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

                                    FORM 10-Q


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

For  the  quarterly  period  ended               June  30,  2005
                                    --------------------------------------------

                                       OR

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

For  the  transition  period  from  ________________    to    ________________


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


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


           Delaware                                             84-0915893
           --------                                             ----------
(State or Other Jurisdiction of                               (IRS Employer
 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
                                                           --------------


     Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                  Report:  N/A


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

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

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


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

<S>                                                                                          <C>
PART I.    FINANCIAL INFORMATION

           Item 1.    Consolidated Unaudited Financial Statements

                      Consolidated Balance Sheets - June 30, 2005 and December 31, 2004        1

                      Consolidated Statements of Operations for the three and six
                        months ended June 30, 2005 and 2004                                    3

                      Consolidated Statements of Cash Flows for the six months ended
                        June 30, 2005 and 2004                                                 5

                      Notes to Unaudited Consolidated Financial Statements                     7

           Item 2.    Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                                 13

           Item 3.      Quantitative and Qualitative Disclosures about Market Risk            24

           Item 4.      Controls and Procedures                                               24


PART II.   OTHER INFORMATION

           Item 1.    Legal Proceedings                                                       25

           Item 2.    Changes in Securities                                                   25

           Item 3.    Defaults upon Senior Securities                                         25

           Item 4.    Submission of Matters to a Vote of Security Holders                     25

           Item 5.    Other Information                                                       25

           Item 6.    Exhibits                                                                25

SIGNATURES                                                                                    26
</TABLE>


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

                                   ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                                   AIR METHODS CORPORATION AND SUBSIDIARIES

                                          CONSOLIDATED BALANCE SHEETS
                                 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
                                                  (UNAUDITED)


                                                                                    JUNE 30,     DECEMBER 31,
                                                                                      2005           2004
                                                                                 -----------------------------
<S>                                                                              <C>             <C>
Assets
------

Current assets:
    Cash and cash equivalents                                                    $       7,840          2,603
    Current installments of notes receivable                                                63             61
    Receivables:
        Trade                                                                          101,005         89,218
        Less allowance for doubtful accounts                                           (29,898)       (26,040)
                                                                                 -----------------------------
                                                                                        71,107         63,178
        Other                                                                            2,373          4,520
                                                                                 -----------------------------

            Total receivables                                                           73,480         67,698
                                                                                 -----------------------------

    Inventories                                                                          9,077          8,667
    Work-in-process on medical interiors and products contracts                            798            645
    Assets held for sale                                                                    --          5,705
    Costs and estimated earnings in excess of billings on
        uncompleted contracts                                                            1,186          2,938
    Prepaid expenses and other                                                           2,598          2,686
                                                                                 -----------------------------

            Total current assets                                                        95,042         91,003
                                                                                 -----------------------------

Equipment and leasehold improvements:
    Land                                                                                   190            190
    Flight and ground support equipment                                                140,375        137,742
    Furniture and office equipment                                                      11,902         11,805
                                                                                 -----------------------------
                                                                                       152,467        149,737
    Less accumulated depreciation and amortization                                     (57,926)       (52,985)
                                                                                 -----------------------------

            Net equipment and leasehold improvements                                    94,541         96,752
                                                                                 -----------------------------

Goodwill                                                                                 6,485          6,485
Notes receivable, less current installments                                                165            572
Other assets, net of accumulated amortization of $2,354 and
    $2,108 at June 30, 2005 and December 31, 2004, respectively                          9,114          9,911
                                                                                 -----------------------------

            Total assets                                                         $     205,347        204,723
                                                                                 =============================
</TABLE>

                                                                     (Continued)


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

                          CONSOLIDATED BALANCE SHEETS, CONTINUED
                (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                       (UNAUDITED)


                                                                JUNE 30,     DECEMBER 31,
                                                                  2005           2004
                                                              ---------------------------
<S>                                                           <C>            <C>
Liabilities and Stockholders' Equity
------------------------------------

Current liabilities:
    Notes payable                                             $          --         5,105
    Current installments of long-term debt                            9,564         6,041
    Current installments of obligations under capital leases            238           410
    Accounts payable                                                  7,097         7,193
    Deferred revenue                                                  3,807         3,883
    Billings in excess of costs and estimated earnings on
        uncompleted contracts                                           537           309
    Accrued wages and compensated absences                            8,438         3,668
    Deferred income taxes                                             1,907         4,387
    Due to third party payers                                         1,734         2,867
    Other accrued liabilities                                         5,090         8,291
                                                              ---------------------------

            Total current liabilities                                38,412        42,154

Long-term debt, less current installments                            69,442        72,693
Obligations under capital leases, less current installments             195           249
Deferred income taxes                                                12,640         8,284
Other liabilities                                                     8,557         8,264
                                                              ---------------------------

            Total liabilities                                       129,246       131,644
                                                              ---------------------------

Stockholders' equity (note 5):
    Preferred stock, $1 par value.  Authorized 5,000,000
        shares, none issued                                              --            --
    Common stock, $.06 par value. Authorized 16,000,000
        shares; issued 11,030,388 and 10,997,380 shares at
        June 30, 2005 and December 31, 2004, respectively               662           660
    Additional paid-in capital                                       65,119        64,955
    Retained earnings                                                10,320         7,464
    Treasury stock at par, 4,040 common shares at December
        31, 2004                                                         --            --
                                                              ---------------------------

            Total stockholders' equity                               76,101        73,079
                                                              ---------------------------

            Total liabilities and stockholders' equity        $     205,347       204,723
                                                              ===========================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


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

                                   CONSOLIDATED STATEMENTS OF OPERATIONS
                         (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                (UNAUDITED)


                                                              THREE MONTHS ENDED        SIX MONTHS ENDED
                                                                    JUNE 30,                JUNE 30,
                                                            -----------------------------------------------
                                                               2005         2004        2005        2004
                                                            -----------------------------------------------
<S>                                                         <C>          <C>         <C>         <C>
Revenue:
    Flight revenue                                          $   85,865      72,861     152,823     132,438
    Sales of medical interiors and products                      1,800       1,360       3,324       3,385
    Parts and maintenance sales and services                        20          34          46          66
                                                            -----------------------------------------------
                                                                87,685      74,255     156,193     135,889
                                                            -----------------------------------------------
Operating expenses:
    Flight centers                                              26,531      23,117      52,277      46,163
    Aircraft operations                                         16,809      14,886      31,738      28,607
    Aircraft rental                                              4,482       3,532       8,762       6,862
    Medical interiors and products sold                          1,153         539       1,996       1,177
    Cost of parts and maintenance sales and services                18          37          65          84
    Depreciation and amortization                                2,971       2,734       5,868       5,411
    Bad debt expense                                            16,236      15,481      26,347      25,221
    Loss on disposition of assets, net                             274          22         381          26
    General and administrative                                   9,065       7,991      17,828      15,513
                                                            -----------------------------------------------
                                                                77,539      68,339     145,262     129,064
                                                            -----------------------------------------------

                Operating income                                10,146       5,916      10,931       6,825

Other income (expense):
    Interest expense                                            (1,525)     (2,033)     (3,418)     (4,120)
    Loss on early extinguishment of debt (note 3)               (3,104)         --      (3,104)         --
    Other, net                                                     (40)        277         333         563
                                                            -----------------------------------------------

Income before income tax expense and cumulative effect of
  change in accounting principle                                 5,477       4,160       4,742       3,268

Income tax expense                                              (2,153)     (1,642)     (1,886)     (1,294)
                                                            -----------------------------------------------

Income before cumulative effect of change in accounting
  principle                                                      3,324       2,518       2,856       1,974

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

                Net income                                  $    3,324       2,518       2,856      10,569
                                                            ===============================================
</TABLE>

                                                                     (Continued)


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

                              CONSOLIDATED STATEMENTS OF OPERATIONS, CONTINUED
                         (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                 (UNAUDITED)


                                                                THREE MONTHS ENDED       SIX MONTHS ENDED
                                                                    JUNE 30,                 JUNE 30,
                                                             -----------------------------------------------
                                                                2005         2004        2005        2004
                                                             -----------------------------------------------
<S>                                                          <C>          <C>         <C>         <C>
Basic income per common share (note 4):
    Income before cumulative effect of change in accounting
        principle                                            $       .30         .23         .26         .18
    Cumulative effect of change in method of accounting for
        maintenance costs, net of income taxes                        --          --          --         .79
                                                             -----------------------------------------------
    Net income                                               $       .30         .23         .26         .97
                                                             ===============================================

Diluted income per common share (note 4):
    Income before cumulative effect of change in accounting
        principle                                            $       .29         .22         .25         .18
    Cumulative effect of change in method of accounting for
        maintenance costs, net of income taxes                        --          --          --         .76
                                                             -----------------------------------------------
    Net income                                               $       .29         .22         .25         .94
                                                             ===============================================

Weighted average number of common shares outstanding -
basic                                                         11,029,421  10,867,002  11,013,912  10,849,728
                                                             ===============================================

Weighted average number of common shares outstanding -
diluted                                                       11,519,944  11,264,313  11,511,675  11,260,892
                                                             ===============================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


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

                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (AMOUNTS IN THOUSANDS)
                                                 (UNAUDITED)

                                                                                   SIX MONTHS ENDED JUNE 30,
                                                                                   --------------------------
                                                                                       2005         2004
                                                                                   --------------------------
<S>                                                                                <C>           <C>
Cash flows from operating activities:
    Net income                                                                     $     2,856        10,569
    Adjustments to reconcile net income to net cash provided by operating
      activities:
      Depreciation and amortization expense                                              5,868         5,411
      Bad debt expense                                                                  26,347        25,221
      Deferred income tax expense                                                        1,876         1,303
      Loss on retirement and sale of equipment, net                                        381            26
      Loss on early extinguishment of debt                                               3,104            --
      Cumulative effect of change in method of accounting for maintenance                   --        (8,595)
      Changes in assets and liabilities:
          Decrease (increase) in prepaid expenses and other current assets                 139          (356)
          Increase in receivables                                                      (32,129)      (28,875)
          Decrease (increase) in parts inventories                                        (410)          262
          Decrease in work-in-process on medical interiors and costs in excess of
              billings                                                                   1,599           388
          Increase (decrease) in accounts payable, other accrued liabilities, and
              other liabilities                                                            633        (1,280)
          Increase in deferred revenue and billings in excess of costs                     152         2,252
                                                                                   --------------------------
                Net cash provided by operating activities                               10,416         6,326
                                                                                   --------------------------

Cash flows from investing activities:
    Acquisition of equipment and leasehold improvements                                 (3,664)       (7,208)
    Proceeds from disposition and sale of equipment and assets held for sale             1,070         1,217
    Decrease (increase) in notes receivable and other assets                               298          (698)
                                                                                   --------------------------
                Net cash used by investing activities                                   (2,296)       (6,689)
                                                                                   --------------------------
</TABLE>

                                                                     (Continued)


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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                                   (AMOUNTS IN THOUSANDS)
                                        (UNAUDITED)

                                                                  SIX MONTHS ENDED JUNE 30,
                                                                  --------------------------
                                                                      2005         2004
                                                                  --------------------------
<S>                                                               <C>           <C>
Cash flows from financing activities:
    Proceeds from issuance of common stock, net                   $       166           686
    Payments for purchases of common stock                                 --          (420)
    Net borrowings under line of credit                                 5,594         2,492
    Proceeds from issuance of long-term debt                           20,000         8,531
    Payments for debt issue costs                                        (365)          (85)
    Payments of long-term debt                                        (26,591)      (10,742)
    Debt retirement costs                                              (1,380)           --
    Payments of capital lease obligations                                (307)         (375)
                                                                  --------------------------
            Net cash provided (used) by financing activities           (2,883)           87
                                                                  --------------------------

Increase (decrease) in cash and cash equivalents                        5,237          (276)

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

Cash and cash equivalents at end of period                        $     7,840         5,298
                                                                  ==========================
</TABLE>

Non-cash investing and financing activities:

In  the  six  months  ended  June 30, 2005, the Company settled notes payable of
$5,105  in exchange for the aircraft securing the debt. The Company also settled
a  note  payable  totaling  $85  by  applying  a purchase deposit against it and
entered  into  a  note  payable of $396 to finance insurance policies and into a
capital  lease  obligation  of  $81  to  finance  the  purchase  of  equipment.

In  the  six  months  ended  June 30, 2005, the Company wrote off $1,724 in debt
origination  costs  and  note  discount  related  to  the  retirement  of  its
subordinated  debt.

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  six  months  ended  June  30,  2004, the Company settled a note payable
totaling  $424  by  applying  a  purchase  deposit  against  it.

See accompanying notes to unaudited consolidated financial statements.


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

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

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

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

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

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

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

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


                                        7
<PAGE>
AIR METHODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

     On  May  9,  2005,  the  Company  amended and restated its senior revolving
     credit  facility  and  repaid its subordinated debt facility. The amendment
     provided  for,  among other things, $20 million of term loans, an extension
     of  the maturity date to March 31, 2010, and modifications to the financial
     covenants.  The  proceeds  from  the  term  loans,  along  with  additional
     borrowings  under  the  revolving  credit  facility, were used to repay the
     Company's  $23  million  of  subordinated  debt.  The  term  loans  and the
     revolving  loans  bear interest, at the Company's option, at either (i) the
     higher  of the federal funds rate plus 0.50% or the prime rate as announced
     by  the  lenders  plus  an applicable margin ranging from 0.50% to 1.50% or
     (ii)  a rate equal to LIBOR plus an applicable margin ranging from 1.75% to
     3.75%. Principal payments on the term loans will commence in April 2006 and
     total  $4.5  million  in  2006,  $6 million in 2007, $3 million in 2008, $2
     million  in  2009, and $4.5 million in 2010. In the second quarter of 2005,
     the  Company  wrote  off  $1,724,000  in  debt  origination  costs and note
     discount  related to the subordinated debt and paid a prepayment penalty of
     $1,380,000  to  the holders of the subordinated debt. In 2005 the effective
     interest  rate  on  the  subordinated  debt, including amortization of debt
     origination costs and note discount, was 16.2%. Long-term debt consisted of
     the  following  at  June  30,  2005,  and  December  31,  2004  (amounts in
     thousands):

<TABLE>
<CAPTION>
                                                       June 30,    December 31,
                                                        2005           2004
                                                   ----------------------------
<S>                                                <C>            <C>
     Subordinated notes payable, net of discount   $         --         21,860
     New term loans (as described above)                 20,000             --
     Borrowings under revolving credit facility          20,313         14,719
     Other notes payable                                 38,693         42,155
                                                   ----------------------------
                                                         79,006         78,734
     Less current installments                           (9,564)        (6,041)
                                                   ----------------------------
                                                   $     69,442         72,693
                                                   ============================
</TABLE>


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

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

     The  reconciliation  of  basic  to  diluted  weighted average common shares
     outstanding  is  as  follows:

<TABLE>
<CAPTION>
                                                                            2005        2004
                                                                         ----------------------
<S>                                                                      <C>         <C>
     FOR QUARTER ENDED JUNE 30:
         Weighted average number of common shares outstanding - basic    11,029,421  10,867,002
         Dilutive effect of:
             Common stock options                                            26,275      90,238
             Common stock warrants                                          464,248     307,073
                                                                         ----------------------
         Weighted average number of common shares outstanding - diluted  11,519,944  11,264,313
                                                                         ======================

     FOR SIX MONTHS ENDED JUNE 30:
         Weighted average number of common shares outstanding - basic    11,013,912  10,849,728
         Dilutive effect of:
             Common stock options                                            32,269     102,238
             Common stock warrants                                          465,494     308,926
                                                                         ----------------------
         Weighted average number of common shares outstanding - diluted  11,511,675  11,260,892
                                                                         ======================
</TABLE>


                                        8
<PAGE>
AIR METHODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(4)  INCOME PER SHARE, CONTINUED
     ---------------------------

     Common  stock  options  totaling  774,500  were not included in the diluted
     income  per share calculation for the quarter and six months ended June 30,
     2005,  and  common  stock options totaling 640,000 were not included in the
     diluted  income  per share calculation for the quarter and six months ended
     June  30,  2004,  because  their  effect  would  have  been  anti-dilutive.

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

     Changes  in  stockholders'  equity  for the six months ended June 30, 2005,
     consisted  of  the  following  (amounts in thousands except share amounts):

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

          Issuance of common shares for options exercised       37,048      166
          Net income                                                --    2,856
                                                           --------------------

          Balances at June 30, 2005                         11,030,388  $76,101
                                                           ====================
</TABLE>

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

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

<TABLE>
<CAPTION>
                                                                     Three Months Ended            Six Months Ended
                                                                           June 30,                    June 30,
                                                                     2005           2004          2005          2004
                                                                 -------------------------------------------------------
<S>                                                              <C>            <C>           <C>           <C>
               Net income before cumulative effect of change in
                 accounting principle:
                   As reported                                   $       3,324         2,518         2,856         1,974
                   Pro forma                                             3,248         2,446         2,705         1,830

               Net income:
                   As reported                                   $       3,324         2,518         2,856        10,569
                   Pro forma                                             3,248         2,446         2,705        10,425

               Basic income per share before cumulative effect
                 of change in accounting principle:
                   As reported                                   $         .30           .23           .26           .18
                   Pro forma                                               .29           .23           .25           .17

               Basic income per share:
                   As reported                                   $         .30           .23           .26           .97
                   Pro forma                                               .29           .23           .25           .96
</TABLE>


                                        9
<PAGE>
AIR METHODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

<TABLE>
<CAPTION>
                                                                       Three Months Ended           Six Months Ended
                                                                            June 30,                    June 30,
                                                                      2005           2004          2005          2004
                                                                  -------------------------------------------------------
<S>                                                               <C>            <C>           <C>           <C>
               Diluted income per share before cumulative effect
                 of change in accounting principle:
                   As reported                                    $         .29           .22           .25           .18
                   Pro forma                                                .28           .22           .23           .16

               Diluted income per share:
                   As reported                                    $         .29           .22           .25           .94
                   Pro forma                                                .28           .22           .23           .94
</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%; expected life of 4 years; and risk-free interest rate of
     3.3%.  The  weighted  average  fair value of options granted during the six
     months  ended  June 30, 2004, was $2.81. No options were granted during the
     six  months  ended  June  30,  2005.

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


                                       10
<PAGE>
AIR METHODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

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

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

<TABLE>
<CAPTION>
                                                              Products   Corporate   Intersegment
     FOR QUARTER ENDED JUNE 30:               CBM      HBM    Division  Activities   Eliminations   Consolidated
     -----------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>     <C>       <C>          <C>            <C>
     2005
     External revenue                       $60,577   25,308     1,800          --             --         87,685
     Intersegment revenue                        --       --     1,658          --         (1,658)            --
                                            ---------------------------------------------------------------------
     Total revenue                           60,577   25,308     3,458          --         (1,658)        87,685
                                            ---------------------------------------------------------------------

     Operating expenses                      34,704   20,222     2,531       2,062         (1,187)        58,332
     Depreciation & amortization              1,547    1,243       115          66             --          2,971
     Bad debt expense                        15,885      351        --          --             --         16,236
     Interest expense                           793      704        --          28             --          1,525
     Loss on early extinguishment of debt        --       --        --       3,104             --          3,104
     Other, net                                (233)      --        --         273             --             40
     Income tax expense                          --       --        --       2,153             --          2,153
                                            ---------------------------------------------------------------------
     Segment net income (loss)              $ 7,881    2,788       812      (7,686)          (471)         3,324
                                            =====================================================================

     Total assets                           $74,901      N/A       N/A     132,610         (2,164)       205,347
                                            =====================================================================

     2004
     External revenue                       $50,839   22,056     1,360          --             --         74,255
     Intersegment revenue                        --       --     1,767          --         (1,767)            --
                                            ---------------------------------------------------------------------
     Total revenue                           50,839   22,056     3,127          --         (1,767)        74,255
                                            ---------------------------------------------------------------------

     Operating expenses
                                             28,787   18,657     2,261       2,047         (1,628)        50,124
     Depreciation & amortization              1,379    1,239        66          50             --          2,734
     Bad debt expense                        15,481       --        --          --             --         15,481
     Interest expense                         1,027      979        --          27             --          2,033
     Other income, net                         (224)      --        --         (53)            --           (277)
     Income tax expense                          --       --        --       1,642             --          1,642
                                            ---------------------------------------------------------------------
     Segment net income (loss)              $ 4,389    1,181       800      (3,713)          (139)         2,518
                                            =====================================================================

     Total assets                           $61,256      N/A       N/A     139,557         (2,164)       198,649
                                            =====================================================================
</TABLE>


                                       11
<PAGE>
AIR METHODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

<TABLE>
<CAPTION>
                                                                      Products   Corporate   Intersegment
     FOR SIX MONTHS ENDED JUNE 30:                    CBM      HBM    Division  Activities   Eliminations   Consolidated
     --------------------------------------------------------------------------------------------------------------------
<S>                                                <C>        <C>     <C>       <C>          <C>            <C>
     2005
     External revenue                              $105,195   47,674     3,324          --             --        156,193
     Intersegment revenue                                --       --     4,445          --         (4,445)            --
                                                   ----------------------------------------------------------------------
     Total revenue                                  105,195   47,674     7,769          --         (4,445)       156,193
                                                   ----------------------------------------------------------------------

     Operating expenses                              66,539   39,786     5,852       4,374         (3,504)       113,047
     Depreciation & amortization                      2,944    2,591       206         127             --          5,868
     Bad debt expense                                25,993      354        --          --             --         26,347
     Interest expense                                 1,769    1,596        --          53             --          3,418
     Loss on early extinguishment of debt                --       --        --       3,104             --          3,104
     Other, net                                        (459)      --        --         126             --           (333)
     Income tax expense                                  --       --        --       1,886             --          1,886
                                                   ----------------------------------------------------------------------
     Segment net income (loss)                     $  8,409    3,347     1,711      (9,670)          (941)         2,856
                                                   ======================================================================
     Total assets                                  $ 74,901      N/A       N/A     132,610         (2,164)       205,347
                                                   ======================================================================

     2004
     External revenue                              $ 89,883   42,621     3,385          --             --        135,889
     Intersegment revenue                                --       --     3,933          --         (3,933)            --
                                                   ----------------------------------------------------------------------
     Total revenue                                   89,883   42,621     7,318          --         (3,933)       135,889
                                                   ----------------------------------------------------------------------

     Operating expenses                              56,189   36,863     4,744       4,031         (3,395)        98,432
     Depreciation & amortization                      2,709    2,496       108          98             --          5,411
     Bad debt expense                                25,221       --        --          --             --         25,221
     Interest expense                                 2,056    1,946        --         118             --          4,120
     Other income, net                                 (453)      --        --        (110)            --           (563)
     Income tax expense                                  --       --        --       1,294             --          1,294
                                                   ----------------------------------------------------------------------
     Segment net income (loss) before cumulative
       effect of change in accounting principle       4,161    1,316     2,466      (5,431)          (538)         1,974
     Cumulative effect of change in accounting
       principle, net                                    --       --        --       8,595             --          8,595
                                                   ----------------------------------------------------------------------
     Segment net income (loss)                     $  4,161    1,316     2,466       3,164           (538)        10,569
                                                   ======================================================================

     Total assets                                  $ 61,256      N/A       N/A     139,557         (2,164)       198,649
                                                   ======================================================================
</TABLE>


                                       12
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

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


OVERVIEW

The  Company  provides air medical transportation services throughout the United
States  and  designs,  manufactures, and installs medical aircraft interiors and
other aerospace products for domestic and international customers. The Company's
divisions,  or business segments, are organized according to the type of service
or  product  provided  and  consist  of  the  following:
-    Community-Based  Model (CBM) - provides air medical transportation services
     to  the  general  population as an independent service. Revenue consists of
     flight  fees  billed  directly to patients, their insurers, or governmental
     agencies, and cash flow is dependent upon collection from these individuals
     or entities. In the first six months of 2005 the CBM Division generated 67%
     of  the Company's total revenue, compared to 66% in the first six months of
     2004.
-    Hospital-Based  Model  (HBM) - provides air medical transportation services
     to  hospitals  throughout  the  U.S.  under exclusive operating agreements.
     Revenue  consists of fixed monthly fees (65% of total contract revenue) and
     hourly  flight  fees  (35%  of  total  contract revenue) billed to hospital
     customers.  The  division  also  has  two  contracts,  both  expansions  of
     contracts  with  hospital-based  customers,  for which it bills patients or
     insurers directly and is at risk for collection from these parties. The HBM
     Division  generated  31%  of  the Company's total revenue in the six months
     ended  June  30,  2005  and  2004.
-    Products  Division  -  designs, manufactures, and installs aircraft medical
     interiors  and  other aerospace and medical transport products for domestic
     and  international  customers. In the first six months of 2005 the Products
     Division generated 2% of the Company's total revenue, compared to 3% in the
     first  six  months  of  2004.

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

The  Company believes that the following factors have the greatest impact on its
results  of  operations  and  financial  condition:

-    FLIGHT  VOLUME.  Fluctuations in flight volume have a greater impact on CBM
     operations  than HBM operations because 100% of CBM revenue is derived from
     flight  fees, as compared to 35% of HBM revenue. By contrast, approximately
     63%  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
     8,600  and  15,300  for  the  quarter  and  six months ended June 30, 2005,
     respectively,  compared  to  approximately 8,000 and 15,000 for the quarter
     and  six  months  ended June 30, 2004, respectively. Patient transports for
     CBM  bases  open  longer  than  one  year  (Same-Base  Transports)  were
     approximately 7,900 and 14,100 in the quarter and six months ended June 30,
     2005,  respectively,  compared  to  approximately  7,900  and 14,700 in the
     quarter and six months ended June 30, 2004, respectively. Cancellations due
     to  unfavorable  weather  conditions were approximately 30.6% higher in the
     first  quarter  of  2005  compared  to  2004  for  bases  which had been in
     operation  for  longer  than  one  year.


                                       13
<PAGE>
-    RECEIVABLE  COLLECTIONS.  The  Company  responds  to  calls for air medical
     transports  without  pre-screening the creditworthiness of the patient. For
     CBM  and  HBM  at-risk operations, bad debt expense is estimated during the
     period  the  related  services are performed based on historical collection
     experience.  The  provision  is  adjusted  as  required  based  on  actual
     collections  in  subsequent  periods.  Both the pace of collections and the
     ultimate  collection  rate  are  affected by the overall health of the U.S.
     economy,  which  impacts  the  number  of indigent patients and funding for
     state-run  programs, such as Medicaid. Medicaid reimbursement rates in many
     jurisdictions  have  remained  well below the cost of providing air medical
     transportation.  The  Company  increased  prices  for  its  CBM  operations
     approximately  10%  effective September 2004 and an additional 7% effective
     March  2005.  Net  revenue  after  bad debt expense per transport increased
     18.3%  and  20.1%  for  the  quarter  and  six  months ended June 30, 2005,
     respectively,  compared to the prior year. The total provision for expected
     uncollectible  amounts,  including  contractual  discounts  for
     Medicare/Medicaid  and bad debts, decreased from 46.7% and 48.1% of related
     gross  flight  revenue  for the quarter and six months ended June 30, 2004,
     respectively,  to 46.3% and 45.8% for the quarter and six months ended June
     30,  2005,  respectively.  In  2004  the  Company increased staffing in the
     billing  and collections department, segmented billing by region, and hired
     a national billing director. The Company believes that these organizational
     changes  to  the  billing  department  resulted  in more timely billing and
     follow  up  on  outstanding  accounts  and, therefore, in an improvement in
     collection  rates.  Days'  sales  outstanding,  measured  by  comparing net
     revenue  for  the  annualized  previous  3-month  period to outstanding net
     accounts  receivable,  decreased from 116 days at June 30, 2004, to 99 days
     at  June  30,  2005.

-    AIRCRAFT  MAINTENANCE. Both CBM and HBM operations are directly affected by
     fluctuations  in  aircraft  maintenance  costs.  Proper  operation  of  the
     aircraft by flight crews and standardized maintenance practices can help to
     contain  maintenance  costs.  Increases in spare parts prices from original
     equipment manufacturers (OEM's) tend to be higher for aircraft which are no
     longer  in  production.  Three  models  of helicopters within the Company's
     fleet,  representing  27%  of  the total rotor wing fleet, are no longer in
     production and are, therefore, susceptible to price increases which outpace
     general  inflationary trends. In addition, on-condition components are more
     likely  to  require replacement with age. Total maintenance expense for CBM
     and  HBM operations increased 12.6% and 11.5% in the quarter and six months
     ended  June  30,  2005,  respectively, compared to 2004, while total flight
     volume  for  CBM  and HBM operations increased 11.1% and 6.8% over the same
     periods.  The  Company continues to evaluate opportunities to modernize its
     fleet  in  order  to  enhance  long-term  control  over  maintenance costs.
     Replacement  models  of  aircraft, however, typically have higher ownership
     costs than the models targeted for replacement. In 2004 the Company entered
     into  two  long-term  purchase  commitments  for  a  total  of 25 aircraft,
     designed  to  replace the discontinued models and other older aircraft over
     the  next  five  to seven years. As of June 30, 2005, the Company had taken
     delivery  of  ten  aircraft  under  these  commitments.

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

-    COMPETITIVE  PRESSURES  FROM  LOW-COST PROVIDERS. The Company is recognized
     within  the industry for its standard of service and its use of cabin-class
     aircraft.  Many of the Company's regional competitors utilize aircraft with
     lower  ownership  and operating costs and do not require a similar level of
     experience  for  aviation  and  medical  personnel.  Reimbursement  rates
     established  by  Medicare,  Medicaid,  and most insurance providers are not
     contingent upon the type of aircraft used or the experience of 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.


                                       14
<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 $3,324,000 and $2,856,000 for the quarter and
six  months  ended  June  30,  2005,  respectively,  compared  to $2,518,000 and
$10,569,000  for  the  quarter and six months ended June 30, 2004, respectively.
Net  income  for the quarter and six months ended June 30, 2005, included a loss
on  early  extinguishment  of  debt  of  $3,104,000  (with  a  tax  effect  of
approximately $1,211,000), as discussed more fully in Note 3 to the consolidated
financial  statements  included in Item 1 of this report. Net income for the six
months  ended  June  30,  2004,  included  the  cumulative effect of a change in
accounting  principle of $8,595,000 (net of income tax effect of $5,495,000), as
discussed more fully in Note 2 to the consolidated financial statements included
in  Item  1  of  this  report.

Operating  income was $10,146,000 and $10,931,000 for the quarter and six months
ended June 30, 2005, respectively, compared to $5,916,000 and $6,825,000 for the
quarter  and  six  months ended June 30, 2004, respectively. Growth in operating
income  for  2005 was partly due to an increase in flight volume for CBM and HBM
operations,  resulting  primarily  from  the  opening  of  new  bases  or  base
expansions.  In  addition,  net  reimbursement for CBM operations (revenue after
Medicare/Medicaid  discounts  and bad debt expense) improved 18.3% and 20.1% for
the  quarter  and  six  months  ended June 30, 2005, compared to the prior year.

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

FLIGHT  REVENUE  increased $13,004,000, or 17.8%, and $20,385,000, or 15.4%, for
the  quarter and six months ended June 30, 2005, respectively, compared to 2004.
Flight  revenue  is generated by both CBM and HBM operations and is recorded net
of  contractual  allowances  under  agreements  with  third-party  payers  and
Medicare/Medicaid  discounts.

-    CBM - Flight revenue increased $9,752,000, or 19.2%, to $60,557,000 for the
     second  quarter  of 2005 and $15,339,000, or 17.1%, to $105,156,000 for the
     six  months  ended  June  30,  2005,  for  the  following  reasons:
     -    Revenue  of  $4,716,000  and $8,137,000 for the quarter and six months
          ended  June 30, 2005, respectively, from the addition of eight new CBM
          bases  either  during  or  subsequent to the six months ended June 30,
          2004.
     -    Closure of one base in the first quarter of 2004, one during the third
          quarter  of  2004, and one during the first quarter of 2005, resulting
          in  a decrease in revenue of approximately $914,000 and $1,316,000 for
          the  quarter  and  six  months  ended  June  30,  2005,  respectively.
     -    Average  price  increases  of approximately 10% for all CBM operations
          effective  September  1,  2004 and approximately 7% effective March 1,
          2005.
     -    Decrease  in  Same-Base  Transports.  Excluding  the impact of the new
          bases  and  base closures discussed above, total flight volume for all
          CBM  operations  decreased 4.0% in the six months ended June 30, 2005,
          compared  to  the  prior  year.  Same-Base  Transports  for the second
          quarter  of 2005 were essentially unchanged from the second quarter of
          2004. The decrease in flight volume is primarily attributed to adverse
          weather  conditions in the first quarter of 2005. Cancellations due to
          unfavorable  weather conditions were approximately 30.6% higher in the
          first  quarter  of  2005  compared  to  the  first  quarter  of  2004.

-    HBM - Flight revenue increased $3,252,000, or 14.7%, to $25,308,000 for the
     second quarter of 2005 and $5,046,000, or 11.8%, to $47,667,000 for the six
     months  ended  June  30,  2005,  for  the  following  reasons:
     -    Revenue  of  $1,826,000  and $3,277,000 for the quarter and six months
          ended  June 30, 2005, respectively, from the addition of two new bases
          and  the  expansion  of seven contracts either during or subsequent to
          the  six  months  ended  June  30,  2004.
     -    Discontinuation of service under one contract during the first quarter
          of  2004,  resulting in a decrease in revenue of approximately $88,000
          in  the  six  months  ended  June  30,  2005.
     -    Annual  price  increases in the majority of contracts based on changes
          in  the  Consumer  Price  Index.
     -    Increase of 5.6% in flight volume for the quarter ended June 30, 2005,
          for  all  contracts  excluding the new contracts, contract expansions,
          and  discontinued contract discussed above. Flight volume, taking into
          account the same exclusions, was basically unchanged in the six months
          ended  June  30,  2005,  compared  to  2004.


                                       15
<PAGE>
FLIGHT  CENTER COSTS (consisting primarily of pilot, mechanic, and medical staff
salaries and benefits) increased $3,414,000, or 14.8%, and $6,114,000, or 13.2%,
for  the  quarter  and six months ended June 30, 2005, respectively, compared to
2004.  Flight  center  costs  included  an  increase of $168,000 and $674,000 in
workers compensation expense for the quarter and six months ended June 30, 2005,
respectively,  as  a  result of two fatal accidents experienced during the first
quarter.  Other  changes  by  business  segment  are  as  follows:

-    CBM  -  Flight  center costs increased $2,408,000, or 16.2%, to $17,245,000
     for the second quarter of 2005 and $4,535,000, or 15.4%, to $33,959,000 for
     the  six  months  ended  June  30,  2005,  for  the  following  reasons:
     -    Approximately $1,637,000 and $3,463,000 for the quarter and six months
          ended  June  30,  2005, respectively, for the addition of personnel to
          staff  new  base  locations  described  above.
     -    Decrease  of  approximately  $453,000 and $801,000 for the quarter and
          six  months  ended  June 30, 2005, respectively, due to the closure of
          base  locations  described  above.
     -    Increases  in  salaries  for  merit  pay  raises.

-    HBM - Flight center costs increased $1,006,000, or 12.1%, to $9,286,000 for
     the  second quarter of 2005 and $1,579,000, or 9.4%, to $18,318,000 for the
     six  months  ended  June  30,  2005,  primarily  due  to  the  following:
     -    Approximately  $364,000  and  $979,000  for the quarter and six months
          ended  June  30,  2005, respectively, for the addition of personnel to
          staff  new  base  locations  described  above.
     -    Decrease  of  approximately  $35,000 for the six months ended June 30,
          2005,  due  to  the  closure  of  one  base  location described above.
     -    Increases  in  salaries  for  merit  pay  raises.

AIRCRAFT  OPERATING  EXPENSES increased $1,923,000, or 12.9%, and $3,131,000, or
10.9%,  for  the  quarter  and  six months ended June 30, 2005, respectively, in
comparison to the quarter and six months ended June 30, 2004. Aircraft operating
expenses  consist  of fuel, insurance, and maintenance costs and generally are a
function of the size of the fleet, the type of aircraft flown, and the number of
hours  flown.  The  increase  in  costs  is  due  to  the  following:
-    Addition  of  15  helicopters  for  CBM operations and 8 for HBM operations
     either  during  or subsequent to the first six months of 2004, resulting in
     increases  of  approximately  $975,000 and $1,966,000 for the three and six
     months  ended  June  30,  2005,  respectively.
-    Increases  of  approximately  $72,000  and  $122,000  in fuel costs for the
     quarter  and  six  months ended June 30, 2005, respectively, as a result of
     the  addition  of  eight  new  CBM  bases,  net  of  the  impact  of  three
     discontinued  CBM bases. The addition of new HBM bases and expansion of HBM
     programs did not have a material impact on fuel costs because HBM customers
     typically  pay  for  all  fuel  consumed  in  revenue  flights.
-    Increases of approximately 26.3% and 19.1% in the cost of aircraft fuel per
     hour  flown  for  the  quarter  and  six  months  ended  June  30,  2005,
     respectively.
-    Decrease  in  hull  insurance  rates  effective  July  2004.

AIRCRAFT  RENTAL EXPENSE increased $950,000, or 26.9%, and $1,900,000, or 27.7%,
for  the quarter and six months ended June 30, 2005, respectively, in comparison
to  the  quarter  and six months ended June 30, 2004. Incremental rental expense
for 17 leased aircraft added to the Company's fleet, either during or subsequent
to  the first six months of 2004, totaled $968,000 and $1,768,000 in the quarter
and  six  months  ended  June  30,  2005,  respectively.

BAD  DEBT  EXPENSE increased $755,000, or 4.9%, and $1,126,000, or 4.5%, for the
quarter  and six months ended June 30, 2005, respectively, compared to 2004. The
effect  of  the  increase  in  related  flight  revenue was offset in part by an
improvement  in collection rates. Bad debt as a percentage of related net flight
revenue  was 26.4% and 24.7% for the quarter and six months ended June 30, 2005,
respectively,  compared  to 30.5% and 28.1% for the quarter and six months ended
June 30, 2004, respectively. Flight revenue is recorded net of Medicare/Medicaid
discounts.  The  total  allowance  for expected uncollectible amounts, including
contractual  discounts  and bad debts, decreased from 46.7% and 48.1% of related
gross  flight  revenue  for  the  quarter  and  six  months ended June 30, 2004,
respectively,  to  46.3%  and 45.8% in the quarter and six months ended June 30,
2005,  respectively.  The  Company  believes  that the improvement in collection
rates  is  primarily  the  result  of  organizational changes within its billing
department  which  provided for more timely billing and follow up on outstanding
accounts.  Bad  debt expense related to Products Division was not significant in
either  2005  or  2004.


                                       16
<PAGE>
PRODUCTS DIVISION

SALES  OF  MEDICAL  INTERIORS AND PRODUCTS increased $440,000, or 32.4%, for the
second quarter of 2005 compared to 2004, and decreased $61,000, or 1.8%, for the
six  months ended June 30, 2005, compared to 2004. In the first quarter of 2005,
the  Company completed production of 11 Multi-Mission Medevac Systems for the U.
S. Army's HH-60L Black Hawk helicopter and 19 litter systems for the U.S. Army's
Medical  Evacuation  Vehicle  (MEV).  In the second quarter of 2005, the Company
continued  production  of  two HH60L units and began production of 11 additional
HH60L  units  and  21  MEV  units.  Other  significant projects in 2005 included
production  of  a  multi-mission interior for a Sikorsky FIREHAWK helicopter for
the  Los  Angeles County Fire Department and two modular medical interiors for a
commercial  customer.  Revenue  by  product  line for the quarter and six months
ended  June  30,  2005,  was  as  follows::
-    $803,000  and  $1,589,000  -  manufacture  of  multi-mission  interiors
-    $398,000  and  $802,000  - manufacture and installation of modular, medical
     interiors
-    $599,000  and $933,000 - design and manufacture of other aerospace products

Significant  projects  in 2004 included production of 13 HH-60L units and 21 MEV
units.  In  the  second  quarter of 2004, the Company also began production of a
multi-mission  interior  for  a Sikorsky FIREHAWK helicopter for the Los Angeles
County  Fire  Department. Revenue by product line for the quarter and six months
ended  June  30,  2004,  respectively,  was  as  follows:
-    $830,000  and  $2,021,000  -  manufacture  of  multi-mission  interiors
-    $250,000  and  $459,000  - manufacture and installation of modular, medical
     interiors
-    $280,000  and $905,000 - design and manufacture of other aerospace products

COST  OF  MEDICAL  INTERIORS  AND  PRODUCTS  increased  $614,000, or 113.9%, and
$819,000,  or  69.6%,  for  the  quarter  and six months ended June 30, 2005, as
compared  to the previous year. The average net margin earned on projects during
2005  was  24.2%  for  the  second  quarter  and  26.6% for the six-month period
compared  to  44.8% for the second quarter and 47.1% for the six-month period in
2004,  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.  Cost  of  medical interiors and
products  also includes certain fixed costs, such as administrative salaries and
facilities  rent,  which  do  not  vary  with  volume  of  sales.

GENERAL EXPENSES

DEPRECIATION AND AMORTIZATION EXPENSE increased $237,000, or 8.7%, and $457,000,
or  8.4%,  for  the  quarter  and  six months ended June 30, 2005, respectively,
compared  to  2004,  primarily as a result of upgrades to aircraft, engines, and
avionics  systems;  purchase  of  rotable  equipment; and purchase of office and
medical  equipment  for  the  new  bases  described  above.

GENERAL  AND  ADMINISTRATIVE  (G&A) EXPENSES increased $1,074,000, or 13.4%, and
$2,315,000,  or  14.9%,  for  the  quarter  and  six months ended June 30, 2005,
respectively,  compared  to  2004,  reflecting  an  increase  in  billing  and
collections  and  CBM  program  administration staff to manage the growth in the
Company's  operations.  G&A expenses include accounting and finance, billing and
collections,  human resources, aviation management, pilot training, dispatch and
communications,  and  CBM  program  administration.  G&A expenses were 10.3% and
11.4%  of  revenue  for  the  quarter  and  six  months  ended  June  30,  2005,
respectively,  compared  to  10.8%  and 11.4% of revenue for the quarter and six
months  ended  June 30, 2004, respectively. During the six months ended June 30,
2005, the Company also incurred approximately $298,000 in audit fees and outside
consultant  costs  related to the audit of internal controls required by Section
404  of  the  Sarbanes-Oxley  Act  of 2002 for the year ended December 31, 2004.

INTEREST  EXPENSE  decreased  $508,000, or 25.0%, and $702,000, or 17.0%, in the
quarter  and  six  months  ended  June 30, 2005, respectively, compared to 2004,
primarily  as  a  result  of  regularly scheduled payments of long-term debt and
decreased  borrowings  against the Company's line of credit. The average balance
outstanding  against  the line was approximately $18.3 million and $17.8 million
during  the  three and six months ended June 30, 2005, respectively, compared to
$20.4  million  and $19.6 million during the three and six months ended June 30,
2004,  respectively. In addition, in May 2005, the Company repaid $23 million in
subordinated  debt,  which  had an effective interest rate of 16.2% during 2005,
with  the  proceeds  of  $20  million  in  term  loans which bore interest at an
effective  rate  of  approximately  6.6%  during the second quarter of 2005. The
remainder  of  the  repayment  was  funded  by draws against the line of credit.


                                       17
<PAGE>
LOSS  ON  EARLY EXTINGUISHMENT OF DEBT for the quarter and six months ended June
30,  2005,  totaled  $3,104,000  and  related to the repayment of $23 million in
subordinated debt in May 2005. The Company wrote off approximately $1,724,000 in
debt  origination  costs  and note discount related to the subordinated debt and
paid a prepayment penalty of $1,380,000 to the holders of the subordinated debt.

INCOME  TAX  EXPENSE was $2,153,000 and $1,886,000 in the quarter and six months
ended  June 30, 2005, respectively, and $1,642,000 and $1,294,000 in the quarter
and  six  months ended June 30, 2004, respectively, both at an effective rate of
approximately  39%.


LIQUIDITY AND CAPITAL RESOURCES

The  Company had working capital of $56,630,000 as of June 30, 2005, compared to
$48,849,000  at  December  31,  2004.  The change in working capital position is
primarily  attributable  to  the  increase  of  $5,782,000  in  net  receivables
consistent  with  increased  revenue for the CBM and HBM divisions and increased
net  reimbursement  for  CBM  operations.

SOURCES AND USES OF CASH

The  Company  had  cash  and cash equivalents of $7,840,000 as of June 30, 2005,
compared to $2,603,000 at December 31, 2004. Cash generated by operations in the
six  months  ended  June 30, 2005, totaled $10,416,000 compared to $6,326,000 in
2004,  primarily  due  to the improvement in operating results, described above.
Receivable  balances,  net  of  bad  debt  expense, increased $5,782,000 in 2005
compared  to  $3,654,000  in  2004,  reflecting  continued growth in CBM and HBM
revenue  and  an  improved  net  reimbursement rate for CBM operations. Costs in
excess of billings and work-in-process on medical interiors decreased $1,599,000
in  2005,  compared  to  $388,000  in 2004, primarily due to billings issued for
HH60L  units  completed  during the first quarter of 2005. Balances for accounts
payable  and  other  accrued liabilities increased $633,000 in 2005, compared to
decreasing  $1,280,000  in  2004,  due  in  part  to the timing of the bi-weekly
payroll  processing;  the first six months of 2005 included twelve bi-weekly pay
dates  compared  to  13  in  the  first six months of 2004. Deferred revenue and
billings  in  excess of costs increased $152,000 in 2005, compared to $2,252,000
in  2004;  billings  in excess of costs in 2004 included a down payment from the
Los  Angeles  County  Fire Department for production of a multi-mission interior
which  began  in  the  second  quarter  of  2004.

Cash  used  by  investing  activities  totaled  $2,296,000  in  2005 compared to
$6,689,000  in  2004.  Equipment  acquisitions  in  2005  consisted primarily of
rotable  equipment,  medical and office equipment for new bases, and upgrades to
aircraft,  engines,  and avionics systems. In 2005 the Company received $463,000
in  insurance  proceeds  for  an  aircraft  destroyed in an accident and sold an
aircraft  previously  classified  as  held  for  sale  for  $607,000.  Equipment
acquisitions  in  2004  consisted  primarily  of  medical  interior and avionics
installations, information systems hardware and software, and rotable equipment.
Investment  activities  in  2004 also included payment of approximately $590,000
for  deposits on the purchase of new aircraft. In 2004 the Company received $1.2
million  for  the  sale  of  one  of its aircraft which was leased back from the
buyer.

Financing  activities  used $2,883,000 in 2005 compared to generating $87,000 in
2004.  The  primary  use  of  cash in both 2005 and 2004 was regularly scheduled
payments  of  long-term debt and capital lease obligations. In 2005, the Company
used  $20 million of term loan proceeds and additional draws against its line of
credit  to  fund the early repayment of $23 million in subordinated debt and the
related prepayment penalty of $1,380,000. The Company also paid $365,000 in debt
issuance  costs, primarily associated with the amendment to its senior revolving
credit  facility  in  May  2005.  In 2004 regularly scheduled debt payments were
offset  by  proceeds  from  new  note  agreements,  which were used primarily to
refinance  existing debt with higher interest rates, and by higher draws against
the  Company's  line  of  credit.

In  May  2005,  the  Company  amended  and  restated its senior revolving credit
facility  and repaid its subordinated debt facility. The amendment provided for,
among other things, $20 million of term loans, an extension of the maturity date
to  March  31,  2010, and modifications to the financial covenants. The proceeds
from the term loans, along with additional borrowings under the revolving credit
facility, were used to repay the Company's $23 million of subordinated debt. The
term  loans  and  the revolving loans bear interest, at the Company's option, at
either  (i) the higher of the federal funds rate plus 0.50% or the prime rate as
announced  by  the lenders plus an applicable margin ranging from 0.50% to 1.50%
or  (ii)  a  rate equal to LIBOR plus an applicable margin ranging from 1.75% to
3.75%.  Principal  payments  on  the  term  loans


                                       18
<PAGE>
will  commence in April 2006 and total $4.5 million in 2006, $6 million in 2007,
$3  million  in  2008, $2 million in 2009, and $4.5 million in 2010. In 2005 the
effective interest rate on the subordinated debt, including amortization of debt
origination  costs and note discount, was 16.2%. The term loans bore interest at
an effective rate of approximately 6.6% during the second quarter of 2005. As of
June  30,  2005,  the Company was in compliance with the covenants of the senior
revolving  credit  facility.


OUTLOOK FOR 2005

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

Community-Based Model

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

Hospital-Based Model

In  the  second quarter of 2005, the Company expanded four existing contracts in
Utah,  Minnesota, Virginia, and West Virginia to additional satellite bases. The
Company  expects  similar  expansions under two other contracts during the third
quarter  of  2005.  Twelve  hospital contracts are due for renewal in 2005. Five
have  been  renewed,  and  renewals  on  the remaining seven contracts are still
pending.  The  Company  expects  2005  flight  activity  for continuing hospital
contracts  to  remain  consistent  with  historical  levels.

Products Division

In  the  second  quarter  of  2005,  the  Company  received  an order for eleven
additional  HH60L  units.  As  of  June 30, 2005, the Company was continuing the
production of 21 MEV units and thirteen HH-60L units, including the eleven units
ordered  in the second quarter,  and the installation of an avionics system in a
helicopter  for  an HBM customer. Remaining revenue for all contracts in process
as  of  June  30,  2005,  is  estimated  at  $6.2  million.

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

All Segments

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

There  can  be  no  assurance  that the Company will continue to maintain flight
volume or current levels of collections on receivables for CBM operations, renew
operating  agreements  for  its  HBM  operations,  or  generate  new  profitable
contracts  for  the Products Division. Based on the anticipated level of HBM and
CBM  flight  activity and the projects in process for the Products Division, the
Company  expects  to generate sufficient cash flow to meet its operational needs
throughout the remainder of 2005. The Company also had approximately $12,072,000
in  borrowing  capacity available under its revolving credit facility as of June
30,  2005.


                                       19
<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 2005" and
those  described  below.

-    Flight  volume  -  All  CBM revenue and approximately 35% of HBM revenue is
     dependent  upon  flight  volume.  Approximately  37% 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.

-    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.

-    Highly  leveraged  balance  sheet  -  The  Company  is obligated under debt
     facilities providing for up to approximately $94.1 million of indebtedness,
     of  which  approximately $71.6 million was outstanding (net of $7.8 million
     of  cash)  at  June  30,  2005.  If  the  Company fails to meet its payment
     obligations  or  otherwise  defaults  under  the  agreements  governing
     indebtedness,  the  lenders  under  those agreements will have the right to
     accelerate  the indebtedness and exercise other rights and remedies against
     the  Company. These rights and remedies include the rights to repossess and
     foreclose  upon  the  assets  that  serve  as collateral, initiate judicial
     foreclosure against the Company, petition a court to appoint a receiver for
     the  Company,  and  initiate involuntary bankruptcy proceedings against the
     Company.  If  lenders  exercise  their  rights  and remedies, the Company's
     assets  may  not be sufficient to repay outstanding indebtedness, and there
     may  be  no  assets  remaining  after  payment of indebtedness to provide a
     return  on  common  stock.

-    Restrictive debt covenants - The Company's senior revolving credit facility
     contains  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 agreement or to
     maintain  the required financial ratios could result in an event of default
     and  accelerate  payment  of  the  principal  balances due under the senior
     revolving credit facility. Given factors beyond the Company's control, such
     as  interruptions  in operations from unusual weather patterns not included
     in  current projections, there can be no assurance that the Company will be
     able  to  remain  in  compliance with financial covenants in the future, or
     that,  in  the  event of non-compliance, the Company will be able to obtain
     waivers  from the lenders, or that to obtain such waivers, the Company will
     not  be  required  to  pay lenders significant cash or equity compensation.

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


                                       20
<PAGE>
-    Governmental  regulation  -  The  air  medical  transportation services and
     products  industry  is  subject  to  extensive  regulation  by governmental
     agencies,  including  the  Federal  Aviation  Administration,  which impose
     significant  compliance  costs  on  the Company. In addition, reimbursement
     rates  for air ambulance services established by governmental programs such
     as  Medicare  directly affect CBM revenue and indirectly affect HBM revenue
     from customers. Changes in laws or regulations or reimbursement rates could
     have  a  material  adverse  impact  on  the Company's cost of operations or
     revenue from flight operations. In January 2005 the Company experienced two
     fatal  accidents  which  are  currently under investigation by the National
     Transportation  Safety  Board.  The outcome of these investigations and the
     potential  impact  on  the  Company's operations cannot yet be ascertained.

-    Compliance  with  corporate  governance and public disclosure regulations -
     New  laws,  regulations, and standards relating to corporate governance and
     public  disclosure-including  the  Sarbanes-Oxley  Act  of  2002,  new  SEC
     regulations,  and  NASDAQ  National  Market  rules-are  subject  to varying
     interpretations in many cases due to lack of specificity. Their application
     may  evolve  over  time  as  new  guidance  is  provided  by regulatory and
     governing  bodies,  which  may  result  in continuing uncertainty regarding
     compliance  matters  and  higher costs necessitated by ongoing revisions to
     disclosure and governance practices. The Company's efforts to maintain high
     standards  of corporate governance and public disclosure in compliance with
     evolving  laws and regulations have resulted in, and are likely to continue
     to result in, increased general and administrative expenses and a diversion
     of  management's  time  and attention from revenue-generating activities to
     compliance  activities.  In  particular, compliance with Section 404 of the
     Sarbanes-Oxley  Act  of  2002,  which  requires  the  Company  to  include
     management  and  auditor reports on internal controls as part of its annual
     report,  has  required  commitment  of significant financial and managerial
     resources.  In  addition,  board  members, the chief executive officer, and
     chief  financial officer could face an increased risk of personal liability
     in  connection  with  the  performance  of  their  duties. As a result, the
     Company  may  have  difficulty  attracting  and  retaining  qualified board
     members  and  executive  officers. If efforts to comply with new or changed
     laws,  regulations,  and  standards  differ from the activities intended by
     regulatory  or governing bodies due to ambiguities related to practice, the
     Company's  reputation  may  be  harmed.

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

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

-    Fuel  costs  -  Fuel accounted for 2.3% of total operating expenses for the
     six  months ended June 30, 2005. Both the cost and availability of fuel are
     influenced  by  many economic and political factors and events occurring in
     oil-producing  countries  throughout  the  world,  and fuel costs fluctuate
     widely.  Recently the price per barrel of oil has been at an all-time high.
     The  Company  cannot  predict the future cost and availability of fuel. The
     unavailability  of  adequate  fuel supplies could have an adverse effect on
     the  Company's  cost  of  operations  and  profitability.  Generally,  the
     Company's  HBM  customers  pay  for  all  fuel consumed in medical flights.
     However,  the  Company's  ability  to  pass on increased fuel costs for CBM
     operations  may  be  limited  by economic and competitive conditions and by
     reimbursement  rates  established  by  Medicare,  Medicaid,  and  insurance
     providers.  The  Company does not currently have any agreements in place to
     hedge  its  fuel  costs.


                                       21
<PAGE>
-    Aviation  industry hazards and insurance limitations - Hazards are inherent
     in  the  aviation  industry  and  may  result in loss of life and property,
     thereby  exposing  the  Company to potentially substantial liability claims
     arising  out  of the operation of aircraft. The Company may also be sued in
     connection  with  medical  malpractice claims arising from events occurring
     during a medical flight. Under HBM operating agreements, hospital customers
     have  agreed  to  indemnify  the  Company  against liability arising out of
     medical  malpractice  claims  and  to  maintain  insurance  covering  such
     liability, but there can be no assurance that a hospital will not challenge
     the  indemnification  rights  or  will  have sufficient assets or insurance
     coverage  for  full indemnity. In CBM operations, Company personnel perform
     medical procedures on transported patients, which may expose the Company to
     significant  direct  legal  exposure  to  medical  malpractice  claims. The
     Company  maintains  general  liability aviation insurance, aviation product
     liability  coverage,  and  medical malpractice insurance, and believes that
     the  level of coverage is customary in the industry and adequate to protect
     against  claims.  However,  there  can  be  no  assurance  that  it will be
     sufficient  to  cover  potential  claims or that present levels of coverage
     will  be  available  in  the future at reasonable cost. A limited number of
     hull  and liability insurance underwriters provide coverage for air medical
     operators. A significant downturn in insurance market conditions could have
     a  material  adverse  effect  on  the  Company's  cost  of  operations.
     Approximately  33%  of any increases in hull and liability insurance may be
     passed  through to the Company's HBM customers according to contract terms.
     In  addition, the loss of any aircraft as a result of accidents could cause
     both significant adverse publicity and interruption of air medical services
     to  client  hospitals, which could adversely affect the Company's operating
     results and relationship with such hospitals. The January accidents did not
     have  a material impact on the Company's hull and liability insurance rates
     as  renewed  in  July 2005. However, in the six months ended June 30, 2005,
     the  Company  recorded  an  increase  in  expense  of  $790,000  for  the
     self-insured  portion  of  workers compensation premiums as a result of the
     accidents.

-    Foreign ownership - Federal law requires that United States air carriers be
     citizens  of  the  United  States. For a corporation to qualify as a United
     States  citizen, the president and at least two-thirds of the directors and
     other  managing  officers of the corporation must be United States citizens
     and at least 75% of the voting interest of the corporation must be owned or
     controlled  by  United States citizens. If the Company is unable to satisfy
     these  requirements,  operating  authority  from  the  Department  of
     Transportation  may be revoked. Furthermore, under certain loan agreements,
     an event of default occurs if less than 80% of the voting interest is owned
     or  controlled  by United States citizens. As of June 30, 2005, the Company
     was  aware  of  one  foreign  person  who,  according  to public securities
     filings,  is  believed  to  hold  approximately  9.9% of outstanding Common
     Stock.  Because the Company is unable to control the transfer of its stock,
     it  is  unable  to  assure  that  it  can  remain  in compliance with these
     requirements  in  the  future.

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

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

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


                                       22
<PAGE>
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,  and depreciation and residual values. Management bases
its  estimates  and  judgments  on  historical  experience  and on various other
factors  that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may  differ  from  these  estimates  under  different assumptions or conditions.
Management  believes  the following critical accounting policies affect its more
significant  judgments and estimates used in the preparation of its consolidated
financial  statements.

Revenue Recognition

Fixed flight fee revenue under the Company's operating agreements with hospitals
is  recognized monthly over the terms of the agreements. Flight revenue relating
to patient transports is recognized upon completion of the services. Revenue and
accounts  receivable  are recorded net of estimated contractual allowances under
agreements  with  third-party  payers.  Estimates  of contractual allowances are
initially  determined  based on historical discount percentages for Medicare and
Medicaid patients and adjusted periodically based on actual discounts. If actual
discounts  realized  are  more  or  less  than  those  projected  by management,
adjustments  to  contractual  allowances may be required. Based on related gross
flight  revenue  for  the  six months ended June 30, 2005, a change of 100 basis
points  in the percentage of estimated contractual discounts would have resulted
in  a  change  of  approximately  $1,478,000  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 related net flight revenue for the six months ended
June  30,  2005,  a  change  of  100 basis points in the percentage of estimated
uncollectible  accounts  would  have  resulted  in  a  change  of  approximately
$1,065,000  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 bad debt 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


                                       23
<PAGE>
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.

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  $20,313,000
outstanding  against  the line of credit and $22,026,000 in notes payable. Based
on  the  amounts  outstanding at June 30, 2005, the annual impact of a change of
100  basis  points  in  interest rates would be approximately $423,000. Interest
rates on these instruments approximate current market rates as of June 30, 2005.

Periodically  the  Company  enters  into  interest  rate risk hedges to minimize
exposure  to  the  effect of an increase in interest rates. As of June 30, 2005,
the  Company  was  party to one interest rate swap agreement. The swap agreement
provides  that  the  Company will pay a 3.62% fixed interest rate on $889,000 of
notional  principal  and  receive a floating interest rate (LIBOR plus 2.50%) on
the  same  amount  of  notional  principal  from  the  counterparty.

ITEM  4.     CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The  Company  maintains  disclosure controls and procedures that are designed to
ensure  that information required to be disclosed in the Company's reports filed
or  submitted  to  the  Securities  and Exchange Commission under the Securities
Exchange  Act  of  1934,  as  amended,  is  recorded,  processed, summarized and
reported  within the time periods specified by the Commission's rules and forms,
and  that  information  is accumulated and communicated to management, including
the  principal  executive  and financial officers (referred to in this report as
the  Certifying  Officers),  as  appropriate to allow timely decisions regarding
required  disclosure.  Management,  under  the  supervision  and  with  the
participation  of  the  Certifying  Officers,  evaluated  the  effectiveness  of
disclosure  controls  and  procedures  as  of  June  30,  2005, pursuant to Rule
13a-15(b)  under  the  Exchange  Act.  Based  on that evaluation, the Certifying
Officers  have  concluded  that,  as  of June 30, 2005, the Company's disclosure
controls  and  procedures  were  effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

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


                                       24
<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

          None

ITEM 5.   OTHER INFORMATION

          None

ITEM 6.   EXHIBITS

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

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

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


                                       25
<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:  August 9, 2005                          By  /s/ Aaron D. Todd
                                                  ------------------------------
                                               Aaron D. Todd
                                               Chief Executive Officer


Date:  August 9, 2005                          By  /s/ Trent J. Carman
                                                  ------------------------------
                                               Trent J. Carman
                                               Chief Financial Officer


Date:  August 9, 2005                          By  /s/ Sharon J. Keck
                                                  ------------------------------
                                               Sharon J. Keck
                                               Chief Accounting Officer


                                       26