January 29, 2001



Aircraft Finance Trust
c/o  Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, DE  19890

Gentlemen:

In response to your recent  request,  BK Associates,  Inc. is pleased to provide
our opinion  regarding  the current fair market values (CFMV) as of December 31,
2000 and future fair market values (FFMV) at lease expiry of the aircraft in the
Aircraft Finance Trust (AFT) Portfolio  (Portfolio).  The Portfolio is comprised
of 36 commercial  jet  aircraft,  which are further  identified by type,  serial
number,  date of  manufacture  and engine model in Figure 1. The  Portfolio  was
previously appraised by BK Associates most recently in our letter dated December
6, 1999. This appraisal represents an update of that letter.

Based upon our knowledge of these various  aircraft types,  our knowledge of the
capabilities and uses to which they have been put in various parts of the world,
our knowledge of the marketing of used  aircraft,  and our knowledge of aircraft
in general,  it is our opinion that the CFMVs and FFMVs in U.S.  dollars of each
of the aircraft in the Portfolio are as shown in Figure 1.

According to the International  Society of Transport  Aircraft Trading's (ISTAT)
definition of fair market value, to which BK Associates  subscribes,  the quoted
fair market value is the  Appraiser's  opinion of the most likely  trading price
that may be generated for an aircraft  under the market  circumstances  that are
perceived to exist at the time in question.  The fair market value  assumes that
the  aircraft is valued for its  highest  and best use,  that the parties to the
hypothetical sale transaction are willing, able, prudent and knowledgeable,  and
under no unusual  pressure for a prompt sale, and that the transaction  would be
negotiated in an open and unrestricted market on an arm's length basis, for cash
or equivalent consideration,  and given an adequate amount of time for effective
exposure to prospective buyers, which BK Associates believes is 12 to 18 months.

The fair market value is normally  determined  by  comparison to recent sales of
similar  aircraft  under  similar  conditions.  The  impact  of  current  market
conditions  on the  recent  sales  must be  evaluated  as well.  BK  Associates'
assessment of the impact of these factors on current and forecast  values of the
Aircraft is discussed below.


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January 29, 2001
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Supply and demand is the major  influence on aircraft  values.  Our industry has
experienced a peak of surplus  commercial jet aircraft on the market in mid-1991
and  watched  the  subsequent  increase  in demand for air travel  bring about a
return of many of the  grounded  and stored  surplus  fleet to revenue  service.
According to BACK Information Services, the peak surplus of 815 aircraft in 1991
was  significantly  reduced  during the ensuing  years to a sustained low period
beginning in 1997 with an annualized  average of 310 surplus aircraft.  However,
during the  second and third  quarter  periods of 1998,  the fleet  availability
began to increase once again, with the latest period reported at 549 units.

The following,  summarized  from the latest issue of BACK  Commercial Jet Fleet,
lists aircraft  similar to those in the Portfolio which are publicly  advertised
for sale or lease and  compares the current  availability  to that one year ago.
Additionally,  the aircraft  currently  in storage are  quantified  however,  it
should be understood  that some  operators  and lessors do not  publicize  their
aircraft  availability  and the  list  of  stored  aircraft  does  not  directly
compliment the availability listing.  Therefore, it is reasonable to assume that
to some extent these two lists are additive.

                                                                STORED
            Model           12/1999         12/2000            12/2000
            -----           -------         -------            -------

          A310-300               7               2                 4
            A320                 5               7                 0
          B737-300              23              13                 3
          B737-400               9               7                 1
          B767-200               5               6                 3
          B767-300               9               2                 0
            MD83                 0               9                 1
           DC10-30               4              12                13
                                 -              --                --

       TOTAL AIRCRAFT           62              58                25

The trend of available or surplus  aircraft has generally  stabilized since late
last year.  This is  illustrated  in the above table,  which focuses only on the
aircraft  type  in the  Portfolio,  but  is  the  situation  across  almost  all
commercial jet aircraft types.  Availability of the selected  Portfolio aircraft
stands at 58 units.  BK  Associates  believes some  availability  of aircraft is
normal  even in a balanced  market  such that a few units of each model could be
expected to be available even in a balanced market.



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January 29, 2001
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Appraised values contained in this report in most cases are moderately less than
values of one year ago. We consider the market today approximates that of a year
ago thus,  the lower values  result from  additional  age of the  Portfolio  and
continued utilization.

Current  values are normally  based on  comparison to recent sales of comparable
aircraft.  Our  database  of  used  aircraft  sales  contains  the  transactions
summarized on the "Recent Sales" listing attached which were reported during the
preceding  approximate  24 months  involving  aircraft  similar to those in this
appraisal  letter.  In some instances,  reference may be made to stipulated loss
value (SLV) or insured  value.  Although this data is not a sale price,  it does
represent a value agreed to by both parties to the  transaction and the value is
normally greater than a fair market value.  Likewise,  a reference may be to the
loan value or mortgage amount,  which can be useful in determining a fair market
value.

BK Associates is confidentially  aware of numerous additional  transactions that
support values reached in this appraisal.

The future values are largely  based on comparison to historic  sales data under
comparable  circumstances  adjusted to account for the impact of expected market
conditions. The market conditions that will have the most impact on the residual
value during the next few years are noise regulations and the expected return to
balance  between  supply and demand.  Our FFMVs are  expressed  in 2000  dollars
without inflation.

It should be understood  that BK Associates has neither  inspected the Portfolio
aircraft  nor their  maintenance  records,  but has relied upon the  information
provided by yourself and in the BK Associates  database  which  includes data on
the aircraft that was obtained for the previous appraisal we have conducted. The
assumptions have been made that all Airworthiness  Directives have been complied
with; accident damage has not been incurred that would affect market values; the
aircraft  are at half-time  between  scheduled  major  maintenance  events;  and
maintenance  has been  accomplished  in  accordance  with a civil  airworthiness
authority's  approved  maintenance  program  and  accepted  industry  standards.
Deviations from these assumptions can change significantly our opinion regarding
the Portfolio values.

BK  Associates,  Inc.  has no present or  contemplated  future  interest  in the
Portfolio,  nor any interest that would  preclude our making a fair and unbiased
estimate.  This  appraisal  represents  the opinion of BK  Associates,  Inc. and
reflects our best judgment based on the information  available to us at the time
of preparation and the time and budget constraints  imposed by the client. It is
not  given  as  a  recommendation,  or  as  an  inducement,  for  any  financial
transaction and further, BK Associates, Inc. assumes no responsibility or legal


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January 29, 2001
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liability  for any  action  taken or not  taken by the  addressee,  or any other
party, with regard to the appraised equipment. By accepting this appraisal,  the
addressee agrees that BK Associates,  Inc. shall bear no such  responsibility or
legal  liability.  This  appraisal is prepared for the use of the  addressee and
shall not be  provided  to other  parties  without  the  express  consent of the
addressee.

                                          Sincerely,

                                          BK ASSOCIATES, INC.


                                          /S/ R.L. Britton
                                          -----------------------
                                          R. L. Britton
                                          Vice President
                                          ISTAT Senior Certified Appraiser

RLB/kf
Attachment



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                                    FIGURE 1
                                  AFT PORTFOLIO
                                   BASE VALUES

                                                          12/31/00    12/31/00
                                                          HALFTIME    MTC ADJ'D
        AIRCRAFT       SERIAL     MFG.                       BV          BV
          TYPE         NUMBER     DATE      ENGINE       ( $ MIL )    ( $ MIL )
          ----         ------     ----      ------       ---------    ---------

  1    A310-300         448      Feb-88  CF6-80C2A2        32.20        31.34
  2    A320-200         210      Jul-91  CFM56-5A1         26.00        26.52
  3    A320-200         221      Sep-91  CFM56-5A3         27.60        27.02
  4    A320-200         222      Oct-91  CFM56-5A3         27.60        26.50
  5    A320-200         231      Sep-91  CFM56-5A1         26.25        27.31
  6    A320-200         373      Jan-93  V2500-A1          28.60        32.04
  7    A320-200         737      Sep-97  CFM56-5B4         36.70        37.86
  8    A320-200         749      Sep-97  CFM56-5B4         36.70        36.00
  9    B737-300        28333     Aug-96  CFM56-3C1         29.60        30.01
  10   B737-300        28548     Dec-97  CFM56-3C1         31.85        31.46
  11   B737-300        28554     Dec-96  CFM56-3C1         30.40        29.89
  12   B737-300        28557     Mar-97  CFM56-3C1         31.00        30.35
  13   B737-300        28558     Apr-97  CFM56-3C1         31.10        30.44
  14   B737-300        28559     May-97  CFM56-3C1         31.25        30.69
  15   B737-300        28561     Jun-97  CFM56-3C1         31.35        31.20
  16   B737-300        28562     Jul-97  CFM56-3C1         31.40        31.28
  17   B737-300        28563     Aug-97  CFM56-3C1         31.50        30.75
  18   B737-300        28564     Nov-97  CFM56-3C1         31.75        31.95
  19   B737-300        28740     Jun-98  CFM56-3C1         32.60        32.54
  20   B737-400        25663     Nov-92  CFM56-3C1         25.70        24.64
  21   B737-400        25664     Nov-92  CFM56-3C1         25.70        25.32
  22   B737-400        28489     Nov-96  CFM56-3C1         31.70        31.15
  23   B737-400        28490     Nov-96  CFM56-3C1         31.70        30.68
  24   B737-400        28491     Nov-96  CFM56-3C1         31.70        31.05
  25   B767-200ER      23805     Jul-87  CF6-80C2-B2       32.00        31.53
  26   B767-200ER      23806     Aug-87  CF6-80C2-B2       32.00        30.95
  27   B767-300ER      25221     Aug-91  CF6-80C2B6F       54.80        53.31
  28   B767-300ER      25403     Jan-92  PW4060            56.80        56.40
  29   B767-300ER      29617     Mar-99  CF6-80C2B7F       82.20        82.32
  30   B767-300ER      30008     Mar-99  CF6-80C2B7F       82.20        82.20
  31   MD83            49398     Nov-86  JT8D-219          15.75        15.83
  32   MD83            49791     Sep-89  JT8D-219          19.00        19.35
  33   MD83            53198     Apr-91  JT8D-219          22.00        20.85
  34   MD83            53199     Mar-92  JT8D-219          23.20        22.14
  35   DC10-30         46584     Feb-80  CF6-50C2          17.00        15.29
  36   DC10-30         48292     Feb-82  CF6-50C2          19.10        16.67

                                          TOTALS . . .   1188.00      1174.81




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