted
     shares  outstanding  for  the  quarter  ended March 31, 2004, because their
     effect would have been anti-dilutive. Common stock options totaling 265,000
     and  common stock warrants totaling 25,000 were not included in the diluted
     shares  outstanding  for  the  quarter  ended March 31, 2003, because their
     effect  would  have  been  anti-dilutive.

(4)  STOCKHOLDERS'  EQUITY
     ---------------------

     Changes  in stockholders' equity for the three months ended March 31, 2004,
     consisted  of  the  following  (amounts in thousands except share amounts):

<TABLE>
<CAPTION>
                                                           Shares
                                                         Outstanding    Amount
                                                         ----------------------
<S>                                                      <C>           <C>
        Balances at January 1, 2004                       10,817,594   $60,688

        Issuance of common shares for options exercised       67,373       462
        Purchase of treasury shares                          (45,624)     (416)
        Net income                                                --     8,051
                                                         ----------------------

        Balances at March 31, 2004                        10,839,343   $68,785
                                                         ======================
</TABLE>


                                        8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(5)  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  (amounts  in
     thousands,  except  per  share  amounts):

<TABLE>
<CAPTION>
                                                               2004     2003
                                                              -------  ------
<S>                                                           <C>      <C>
          Net loss before cumulative effect of change in
            accounting principle:
               As reported                                    $ (544)  $(516)
               Pro forma                                        (616)   (564)

          Net income (loss):
               As reported                                    $8,051   $(516)
               Pro forma                                       7,979    (564)

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

          Basic and diluted net income (loss) per share:
               As reported                                    $  .74   $(.05)
               Pro forma                                         .74    (.05)
</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  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  2003.


                                        9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6)  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 15
          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  throughout the U.S. 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.

<TABLE>
<CAPTION>
                                                                             Products    Corporate    Intersegment
FOR QUARTER ENDED MARCH 31:                           CBM         HBM        Division    Activities   Eliminations   Consolidated
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>         <C>         <C>           <C>          <C>            <C>
     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                               27,173      18,206          2,483       1,931         (1,767)        48,026
     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
     Interest income                                      --          --             --          (4)            --             (4)
     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
                                                   ===============================================================================

     2003
     External revenue                              $  31,370      21,035          1,335         214             --         53,954
     Intersegment revenue                                 --          --          1,117          --         (1,117)            --
                                                   -------------------------------------------------------------------------------
     Total revenue                                    31,370      21,035          2,452         214         (1,117)        53,954
                                                   -------------------------------------------------------------------------------

     Operating expenses                               20,756      18,032          2,080       2,177           (982)        42,063
     Depreciation & amortization                       1,115       1,155             45         433             --          2,748
     Bad debt expense                                  7,986          --             --          --             --          7,986
     Interest expense                                    991         911             --         104             --          2,006
     Interest income                                      (1)         (2)            --          --             --             (3)
     Income tax benefit                                   --          --             --        (330)            --           (330)
                                                   -------------------------------------------------------------------------------
     Segment net income (loss)                     $     523         939            327      (2,170)          (135)          (516)
                                                   ===============================================================================

     Total assets                                  $  62,214         N/A            N/A     136,354         (2,164)       196,404
                                                   ===============================================================================
</TABLE>


                                       10
<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;  flight  volume  of  CBM  operations;
collection  rates  for  patient  transports;  continuation and/or renewal of HBM
contracts;  acquisition  of  new and profitable Products Division contracts; 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 2004 the CBM Division generated 63% of
     the  Company's  total  revenue, increasing from 58% in the first quarter of
     2003.
-    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 (65% of total contract revenue) and
     hourly  flight  fees  (35%  of  total  contract revenue) billed to hospital
     customers.  In  the first quarter of 2004 the HBM Division generated 34% of
     the  Company's  total  revenue,  decreasing  from  39%  in  2003.
-    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 2004 the Products
     Division generated 3% of the Company's total revenue, increasing from 2% in
     2003.

See  Note  6 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, 64% 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  7,000  for the first
     quarter  of  2004  compared to approximately 5,100 for the first quarter of
     2003. Patient transports for CBM bases open longer than one year (Same-Base
     Transports)  were approximately 5,300 in the first quarter of 2004 compared
     to approximately 4,500 in the first three months of 2003.


                                       11
<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. Effective
     January  1,  2004, the Company instituted a price increase of approximately
     5%  for its CBM operations. However, net revenue after bad debt expense per
     transport decreased 8.8% in the first quarter of 2004 compared to the first
     quarter  of  2003.  The total allowance for expected uncollectible amounts,
     including  contractual  discounts  for  Medicare/Medicaid  and  bad  debts,
     increased  from 41.6% of related gross flight revenue for the quarter ended
     March 31, 2003, to 49.6% in the first quarter of 2004. The Company believes
     the  decrease  in  collection  rate is driven primarily by overall economic
     conditions. Staffing within the billing and collections department also has
     a  direct  impact on the pace of collections, and timeliness of collections
     may  have an impact on the ultimate collectibility of receivables. In 2004,
     the  Company  increased staffing in the billing and collections department,
     segmented  billing  by  region,  and  hired  a national billing director to
     address  recent  slowdowns  in  collections.

-    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 aircraft within the Company's fleet,
     representing  28%  of the total 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  23.2% in the first quarter of 2004 compared to 2003,
     while  total  flight volume for CBM and HBM operations increased 14.8% 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.

-    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 past 12 months, the CBM division
     commenced  operations  at  two  new  locations  which  had  previously been
     hospital-based  flight  programs with either the Company or another vendor.
     At  the  expiration  of  contracts  in the fourth quarter of 2003 and first
     quarter  of  2004,  two of the Company's HBM customers also converted their
     flight  programs  to  the  community-based  model with services provided by
     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 the aviation
     and  medical  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.


                                       12
<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  began  in early 2004. 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 net income of $8,051,000 for the three months ended March
31,  2004,  compared  to  a net loss of $516,000 for the quarter ended March 31,
2003. 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 below.
Before  the cumulative effect of the change in accounting principle, the Company
reported a net loss of $544,000. Although the Company experienced a 16% increase
in  Same-Base  Transports  for its CBM bases during the first quarter of 2004 as
compared  to  the  first  quarter  of  2003,  net  reimbursement  (revenue after
Medicare/Medicaid  discounts  and  bad debt expense) decreased 8.8%. The Company
also had higher aircraft maintenance costs in 2004 compared to 2003.

CHANGE IN ACCOUNTING METHOD

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.  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).

Pro  forma results, assuming the change in accounting principle had been applied
retroactively, are as follows for the quarter ended March 31, 2003:

<TABLE>
<CAPTION>
                                                  As Reported   Pro Forma
                                                 -------------  ---------
<S>                                              <C>            <C>

     Aircraft operations expense                 $     13,184      11,396
                                                 ========================
     Depreciation and amortization               $      2,748       2,370
                                                 ========================

     Net income (loss)                           $       (516)        805
                                                 ========================

     Basic and diluted income (loss) per share   $       (.05)        .08
                                                 ========================
</TABLE>


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

FLIGHT  REVENUE  increased $7,201,000, or 13.7%, from $52,376,000 to $59,577,000
for  the  three months ended March 31, 2004, compared to 2003. 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 $7,658,000, or 24.4%, to $39,012,000 in the
     three  months  ended  March  31,  2004, compared to 2003, for the following
     reasons:
     -    Revenue  of  $5,356,000  from  the addition of 13 new CBM bases either
          during  or  subsequent  to  the  first  quarter  of  2003.
     -    Purchase  of  certain business assets from another air medical service
          provider  in  southeastern  Arizona  in  May  2003,  resulting  in the
          expansion of operations from three bases to five. Transport volume for
          all bases in the region increased 95.5% in the quarter ended March 31,
          2004,  compared  to  2003,  resulting  in  incremental  revenue  of
          approximately  $1,703,000.


                                       13
<PAGE>
     -    Closure  of  one base in the fourth quarter of 2003 and another in the
          first  quarter  of  2004,  resulting  in  a  decrease  in  revenue  of
          approximately  $708,000.
     -    Increase  in  flight  volume  for  bases  open  longer  than one year.
          Excluding  the  impact  of  the  new bases and base closures discussed
          above,  total  flight volume for all CBM operations increased 16.0% in
          the  first quarter of 2004 compared to the prior year. The increase in
          flight  volume  is primarily attributed to improved weather conditions
          and  an  increase  in flight requests, driven in part by enhanced crew
          outreach  and  other  marketing  initiatives in 2004 compared to 2003.
     -    Average  price  increase  of  approximately  5% for all CBM operations
          effective  January  1,  2004.
-    HBM  -  Flight  revenue decreased $457,000, or 2.2%, to $20,565,000 for the
     quarter  ended  March  31,  2004,  for  the  following  reasons:
     -    Discontinuation  of  service  under three contracts either prior to or
          during  the  first  quarter  of  2004.  In addition, during the fourth
          quarter  of  2003,  one  HBM customer converted to CBM operations. The
          resulting  decrease  in  revenue  from  all  of  these  actions  was
          approximately  $1,371,000.
     -    Revenue of approximately $139,000 generated by the addition of one new
          contract  during  the  first  quarter  of  2004.
     -    Annual  price  increases in the majority of contracts based on changes
          in  the  Consumer  Price  Index  and  in  hull  insurance  rates.
     -    Increase  of  6.5%  in  flight  volume for all contracts excluding the
          discontinued  contracts  and  the  new  contract  discussed  above.

FLIGHT  CENTER COSTS (consisting primarily of pilot, mechanic, and medical staff
salaries  and  benefits)  increased $3,935,000, or 19.4%, to $24,246,000 for the
quarter  ended March 31, 2004, compared to 2003. Changes by business segment are
as  follows:
-    CBM  -  Flight  center costs increased $3,791,000, or 31.6%, to $15,787,000
     for  the  following  reasons:
     -    Approximately  $2,977,000  for  the addition of personnel to staff new
          base  locations  described  above.
     -    Decrease  of  approximately  $261,000  due  to  the  closure  of  base
          locations  described  above.
     -    Increases  in  salaries  for  merit  pay  raises.
     -    Increases  in  the  cost of medical and workers compensation insurance
          premiums  paid  by  the  Company.
     -    Increase of approximately $200,000 for monthly service fees associated
          with  an  updated  flight  tracking  system.
-    HBM  -  Flight  center  costs  increased  $143,000,  or 1.7%, to $8,458,000
     primarily  due  to  the  following:
     -    Decrease  of  approximately  $498,000  due  to  the  closure  of  base
          locations  described  above.
     -    Approximately  $32,000 for the addition of personnel to staff new base
          locations  described  above.
     -    Increases  in  salaries  for  merit  pay  raises.
     -    Increases  in  the  cost of medical and workers compensation insurance
          premiums  paid  by  the  Company.

AIRCRAFT  OPERATING  EXPENSES increased $537,000, or 4.1%, for the quarter ended
March  31,  2004,  in  comparison  to the quarter ended March 31, 2003. On a pro
forma  basis,  assuming the change in accounting principle for maintenance costs
had been applied retroactively, aircraft operating expenses would have increased
$2,325,000, or 20.4%, in the first quarter of 2004 compared to the first quarter
of  2003.  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  11  helicopters  for CBM operations and 7 helicopters for HBM
     operations  since March 31, 2003, resulting in an increase of approximately
     $462,000  in  aircraft  operating  expenses.
-    Increase  in  maintenance  costs for engine overhauls and aircraft interior
     refurbishment.  Refurbishment was required due to the age of the interiors.
-    Increase  in  the  cost  of  aircraft  fuel.
-    Decrease  of approximately 15% in hull insurance rates effective July 2003.

AIRCRAFT  RENTAL  EXPENSE increased $529,000, or 18.9%, for the first quarter of
2004  compared  to  the  first  quarter  of  2003.  Rental expense for 14 leased
aircraft  added to the Company's fleet since March 31, 2003, totaled $510,000 in
the  three  months  ended  March  31,  2004.


                                       14
<PAGE>
BAD DEBT EXPENSE increased $1,754,000, or 22.0%, for the quarter ended March 31,
2004,  compared  to  2003,  due  primarily to the increase in related CBM flight
revenue. Bad debt expense as a percentage of related net flight revenue remained
constant  at  25.0%  in  the  first quarters of 2004 and 2003. Flight revenue is
recorded  net  of  Medicare/Medicaid discounts. The total allowance for expected
uncollectible  amounts, including contractual discounts and bad debts, increased
from 41.6% of related gross flight revenue for the quarter ended March 31, 2003,
to  49.6%  in  the  first  quarter of 2004. The Company believes the decrease in
collection  rates is due to general recessionary trends in the economy. Bad debt
expense  related  to HBM operations and Products Division was not significant in
either  2004  or  2003.


MEDICAL  INTERIORS  AND  PRODUCTS

SALES  OF  MEDICAL  INTERIORS  AND  PRODUCTS  increased $690,000, or 51.7%, from
$1,335,000  for  the  three  months  ended March 31, 2003, to $2,025,000 for the
first  quarter  of  2004.  Significant  projects  in  the  first quarter of 2004
included  ongoing  production of eleven Multi-Mission Medevac Systems for the U.
S. Army's HH-60L Black Hawk helicopter and 21 litter systems for the U.S. Army's
Medical  Evacuation  Vehicle  (MEV).  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

Significant  projects  in  the  first  quarter  of  2003 included manufacture of
modular  medical  interiors  for  three commercial customers. Revenue by product
line  was  as  follows:
-    $1,172,000 - manufacture and installation of modular medical interiors
-    $163,000  - design and manufacture of other aerospace and medical transport
     products

COST  OF  MEDICAL  INTERIORS  AND PRODUCTS decreased $486,000, or 43.2%, for the
three months ended March 31, 2004, as compared to the previous year. The average
net  margin earned on projects during the first quarter of 2004 was 49% compared
to 22% in 2003, primarily due to the change in product mix. The margin earned on
multi-mission  interiors  is typically higher than the margins earned on modular
medical  interiors  for  commercial  customers.  In addition, aircraft interiors
completed for commercial customers during 2003 were for new types of aircraft in
which  the Company had not previously installed its modular interior, leading to
higher  engineering  and  documentation  costs and lower profit margins. 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 decreased $71,000, or 2.6% for the three
months  ended  March  31,  2004, compared to 2003. The decrease is primarily the
result  of  the change in the method of accounting for major engine and airframe
component  overhauls and replacements, as discussed more fully above. As part of
the change in method, the Company reversed the remaining capitalized maintenance
included  in  fixed  assets  relating to used aircraft purchases, resulting in a
decrease of approximately $378,000 in depreciation expense for the first quarter
of  2004.  The  decrease  was offset in part by depreciation on engine upgrades,
rotable  equipment,  and  computer  hardware and software acquired subsequent to
March  31,  2003.

GENERAL  AND  ADMINISTRATIVE  EXPENSES  increased  $1,618,000, or 34.4%, for the
quarter  ended  March  31,  2004,  compared to the quarter ended March 31, 2003,
reflecting  the  growth  in the Company's operations. General and administrative
expenses  include  accounting  and  finance,  billing  and  collections,  human
resources,  aviation management, pilot training, and CBM program administration.
During  the last half of 2003, the Company formalized the organization structure
for  its  CBM division along regional and program lines and added administrative
personnel  to  manage  the  daily  operations  of  CBM  bases.  The Company also
increased  the  number of billing and collections department personnel by 33% in
the  first  quarter of 2004, compared to the first quarter of 2003, to keep pace
with  the  growth  in  CBM  operations  and  to  address  recent  slowdowns  in
collections.  These  increases  were  offset  in  part by a decrease in aviation


                                       15
<PAGE>
management  costs  resulting  from  the  consolidation of FAA Part 135 operating
certificates  from  4 certificates at the beginning of 2003 to 2 certificates by
the  beginning  of  2004.

INTEREST  EXPENSE  increased  $81,000,  or  4.0%,  in the first quarter of 2004,
compared  to  the  first  quarter  of  2003,  primarily  as  a  result increased
borrowings  against  the Company's line of credit. The balance drawn against the
line  of credit was $23,370,000 as of March 31, 2004, compared to $14,594,000 at
March  31,  2003.  This  increase was partially offset by decreases in principal
balances  as  a  result  of  regularly scheduled payments and the refinancing of
$17.5  million  of  debt  at  lower  interest  rates  since  March  31,  2003.

The  Company  recorded a DEFERRED INCOME TAX BENEFIT of $348,000 and $330,000 in
the  first  quarter of 2004 and 2003, respectively, both at an effective rate of
39%.

LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital of $53,356,000 as of March 31, 2004, compared to
$43,682,000  at  December  31,  2003.  The change in working capital position is
primarily  attributable  to  the  following:
-    Increase of $7,892,000 in receivables consistent with the increased revenue
     for  the  CBM  division resulting from new base expansions and increases in
     flight volume. In addition, receivables related to CBM operations increased
     as  a  result  of  a  slowdown  in  collections. The Company attributes the
     slowdown  primarily  to  the  impact  of  understaffing  in the billing and
     collections  department  and  general  economic  factors.

-    Decrease of $7,702,000 in short-term accrued overhaul and parts replacement
     costs  liabilities, due to the change in the method of accounting for major
     engine  and  airframe  component  overhaul costs from the accrual method of
     accounting  to  the  direct  expense method. Effective January 1, 2004, the
     Company  reversed  its  major  overhaul  accrual  for  all owned and leased
     aircraft.

SOURCES  AND  USES  OF  CASH

The  Company  had  cash and cash equivalents of $1,536,000 as of March 31, 2004,
compared  to  $5,574,000  at  December  31, 2003. Cash used by operations in the
first quarter of 2004 totaled $6,584,000 compared to $361,000 in 2003, primarily
due  to  the  increase in receivables, net of bad debt expense, described above.

Cash  used  by  investing  activities  totaled  $4,357,000  in  2004 compared to
$656,000  in 2003. Equipment acquisitions in the first quarter of 2004 consisted
primarily  of  medical  interior and avionics installations, information systems
hardware  and  software,  and rotable equipment. Capital lease financing for the
hardware and software acquisitions is expected to be finalized during the second
quarter  of  2004. Equipment acquisitions in the first quarter of 2003 consisted
primarily  of  medical  interior  and  avionics  installations  or  upgrades for
existing  equipment. In the first quarter of 2003, the Company received $116,000
in  full  payment  of  a  note  receivable.

Financing  activities  generated  $6,903,000  in  2004 compared to $2,828,000 in
2003.  The  Company used proceeds from new note agreements originated in 2004 to
refinance  existing  debt with higher interest rates and to fund the acquisition
of  new  software  systems  projected  for implementation later in the year. The
primary  use  of  cash in both 2004 and 2003 was regularly scheduled payments of
long-term debt and capital lease obligations. These payments were offset in both
2004  and  2003  by draws against the Company's line of credit and proceeds from
new  note  agreements.

In  January  2004  the  Company  originated  a  note  payable of $1,039,000 with
interest  at 5.08% to refinance existing debt with a higher interest rate and to
fund  the  acquisition of computer hardware and software for systems integration
scheduled  for 2004; the note is payable through January 2010. In March 2004 the
Company  originated  a  note  payable  of  $7,492,000  with interest at 5.60% to
refinance existing debt with a higher interest rate; the note is payable through
April  2010.


                                       16
<PAGE>
OUTLOOK  FOR  2004

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

The  Company  opened  CBM operations at new locations in Michigan, Virginia, and
Missouri  and  closed  one location in Florida during the first quarter of 2004.
The  location  in Florida was closed due to low flight volume and low collection
rates.  The Company expects to open an additional location in the Midwest during
the second quarter of 2004. CBM flight volume at all other locations is expected
to  be  consistent  during  2004  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

The  Company  discontinued service under one contract in New Mexico in the first
quarter  of  2004. In March 2004, the Company began operations under a five-year
contract  with  a  new  customer in Florida. Four hospital contracts are due for
renewal  in  2004.  The  Company  expects  2004  flight  activity for continuing
hospital  contracts  to  remain  consistent  with  historical  levels.

Products  Division

As  of  March  31,  2004, the Company was continuing the production of 11 HH-60L
units  and  21  MEV units for the U.S. Army, with delivery scheduled through the
third  quarter  of 2004. In the first quarter of 2004, the Company was awarded a
contract  to  manufacture  and  install  a  multi-mission interior in a Sikorsky
FIREHAWK  helicopter  for  the Los Angeles County Fire Department; work began in
the second quarter of 2004 and is expected to be completed in the second quarter
of 2005. Remaining revenue for all contracts in process as of March 31, 2004, is
estimated  at  $3.7  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 15 HH-60L units under the program, in addition
to  the  11  currently  under  contract, and expects to receive a contract for 4
additional  units in 2004. The U.S. Army has also forecasted a requirement for a
total  of  118  MEV  units over 4 years; the Company has previously delivered 42
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

In  2004  the  Company  expects  to  implement  new  software  for several major
information  technology  systems  and  to  upgrade the associated hardware for a
total  cost  of approximately $4.5 million. The majority of the cost 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 2004. The Company also had approximately $15,458,000
in  borrowing capacity available under its revolving credit facility as of March
31,  2004.


                                       17
<PAGE>
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 2004" and
those  described  below.

-    Highly  leveraged  balance  sheet  -  The  Company  is obligated under debt
     facilities  providing  for  up  to  approximately  $104.4  million  of
     indebtedness, of which approximately $92.8 million was outstanding at March
     31, 2004. 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 the Company will be able
     to  obtain  such  waivers  without  payment  of  significant cash or equity
     compensation  to  the  lenders.

-    Flight  volume  -  All  CBM revenue and approximately 35% of HBM revenue is
     dependent  upon  flight  volume.  Approximately  30% of the Company's total
     operating  expenses  also  vary  with  the  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.

-    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  began  in early 2004. 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  hospital  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.


                                       18
<PAGE>
-    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.

-    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  37%  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 publicity and interruption of air medical services
     to  client  hospitals,  which  could  adversely  affect  the  Company's
     relationship  with  such  hospitals  and  operating  results.

-    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 May 14, 2004, the Company
     was  aware of one foreign person who, according to recent public securities
     filings,  is  believed  to  hold  approximately  5.5% 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.

-    Acquisitions  and integration - The Company has grown significantly through
     acquisitions  in  the  past and will continue to pursue acquisitions in the
     future.  With  any  large  acquisition, a significant effort is required to
     assimilate  the  operations,  financial  and  accounting practices, and MIS
     systems,  and  to  integrate  key  personnel  from  the  acquired business.
     Acquisitions  may  cause  disruptions  in  Company  operations  and  divert
     management's  attention  from  day-to-day  operations.  The Company may not
     realize  the  anticipated  benefits  of  past  or  future  acquisitions,
     profitability  may suffer due to acquisition-related costs or unanticipated
     liabilities,  and  the  Company's stock price may decrease if the financial
     markets  consider  the  acquisitions  to  be  inappropriately  priced.

-    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.


                                       19
<PAGE>
-    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  are generally 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.

-    Competition  -  HBM  operations  face  significant competition from several
     national  and  regional  air medical transportation providers for contracts
     with  hospitals and other healthcare institutions. 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
     medical  capability  of  the aircraft offered. The Company's competition in
     the  aircraft  interior  design  and manufacturing industry comes primarily
     from  two  companies  based  in  the  United  States  and  one  in  Europe.
     Competition  is  based  mainly on product features, performance, price, 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.

-    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.


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.

On  an  on-going  basis,  management  evaluates  its  estimates  and  judgments,
including  those  related  to  revenue  recognition,  uncollectible receivables,
deferred  income  taxes,  aircraft overhaul costs, 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.


                                       20
<PAGE>
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, 2004, a change of 1% in the percentage
of  estimated  contractual  discounts  would  have  resulted  in  a  change  of
approximately  $580,000  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,
2004, a change of 1% in the percentage of estimated uncollectible accounts would
have resulted in a change of approximately $390,000 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.

Aircraft  Overhaul  Costs

The Company operates under an FAA-approved continuous inspection and maintenance
program.  The  Company accounts for maintenance activities on the direct expense
method. Under this method, commencing January 1, 2004, all maintenance costs are
recognized  as  expense  as  costs  are  incurred. Prior to January 1, 2004, the
Company  accrued for major engine and airframe component overhaul costs based on
usage  of  the  aircraft  component  over  the  period  between  overhauls  or
replacements in advance of performing the maintenance services.


                                       21
<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. All of the
Company's product sales and related receivables are payable in U.S. dollars. The
Company  is  subject  to  interest  rate  risk on its debt obligations and notes
receivable,  most  of  which  have  fixed  interest  rates,  except  $23,348,000
outstanding against the line of credit and $2,276,000 in notes payable. Based on
the  amounts  outstanding at March 31, 2004, the annual impact of a 1% change in
interest  rates  would  be  approximately  $256,000.  Interest  rates  on  these
instruments  approximate current market rates as of March 31, 2004. Periodically
the  Company  enters  into interest rate risk hedges to minimize exposure to the
effect  of  an  increase  in  interest  rates.

ITEM 4.  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  evaluated,  with  the  participation  of  the
Certifying  Officers, the effectiveness of disclosure controls and procedures as
of  March  31, 2004, pursuant to Rule 13a-15(b) under the Exchange Act. Based on
that  evaluation,  the  Certifying Officers have concluded that, as of March 31,
2004, the Company's disclosure controls and procedures were effective.

There  were  no  significant  changes  in  the  Company's internal controls 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.

In  2004,  the  Company  expects  to  upgrade  its hardware and software systems
relating  to  finance  and  accounting,  inventory, purchasing, and dispatch and
communications and is monitoring the progress of the upgrades.


                                       22
<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 AND REPORTS ON FORM 8-K

                    (a)  Exhibits

                         18.1 Letter  from  KPMG  LLP  regarding  Change  in
                              Accounting  Principle

                         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

                    (b)  Reports on Form 8-K

                         None


                                       23
<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 17, 2004                        By  \s\  Aaron D. Todd
                                            -----------------------------------
                                             Aaron D. Todd
                                             Chief Executive Officer
                                             (Principal Executive Officer)


Date: May 17, 2004                        By  \s\  Trent J. Carman
                                            -----------------------------------
                                             Trent J. Carman
                                             Chief Financial Officer
                                             (Principal Financial Officer)


Date: May 17, 2004                        By  \s\  Sharon J. Keck
                                            -----------------------------------
                                             Sharon J. Keck
                                             Chief Accounting Officer
                                             (Principal Accounting Officer)


                                       24
<PAGE>