MORTEN BEYER & AGNEW
________________________________________________________________________________

                            AVIATION CONSULTING FIRM


                                  Appraisal of
                              36 Various Aircraft



                                 PREPARED FOR:

                             Aircraft Finance Trust



                                FEBRUARY 8, 2000



      Washington, D.C.                                        London
   8180 Greensboro Drive                               Lahinch 62, Lashmere
        Suite 1000                                          Copthorne
   McLean, Virginia 22102                                  West Sussex
    Phone +703 847 6598                                Phone + 44 1342 716248
     Fax + 703 847 1911                                 Fax + 44 1342 718967


MBA
<PAGE>

I.  INTRODUCTION AND EXECUTIVE SUMMARY

MORTEN BEYER & AGNEW,  INC. (MBA) has been retained by Aircraft Finance Trust to
determine the Current Base and Market Values of eleven B737-300,  five B737-400,
two B767-200ER,  four B767-300ER,  two DC10-30, four MD-83, seven A320-200,  and
one A310-300 in their present configuration as passenger aircraft as of December
31, 1999. The aircraft are further identified in Section II of this report.

In  performing  this  valuation,  MBA did not  inspect  the  aircraft  or  their
historical  maintenance  documentation,  and we  relied  solely  on  information
provided to us by UniCapital Air Group.  Based on the  information  set forth in
this  report,  it is our opinion  that the  Adjusted  Current  Base Value of the
aircraft in this  portfolio  $1,277,961,000  (and,  the Adjusted  Current Market
Value is $1,222,941,000) as noted in Section III and IV.

MBA uses the definition of certain terms,  such as Current Market Value and Base
Value,  as  promulgated  by the Appraisal  Program of  International  Society of
Transport  Aircraft  Trading  (ISTAT),  a non-profit  association  of management
personnel from banks, leasing companies, airlines,  manufacturers,  brokers, and
others who have a vested  interest in the commercial  aviation  industry and who
have  established  a  technical  and  ethical  certification  program for expert
appraisers.

ISTAT defines Current Market Value (CMV) as the appraiser's  opinion of the most
likely  trading  price  that  may be  generated  for an  aircraft  under  market
conditions  that are perceived to exist at the time in question.  Current Market
Value  assumes that the aircraft is valued for its highest,  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.

The ISTAT definition of Base Value (BV) has,  essentially,  the same elements of
Market  Value  except  that the  market  circumstances  are  assumed  to be in a
reasonable  state of  equilibrium.  Thus,  Base Value  pertains to an  idealized
aircraft and market  combination,  but will not  necessarily  reflect the actual
Current  Market  Value  of  the  aircraft  in  question.  BV is  founded  in the
historical trend of values and is generally used to analyze historical values or
to project future values.

<PAGE>

II.  AIRCRAFT DETAILS


------------------------------------------------------------------------------
       Aircraft Type    Serial Number  Manufacture Date      Operator
------------------------------------------------------------------------------
         A310-300            448            Feb-88        Royal Aviation
------------------------------------------------------------------------------
         A320-200            210            Jul-91             CAI
------------------------------------------------------------------------------
         A320-200            221            Sep-91           AirTours
------------------------------------------------------------------------------
         A320-200            222            Oct-91           AirTours
------------------------------------------------------------------------------
         A320-200            231            Sep-91             CAI
------------------------------------------------------------------------------
         A320-200            373            Jan-93        Transmeridian
------------------------------------------------------------------------------
         A320-200            737            Sep-97             Star
------------------------------------------------------------------------------
         A320-200            749            Sep-97             Star
------------------------------------------------------------------------------
         B737-300           28333           Aug-96            Virgin
------------------------------------------------------------------------------
         B737-300           28548           Dec-97              BA
------------------------------------------------------------------------------
         B737-300           28554           Dec-96       British Midland
------------------------------------------------------------------------------
         B737-300           28557           Mar-97       British Midland
------------------------------------------------------------------------------
         B737-300           28558           Apr-97       British Midland
------------------------------------------------------------------------------
         B737-300           28559           May-97           Unknown
------------------------------------------------------------------------------
         B737-300           28561           Jun-97        China Eastern
------------------------------------------------------------------------------
         B737-300           28562           Jul-97        China Eastern
------------------------------------------------------------------------------
         B737-300           28563           Aug-97           Frontier
------------------------------------------------------------------------------
         B737-300           28564           Nov-97         Transbrasil
------------------------------------------------------------------------------
         B737-300           28740           Jun-98             AWA
------------------------------------------------------------------------------
         B737-400           25663           Nov-92         Jet Airways
------------------------------------------------------------------------------
         B737-400           25664           Nov-92         Jet Airways
------------------------------------------------------------------------------
         B737-400           28489           Nov-96            Virgin
------------------------------------------------------------------------------
         B737-400           28490           Nov-96           Istanbul
------------------------------------------------------------------------------
         B737-400           28491           Nov-96           Istanbul
------------------------------------------------------------------------------
        B767-200ER          23805           Jul-87            Varig
------------------------------------------------------------------------------
        B767-200ER          23806           Jul-87            Varig
------------------------------------------------------------------------------
        B767-300ER          25221           Jul-91          Britannia
------------------------------------------------------------------------------
        B767-300ER          25403           Jan-92             TWA
------------------------------------------------------------------------------
        B767-300ER          29617           Mar-99           Air 2000
------------------------------------------------------------------------------
        B767-300ER          30008           May-99           Alitalia
------------------------------------------------------------------------------
          DC10-30           46584           Feb-80         Continental
------------------------------------------------------------------------------
          DC10-30           48292           Feb-82         Continental
------------------------------------------------------------------------------
           MD-83            49398           Nov-86           Spanair
------------------------------------------------------------------------------
           MD-83            49791           Sep-89           Spanair
------------------------------------------------------------------------------
           MD-83            53198           Apr-91           Spanair
------------------------------------------------------------------------------
           MD-83            53199           Mar-92           Eurofly
------------------------------------------------------------------------------

                                       2
<PAGE>

III.  VALUATION (CURRENT BASE VALUE)

In developing  the Current Market Value of these  aircraft,  MBA did not inspect
the  aircraft  or their  historical  maintenance  documentation,  but  relied on
partial  information  supplied  by  the  Client.   Therefore,  we  used  certain
assumptions that are generally accepted industry practice to calculate the value
of aircraft  when more  detailed  information  is not  available.  The principal
assumptions for aircraft is as follows:

    1.   The aircraft are in good overall condition.

    2.   The overhaul  status of the airframe,  engines,  landing gear and other
         major  components  are  the  equivalent  of  mid-time/mid-life   unless
         otherwise specified.

    3.   The  historical  maintenance   documentation  has  been  maintained  to
         acceptable international standards.

    4.   The  specifications  of the  aircraft  are  those  most  common  for an
         aircraft of its type and vintage.

    5.   The aircraft are in a standard airline configuration.

    6.   The aircraft are current as to all Airworthiness Directives and Service
         Bulletins.

    7.   The modification  status is comparable to that most common for aircraft
         of the type and vintage.

    8.   The utilization is comparable to industry averages.

    9.   There are no histories of accident or incident damage.

    10.  No accounting is made for lease obligations or terms of ownership.

    11.  MBA applies  credits  for higher  MTOW  aircraft on a scale that varies
         with year of manufacture.



                                       3
<PAGE>


--------------------------------------------------------------------------------
                                                      Total     Adjusted Current
    Aircraft Type  Serial Number   Current Base     Adjustments      Base
                                       Value                         Value
------------------------------------------------------------------------------
       A310-300       448           $35,310,000       $320,000     $35,630,000
--------------------------------------------------------------------------------
       A320-200       210           $30,280,000       -$35,000     $30,245,000
--------------------------------------------------------------------------------
       A320-200       221           $30,520,000       $186,000     $30,706,000
--------------------------------------------------------------------------------
       A320-200       222           $30,640,000       $190,000     $30,830,000
--------------------------------------------------------------------------------
       A320-200       231           $30,520,000       $259,000     $30,779,000
--------------------------------------------------------------------------------
       A320-200       373           $32,480,000       $279,000     $32,759,000
--------------------------------------------------------------------------------
       A320-200       737           $40,450,000       $332,000     $40,782,000
--------------------------------------------------------------------------------
       A320-200       749           $40,450,000       $332,000     $40,782,000
--------------------------------------------------------------------------------
       B737-300      28333          $30,030,000       $452,000     $30,482,000
--------------------------------------------------------------------------------
       B737-300      28548          $32,820,000             $0     $32,820,000
--------------------------------------------------------------------------------
       B737-300      28554          $30,690,000       $645,000     $31,335,000
--------------------------------------------------------------------------------
       B737-300      28557          $31,220,000       $690,000     $31,910,000
--------------------------------------------------------------------------------
       B737-300      28558          $31,400,000       $644,000     $32,044,000
--------------------------------------------------------------------------------
       B737-300      28559          $31,570,000       $644,000     $32,214,000
--------------------------------------------------------------------------------
       B737-300      28561          $31,750,000       $483,000     $32,233,000
--------------------------------------------------------------------------------
       B737-300      28562          $31,930,000       $483,000     $32,413,000
--------------------------------------------------------------------------------
       B737-300      28563          $32,110,000       $483,000     $32,593,000
--------------------------------------------------------------------------------
       B737-300      28564          $32,640,000       $483,000     $33,123,000
--------------------------------------------------------------------------------
       B737-300      28740          $33,950,000             $0     $33,950,000
--------------------------------------------------------------------------------
       B737-400      25663          $26,770,000      -$120,000     $26,650,000
--------------------------------------------------------------------------------
       B737-400      25664          $26,770,000      -$106,000     $26,664,000
--------------------------------------------------------------------------------
       B737-400      28489          $33,050,000             $0     $33,050,000
--------------------------------------------------------------------------------
       B737-400      28490          $33,050,000             $0     $33,050,000
--------------------------------------------------------------------------------
       B737-400      28491          $33,050,000             $0     $33,050,000
--------------------------------------------------------------------------------
      B767-200ER     23805          $31,900,000      -$225,000     $31,675,000
--------------------------------------------------------------------------------
      B767-200ER     23806          $31,900,000      -$199,000     $31,701,000
--------------------------------------------------------------------------------
      B767-300ER     25221          $60,010,000       $789,000     $60,799,000
--------------------------------------------------------------------------------
      B767-300ER     25403          $61,520,000     $1,511,000     $63,031,000
--------------------------------------------------------------------------------
      B767-300ER     29617          $88,320,000     $1,575,000     $89,895,000
--------------------------------------------------------------------------------
      B767-300ER     30008          $89,070,000     $1,260,000     $90,330,000
--------------------------------------------------------------------------------
       DC10-30       46584          $19,260,000      -$250,000     $19,010,000
--------------------------------------------------------------------------------
       DC10-30       48292          $21,500,000       $348,000     $21,848,000
--------------------------------------------------------------------------------
        MD-83        49398          $19,480,000       $266,000     $19,746,000
--------------------------------------------------------------------------------
        MD-83        49791          $22,190,000      -$279,000     $21,911,000
--------------------------------------------------------------------------------
        MD-83        53198          $23,870,000      -$554,000     $23,316,000
--------------------------------------------------------------------------------
        MD-83        53199          $24,890,000      -$285,000     $24,605,000
--------------------------------------------------------------------------------
              Total              $1,267,360,000    $10,601,000  $1,277,961,000
--------------------------------------------------------------------------------


Legend -      Total adjustments equals MTOW credits plus maintenance adjustments
              as presented in section V.


                                       4
<PAGE>

IV.  VALUATION (CURRENT MARKET VALUE)


--------------------------------------------------------------------------------
                                                                     Adjusted
                                                       Total          Current
    Aircraft Type   Serial Number   Current Market   Adjustments      Market
                                        Value                         Value
--------------------------------------------------------------------------------
       A310-300          448          $28,248,000      $320,000     $28,568,000
--------------------------------------------------------------------------------
       A320-200          210          $30,280,000      -$35,000     $30,245,000
--------------------------------------------------------------------------------
       A320-200          221          $30,520,000      $186,000     $30,706,000
--------------------------------------------------------------------------------
       A320-200          222          $30,640,000      $190,000     $30,830,000
--------------------------------------------------------------------------------
       A320-200          231          $30,520,000      $259,000     $30,779,000
--------------------------------------------------------------------------------
       A320-200          373          $32,480,000      $279,000     $32,759,000
--------------------------------------------------------------------------------
       A320-200          737          $40,450,000      $332,000     $40,782,000
--------------------------------------------------------------------------------
       A320-200          749          $40,450,000      $332,000     $40,782,000
--------------------------------------------------------------------------------
       B737-300         28333         $27,027,000      $452,000     $27,479,000
--------------------------------------------------------------------------------
       B737-300         28548         $29,538,000            $0     $29,538,000
--------------------------------------------------------------------------------
       B737-300         28554         $27,621,000      $645,000     $28,266,000
--------------------------------------------------------------------------------
       B737-300         28557         $28,098,000      $690,000     $28,788,000
--------------------------------------------------------------------------------
       B737-300         28558         $28,260,000      $644,000     $28,904,000
--------------------------------------------------------------------------------
       B737-300         28559         $28,413,000      $644,000     $29,057,000
--------------------------------------------------------------------------------
       B737-300         28561         $28,575,000      $483,000     $29,058,000
--------------------------------------------------------------------------------
       B737-300         28562         $28,737,000      $483,000     $29,220,000
--------------------------------------------------------------------------------
       B737-300         28563         $28,899,000      $483,000     $29,382,000
--------------------------------------------------------------------------------
       B737-300         28564         $29,376,000      $483,000     $29,859,000
--------------------------------------------------------------------------------
       B737-300         28740         $30,555,000            $0     $30,555,000
--------------------------------------------------------------------------------
       B737-400         25663         $24,093,000     -$120,000     $23,973,000
--------------------------------------------------------------------------------
       B737-400         25664         $24,093,000     -$106,000     $23,987,000
--------------------------------------------------------------------------------
       B737-400         28489         $29,745,000            $0     $29,745,000
--------------------------------------------------------------------------------
       B737-400         28490         $29,745,000            $0     $29,745,000
--------------------------------------------------------------------------------
       B737-400         28491         $29,745,000            $0     $29,745,000
--------------------------------------------------------------------------------
      B767-200ER        23805         $30,305,000     -$225,000     $30,080,000
--------------------------------------------------------------------------------
      B767-200ER        23806         $30,305,000     -$199,000     $30,106,000
--------------------------------------------------------------------------------
      B767-300ER        25221         $54,009,000      $789,000     $54,798,000
--------------------------------------------------------------------------------
      B767-300ER        25403         $55,368,000    $1,511,000     $56,879,000
--------------------------------------------------------------------------------
      B767-300ER        29617         $79,488,000    $1,575,000     $81,063,000
--------------------------------------------------------------------------------
      B767-300ER        30008         $80,163,000    $1,260,000     $81,423,000
--------------------------------------------------------------------------------
       DC10-30          46584         $17,334,000     -$250,000     $17,084,000
--------------------------------------------------------------------------------
       DC10-30          48292         $19,350,000      $348,000     $19,698,000
--------------------------------------------------------------------------------
        MD-83           49398         $18,506,000      $266,000     $18,772,000
--------------------------------------------------------------------------------
        MD-83           49791         $21,081,000     -$279,000     $20,802,000
--------------------------------------------------------------------------------
        MD-83           53198         $66,677,000     -$554,000     $66,123,000
--------------------------------------------------------------------------------
        MD-83           53199         $23,646,000     -$285,000     $23,361,000
--------------------------------------------------------------------------------
               Total               $1,212,340,000   $10,601,000  $1,222,941,000
--------------------------------------------------------------------------------


Legend            -  CMV  equals  MAF  times  Base  Value  (MAF  is  the  Market
                  Adjustment  Factor).   MAF  for  A310-200  is  80%  (100%  for
                  A320-200;  90% for B737-300 & -400, DC10-30 & B767-300ER;  95%
                  for B767-200ER & MD-83).

                                       5
<PAGE>

V.  MAINTENANCE ADJUSTMENTS & MTOW CREDITS

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                                                 Engine      Engine   Engine      Engine
 Aircraft  Serial   Int. MX   Int. MX    Heavy MX    Heavy MX     LLP         LLP      Shop        Shop
   Type    Number  Potential   Actual    Potential    Actual    Potential   Actual   Potential    Actual
--------------------------------------------------------------------------------------------------------
<S>         <C>   <C>        <C>        <C>         <C>        <C>            <C>   <C>            <C>

 A310-300    448   $300,000        $0   $1,250,000  $208,000   $1,700,000     $0    $1,100,000     $0
--------------------------------------------------------------------------------------------------------
 A320-200    210   $200,000        $0   $500,000    -$150,000  $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    221   $200,000        $0   $500,000          $0   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    222   $200,000        $0   $500,000          $0   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    231   $200,000        $0   $500,000     $50,000   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    373   $200,000        $0   $500,000     -$7,000   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    737   $200,000        $0   $500,000          $0   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 A320-200    749   $200,000        $0   $500,000          $0   $1,250,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28333  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28548  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28554  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28557  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28558  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28559  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28561  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28562  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28563  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28564  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-300   28740  $150,000        $0   $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-400   25663  $175,000        $0   $600,000    -$310,000  $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-400   25664  $175,000        $0   $600,000    -$296,000  $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-400   28489  $175,000        $0   $600,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-400   28490  $175,000        $0   $600,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
 B737-400   28491  $175,000        $0   $600,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
B767-200ER  23805  $200,000  -$67,000   $900,000          $0   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
B767-200ER  23806  $200,000  -$44,000   $900,000          $0   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
B767-300ER  25221  $200,000  -$111,000  $900,000    $200,000   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
B767-300ER  25403  $200,000        $0   $900,000    $675,000   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
B767-300ER  29617  $200,000        $0   $900,000          $0   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
B767-300ER  30008  $200,000        $0   $900,000          $0   $2,000,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
  DC10-30   46584  $500,000   $63,000   $1,000,000  -$417,000  $2,550,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
  DC10-30   48292  $500,000  -$42,000   $1,000,000  $278,000   $2,550,000     $0    $1,000,000     $0
---------------------------------------------------------------------------------------------------------
   MD-83    49398  $250,000    $8,000   $500,000    $258,000   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
   MD-83    49791  $250,000  -$217,000  $500,000          $0   $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
   MD-83    53198  $250,000  -$142,000  $500,000    -$367,000  $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
   MD-83    53199  $250,000   -$8,000   $500,000    -$275,000  $1,100,000     $0    $750,000       $0
---------------------------------------------------------------------------------------------------------
        TOTAL    $7,425,000 ($560,000)  $22,650,000 ($153,000) $49,550,000    $0    $29,350,000    $0
---------------------------------------------------------------------------------------------------------
</TABLE>


                                       6
<PAGE>
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
                                                                         Total from
 Aircraft Type   Serial Number LG Potential    LG Actual       MTOW        previous        Total
                                                                            TABLE      Adjustment
----------------------------------------------------------------------------------------------------
<S>                  <C>          <C>        <C>            <C>             <C>         <C>

    A310-300          448         $200,000    -$68,000        $180,000      $208,000      $320,000
----------------------------------------------------------------------------------------------------
    A320-200          210         $130,000     -$9,000        $124,000     -$150,000      -$35,000
----------------------------------------------------------------------------------------------------
    A320-200          221         $130,000    -$30,000        $216,000            $0      $186,000
----------------------------------------------------------------------------------------------------
    A320-200          222         $130,000    -$26,000        $216,000            $0      $190,000
----------------------------------------------------------------------------------------------------
    A320-200          231         $130,000     -$7,000        $216,000       $50,000      $259,000
----------------------------------------------------------------------------------------------------
    A320-200          373         $130,000     $31,000        $255,000       -$7,000      $279,000
----------------------------------------------------------------------------------------------------
    A320-200          737         $130,000          $0        $332,000            $0      $332,000
----------------------------------------------------------------------------------------------------
    A320-200          749         $130,000          $0        $332,000            $0      $332,000
----------------------------------------------------------------------------------------------------
    B737-300         28333        $120,000          $0        $452,000            $0      $452,000
----------------------------------------------------------------------------------------------------
    B737-300         28548        $120,000          $0              $0            $0            $0
----------------------------------------------------------------------------------------------------
    B737-300         28554        $120,000          $0        $645,000            $0      $645,000
----------------------------------------------------------------------------------------------------
    B737-300         28557        $120,000          $0        $690,000            $0      $690,000
----------------------------------------------------------------------------------------------------
    B737-300         28558        $120,000          $0        $644,000            $0      $644,000
----------------------------------------------------------------------------------------------------
    B737-300         28559        $120,000          $0        $644,000            $0      $644,000
----------------------------------------------------------------------------------------------------
    B737-300         28561        $120,000          $0        $483,000            $0      $483,000
----------------------------------------------------------------------------------------------------
    B737-300         28562        $120,000          $0        $483,000            $0      $483,000
----------------------------------------------------------------------------------------------------
    B737-300         28563        $120,000          $0        $483,000            $0      $483,000
----------------------------------------------------------------------------------------------------
    B737-300         28564        $120,000          $0        $483,000            $0      $483,000
----------------------------------------------------------------------------------------------------
    B737-300         28740        $120,000          $0              $0            $0            $0
----------------------------------------------------------------------------------------------------
    B737-400         25663        $135,000          $0        $190,000     -$310,000     -$120,000
----------------------------------------------------------------------------------------------------
    B737-400         25664        $135,000          $0        $190,000     -$296,000     -$106,000
----------------------------------------------------------------------------------------------------
    B737-400         28489        $135,000          $0              $0            $0            $0
----------------------------------------------------------------------------------------------------
    B737-400         28490        $135,000          $0              $0            $0            $0
----------------------------------------------------------------------------------------------------
    B737-400         28491        $135,000          $0              $0            $0            $0
----------------------------------------------------------------------------------------------------
   B767-200ER        23805        $173,000   -$158,000              $0      -$67,000     -$225,000
----------------------------------------------------------------------------------------------------
   B767-200ER        23806        $173,000   -$155,000              $0      -$44,000     -$199,000
----------------------------------------------------------------------------------------------------
   B767-300ER        25221        $173,000          $0        $700,000       $89,000      $789,000
----------------------------------------------------------------------------------------------------
   B767-300ER        25403        $173,000          $0        $836,000      $675,000    $1,511,000
----------------------------------------------------------------------------------------------------
   B767-300ER        29617        $173,000          $0      $1,575,000            $0    $1,575,000
----------------------------------------------------------------------------------------------------
   B767-300ER        30008        $173,000          $0      $1,260,000            $0    $1,260,000
----------------------------------------------------------------------------------------------------
    DC10-30          46584        $230,000          $0        $104,000     -$354,000     -$250,000
----------------------------------------------------------------------------------------------------
    DC10-30          48292        $230,000          $0        $112,000      $236,000      $348,000
----------------------------------------------------------------------------------------------------
     MD-83           49398        $108,000          $0              $0      $266,000      $266,000
----------------------------------------------------------------------------------------------------
     MD-83           49791        $108,000    -$62,000              $0     -$217,000     -$279,000
----------------------------------------------------------------------------------------------------
     MD-83           53198        $108,000    -$45,000              $0     -$509,000     -$554,000
----------------------------------------------------------------------------------------------------
     MD-83           53199        $108,000     -$2,000              $0     -$283,000     -$285,000
----------------------------------------------------------------------------------------------------
             TOTAL              $5,035,000   ($531,000)    $11,845,000     ($713,000)  $10,601,000
----------------------------------------------------------------------------------------------------

</TABLE>

                                       7
<PAGE>


VI.  AIRCRAFT PROFILES & CURRENT MARKET CONDITIONS

Airbus A319/320/321 Series Aircraft

The A320 was Airbus'  first all new design since the launch of the original A300
in 1971. The program was initiated in 1983 and logged almost 400 orders prior to
first  delivery in 1988.  The A320s are now offered with both the CFM-56 and the
IAE V-2500 engine, with the CFM version having a long head start.

The A321, a stretched  version  designed to directly  challenge  the 757-200 and
bridge the gap between the A320 and  A330/340,  was launched in 1989.  The first
deliveries  were made to Lufthansa  and  Alitalia in early 1994.  Seating in the
A321 was increased to 186 (and more in all-coach  configurations) from a nominal
150 in the A320 and the gross weight increased by 19,200 pounds. As of September
1999, there were 139 A321s delivered and 125 on order.

The A319 is the  opposite  of the  A321--that  is, a  truncated  version  of the
original   aircraft.   The  program  was  officially   launched  with  a  modest
six-aircraft  order by  leasing  giant  ILFC in late  1992.  Prospects  were not
encouraging as more than one year went by before  subsequent orders were placed.
However,  Air Canada  provided a major boost to Airbus with an order of 34 A319s
in April 1994.  Ironically,  the carrier had reportedly decided against ordering
new aircraft to replace its aging DC-9 fleet when Fokker Aircraft  convinced the
carrier to re-examine the benefits of new airframes.  ACA Chairman Hollis Harris
agreed, but Fokker lost the battle to its European  competitor.  As of September
1999, 622 A319s have been ordered, 155 delivered, and 448 are on order.

The Northwest and Air Canada situations are significant due to the Airbus family
concept factor, (common type ratings and minimal differences training for pilots
of the A319 through A340 aircraft), which is the core of the manufacturer's goal
to develop entire fleets with major carriers.  Air Canada,  which operates A320s
already,  chose this Airbus  concept with both the A319 order and an eight-plane
A340 order as well.  Northwest Airlines,  which operates 69 A320s (and has 13 on
order)  ordered 50 A319s and switched their A340 order for 16 A330s for delivery
beyond 2000.  Other  carriers,  including Air France and  Lufthansa,  operate at

                                       8
<PAGE>

least  three  of  these  five  types,  but  the  European   influence  may  tilt
decision-makers at airlines such as these. Airbus believes its concept will give
its new designs  significant  advantages over Boeing aircraft,  and the 1997 and
1998 order books indicate it is doing just that. MBA believes the combination of
extremely efficient designs and the inherent savings in training and other costs
make the Airbus family an attractive  avenue for an entire fleet  refurbishment,
as US Airways' commitment for 400-some aircraft appears to justify.

The A320 family  incorporates an increased amount of composites in its secondary
structure compared to older jets, a complete  fly-by-wire  control system, and a
computerized  flight management system which, when engaged,  virtually precludes
putting the aircraft  into stalls or other extreme  conditions.  This system has
been  blamed by some for two early  incidents  in which  the  crews  placed  the
aircraft  in  an  untenable  position  close  to  the  ground  with  the  system
disconnected  and from which it was unable to recover.  These two aircraft  were
totally cleared by the airworthiness  authorities,  as well as one involved in a
third  incident in which the crew made a  below-minimum  approach in bad weather
and struck high  ground.  This third  aircraft had no ground  proximity  warning
device  installed,  a device  now  required  by the French  government  and long
required by many others.  In general,  all these components have held up well in
service, and the reliability of the aircraft has been excellent.

United's 1994 order for 50 A320s,  plus an option for 50 more was announced as a
727 replacement, of which United still operates 53 and has 33 A320s on order. It
is obvious  that other  airlines  will use their large  orders to surplus  older
aircraft  as well.  Alitalia,  with 22 A321s in service  and three on order,  is
replacing its stable of MD-82s. As mentioned,  Air Canada's  commitments for the
A319 will  eventually go to reduce the fleet count of DC-9s.  Thus the advent of
the A320 family is hastening the retirement of older,  far less efficient  jets.
The A320s  currently in service are  operating at seat mile costs as low as half
of that for older aircraft. The combination of all the above factors leads us to
believe the A320 family will enjoy a long  production run and in-service  useful
life, with strong residual values.

The A320 also  offers  the  advantage  of being  able to carry  seven LD-3 cargo
containers--a  feat not even the 767 can perform.  The fuselage is approximately
10 inches wider than that of the 727/737/757  series,  offering wider aisles and

                                       9
<PAGE>

roomier seats--a  feature much appreciated by passengers.  There are no cargo or
Combi models  currently  offered by Airbus,  although  such a  configuration  is
obviously  possible.  The exception is the A300 `Beluga'  outsized special cargo
aircraft, which is already being leased for commercial applications.

ECONOMICS

The A320/321 vies with the 757 for top honors as the most efficient  aircraft in
service.  Great fuel  efficiency,  new technology  design and low operating cost
parameters  all combine to give these  aircraft among the lowest seat mile costs
of any being built or in service. The MBA Model indicates that both will produce
very satisfactory  operating and net ratios well into the next century. The A319
will not be quite as favorable,  as is the case with most truncated  derivatives
(747SP,  L-1011-500).  They will,  however,  provide enough incentive for larger
carriers  (likely with Airbus  aircraft  already) to order and place them at the
bottom of the capacity scale in their fleets.

STATISTICS

        ------------------------------------------------------------------------
                            A320-200 Fleet Statistics
                              (as of November 1999)
        ------------------------------------------------------------------------
                                                       A320-200
        ------------------------------------------------------------------------
        Number of Ordered Aircraft                      1,397
        ------------------------------------------------------------------------
        Number of Delivered Aircraft                     757
        ------------------------------------------------------------------------
        Number of Cancelled Aircraft                     132
        ------------------------------------------------------------------------
        Backlog                                          508
        ------------------------------------------------------------------------
        Options                                          160
        ------------------------------------------------------------------------
        Delivered in the last 12 months                   92
        ------------------------------------------------------------------------
        Number of Destroyed Aircraft                      4
        ------------------------------------------------------------------------
        Number of Retired Aircraft                        0
        ------------------------------------------------------------------------
        Number of Parked Aircraft                         5
        ------------------------------------------------------------------------
        Number  of Aircraft in Operation                 751
        ------------------------------------------------------------------------
        Number of Operators                               83
        ------------------------------------------------------------------------
        Number of Leased Aircraft                        440
        ------------------------------------------------------------------------
        Number of Owned Aircraft                         311
        ------------------------------------------------------------------------
        Fleet Average Hours                             17,423
        ------------------------------------------------------------------------
        Fleet Average Cycles                            10,449
        ------------------------------------------------------------------------
        Average Age                                      5.6
        ------------------------------------------------------------------------

A320-200 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 5
TOTAL NUMBER ON MARKET, NOVEMBER/99: 8


                                       10
<PAGE>

Airbus A310-200/-300 Aircraft

The A310 entered service in 1982, and 255 have been delivered.  The earlier -200
version has been  superseded  by the higher  gross  weight and longer range -300
model.  The  aircraft  are offered  with both the GE and P&W power  plants,  the
former having about a two-thirds market share. The A310 was primarily ordered by
European carriers, and the only ones in service in North America are those Delta
took over from Pan Am (21 - quickly  returned  to  Airbus)  and those  bought by
FedEx to convert to cargo.  The A310 has appealed to those airlines wanting full
widebody capability with minimum seating capacity. It is generally operated with
about 218 seats,  although Pan Am used only 192, and Delta  knocked that down to
177, contributing to poor economics.

In an economic  comparison,  the A310 is equal to or better than a 767-200,  but
will be more  costly per seat mile than the  larger  capacity  767-300.  Various
gross weight options are offered up to 361,600 pounds, but this is almost 50,000
pounds below the maximum of 412,000 permitted on a hi-gross 767-300.  This means
the Boeing can carry more payload further than an A310.

The A310 is also  offered in a  cargo/combi  version,  but no one operates it in
this mode. Like its brother the A300, this is changing as operators find success
with the  freighter  version.  FedEx has  converted  41 aircraft  acquired  from
Lufthansa, Delta others and is very satisfied with them.

The A310 has had a boost from the  current  trend  toward use of ETOPS  twins on
over-ocean  routes,  replacing the larger 747s and  DC-10/L-1011s.  This permits
airlines to serve long thin routes more frequently and economically.

The A310 is a two-crew aircraft with a glass cockpit and incorporates a standard
tail-tank,  which allows  in-flight  center of gravity  control for optimum fuel
efficiency.  The  aircraft  is  too  new  to  have  experienced  aging  aircraft
maintenance problems. The A310 fully complies with Stage 3 noise criteria.


                                       11
<PAGE>

ECONOMICS

The limited  seating  capacity of the A310 aircraft  gives it a relatively  high
cost per seat-mile and,  therefore,  a thin earnings potential in the MBA Model.
The lower  cost per  aircraft  mile and lesser  capacity  is  justified  by many
operators because of the nature of their route systems. However, in head-to-head
competition,  the A310 (and the 767-200 as well) is at a disadvantage because of
its lack of leverage.

The longer  range  model of the A310  enjoys a stronger  market than the earlier
version,  and none have been  converted to freighters as of this date,  however,
look for conversion in five to ten years.

STATISTICS

        -------------------------------------------------------------------
                              A310 Fleet Statistics
                              (as of November 1999)
        -------------------------------------------------------------------
        Number of Ordered Aircraft                 282
         ------------------------------------------------------------------
        Number of Delivered Aircraft               255
        -------------------------------------------------------------------
        Number of Cancelled Aircraft                21
        -------------------------------------------------------------------
        Backlog                                     6
        -------------------------------------------------------------------
        Options                                     2
        -------------------------------------------------------------------
        Delivered in the last 12 months             0
        -------------------------------------------------------------------
        Number of Destroyed Aircraft                4
        -------------------------------------------------------------------
        Number of Retired Aircraft                  2
        -------------------------------------------------------------------
        Number of Parked Aircraft                   16
        -------------------------------------------------------------------
        Number  of Aircraft in Operation           249
        -------------------------------------------------------------------
        Number of Operators                         61
        -------------------------------------------------------------------
        Number of Leased Aircraft                  105
        -------------------------------------------------------------------
        Number of Owned Aircraft                   144
        -------------------------------------------------------------------
        Fleet Average Hours                       32,318
        -------------------------------------------------------------------
        Fleet Average Cycles                      13,079
        -------------------------------------------------------------------
        Average Age                                11.2
        -------------------------------------------------------------------

A310-300 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 7
TOTAL NUMBER ON MARKET, NOVEMBER/99: 3


                                       12
<PAGE>

Boeing B737-300/-400/-500 Series Aircraft

As Stage 3 noise rules closed in at last on the 737-200,  Boeing  re-engined the
aircraft  with the CFM-56  engine,  which met the rules and also offered  higher
power and the  opportunity  to stretch both the fuselage  (capacity) in the -400
model and the range. Boeing also built the model -500, which kept the basic -200
configuration.  The  737-300  was  introduced  in the early  1980s,  and entered
service in 1984,  several  years  behind the MD-80 which was  already  achieving
extensive orders, again giving the lead to Douglas.

As of  December  1999,  Boeing  had  delivered  1,987  of  this  re-engined  2nd
Generation series, thus continuing the successful  tradition of the 737. Success
was quick for the  B737-300/-400/-500  aircraft  as they  found  homes in fleets
already populated with the -100s and -200s. The aircraft particularly suited the
deregulated   American  market,   where  smaller  planes  fitted   hub-and-spoke
operations. Overall, more than 160 airlines have selected the 2nd generation 737
to meet their  growth/replacement  needs.  As airline  consolidation  continues,
however,  and as limited slot,  gate,  runway,  and terminal  facilities  impede
growth,  we look to the airlines to turn to larger aircraft to meet their needs.
This, in short, means that not all-737 operators will upgrade with the newer 3rd
generation    (-600/-700/-800/-900)    models.    The    introduction   of   the
-600/-700/-800/-900  series terminated incoming orders for the second generation
B737 aircraft.  Orders for this 3rd generation now stand at 1,302.  We suspect a
good number of the orders for the  -700/-800  will be  converted  to the -900 as
time goes by. Eighty percent of American's 630-plane commitment to Boeing is for
next generation B737 aircraft.

The  737-300/-400/-500  series is fully  compliant  with  all-current  noise and
environmental regulations, and has a wide margin of tolerance.

ECONOMICS

The  MBA  Model   indicates  good  operating   economics  for  the  737-300  and
particularly  the higher capacity -400 during the forecast  period.  The -500 is
quite  marginal  on a  comparable  basis due to its lack of seat  capacity  and,
therefore, lack of earning power. It was built to be a niche aircraft, and it is
going to have to stay in its niche.


                                       13
<PAGE>

STATISTICS


        ------------------------------------------------------------------------
                         737-300/-400/-500/700 Fleet Statistics
                                 (as of November 1999)
         -----------------------------------------------------------------------
                                           B737-300      B737-400      B737-500
        ------------------------------------------------------------------------
        Number of Ordered Aircraft          1,257          530            443
        ------------------------------------------------------------------------
        Number of Delivered Aircraft        1,110          483            389
        ------------------------------------------------------------------------
        Number of Cancelled Aircraft         145            44            54
        ------------------------------------------------------------------------
        Backlog                               2             3              0
        ------------------------------------------------------------------------
        Options                               0             17            10
        ------------------------------------------------------------------------
        Delivered in the last 12 months       33            11             7
        ------------------------------------------------------------------------
        Number of Destroyed Aircraft          9             4              1
        ------------------------------------------------------------------------
        Number of Retired Aircraft            0             0              0
        ------------------------------------------------------------------------
        Number of Parked Aircraft             14            8              1
        ------------------------------------------------------------------------
        Number  of Aircraft in Operation    1,100          480            388
        ------------------------------------------------------------------------
        Number of Operators                  120            67            39
        ------------------------------------------------------------------------
        Number of Leased Aircraft            743           308            219
        ------------------------------------------------------------------------
        Number of Owned Aircraft             357           172            169
        ------------------------------------------------------------------------
        Fleet Average Hours                 28,231        21,142        18,491
        ------------------------------------------------------------------------
        Fleet Average Cycles                19,719        14,229        14,900
        ------------------------------------------------------------------------
        Average Age                          9.0           6.9            6.3
        ------------------------------------------------------------------------

B737-300 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 13
TOTAL NUMBER ON MARKET, NOVEMBER/99: 27

B737-400 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 5
TOTAL NUMBER ON MARKET, NOVEMBER/99: 15



                                       14
<PAGE>


Boeing B767-200/-300/-400 Aircraft

The  twin-aisle  semi-widebody  767 was launched in 1978 and entered  service in
1982.  The  aircraft has  undergone  significant  development  in terms of gross
weight and  capacity,  affecting  payload  and range.  The  initial  model,  the
767-200,  offered a MGTOW of 280,000  pounds,  while the  current  767-300ER  is
certified at 412,000 pounds. Early development extended the range of the -200 as
the ER model,  enabling it to fly the Atlantic  nonstop.  Initial  routings were
circuitous, since the aircraft had to stay within 90 minutes of a landing place.
But as experience was gained,  the FAA and  international  authorities  approved
ETOPS (extended range twin-engine over water operations), and more direct routes
became  possible.  The  first  production  models  of the  larger  767-300  were
delivered in 1986 in domestic configuration, soon to be followed by successively
higher gross weight Extended Range (ER) models.  Orders for the -200 slowed to a
trickle  following  the  introduction  of  the  -300,  and it is  probable  that
production of this model will be  discontinued  in the near future.  Much of the
success of the 767  program is  attributable  to ETOPS  operations,  where these
aircraft  (and the A310) have  replaced  747s,  DC-10s and  L-1011s on many long
flights.  So far there have been no untoward incidents under the ETOPS programs.
The 767 has an exemplary  overall safety record,  with only one flight  accident
attributed to inadvertent  thrustreverser deployment on a Lauda Air 767-300 over
Bangkok,  while a second, an Ethiopian -200 was lost in a hijacking  incident in
the Comoro  Islands in 1996.  The most recent  Egypt Air accident is still under
investigation by NTSB and it is most likely again caused by human error.

ECONOMICS

The MBA Model indicates that it is hard to make money with the 767. Satisfactory
margins are achieved  only by  classifying  the 767 as a narrowbody  in terms of
seating  capacity.  By  definition,  MBA has assumed  that only 67.5  percent of
maximum certified seating is installed in a widebody,  compared to 85 percent in
a  narrowbody.  This is in accord  with  industry  experience.  By  making  this
narrowbody  assumption,  we increased the available  seating in the 767-300 from
218 to 247.  Interestingly,  this compares  with the  experience of American and
Delta  in  their   -300s.   American   uses   theirs   both   domestically   and
internationally, and has 215 seats installed. Delta's are all used domestically,
and have 248 seats.

                                       15
<PAGE>


In the long term, the relatively high seat mile costs of the 767s will make them
less  desirable  in the  used  market,  and the  demand  for and  price of these
aircraft will decline further than that of more desirable types.  Their residual
values will also be impaired and they will move into the cargo market.

MBA has classified the aircraft as having seven-abreast seating.  Interestingly,
British tour operators  utilize the aircraft in an eight-abreast  configuration,
thus  increasing  potential  maximum  seating from 290 seats in our model to 375
seats claimed by Boeing.  With 375 seats,  the 767-300 becomes a potent economic
competitor.  However,  until the  industry  shows more signs of  utilizing  this
capability we will continue to use the conventional capacity.

STATISTICS


        -----------------------------------------------------------------------
                                B767 Series Fleet Statistics
                                   (as of November 1999)
        -----------------------------------------------------------------------
                                                 B767-200             B767-300
        -----------------------------------------------------------------------
        Number of Ordered Aircraft                242                  642
        -----------------------------------------------------------------------
        Number of Delivered Aircraft              230                  536
        -----------------------------------------------------------------------
        Number of Cancelled Aircraft               2                    53
        -----------------------------------------------------------------------
        Backlog                                    10                   43
         ------------------------------------------------------ ---------------
        Options                                    0                    29
        -----------------------------------------------------------------------
        Delivered in the last 12 months            0                    40
        -----------------------------------------------------------------------
        Number of Destroyed Aircraft               4                    2
        -----------------------------------------------------------------------
        Number of Retired Aircraft                 0                    0
        -----------------------------------------------------------------------
        Number of Parked Aircraft                  3                    2
        -----------------------------------------------------------------------
        Number  of Aircraft in Operation          226                  534
        -----------------------------------------------------------------------
        Number of Operators                        37                   67
        -----------------------------------------------------------------------
        Number of Leased Aircraft                  71                  235
        -----------------------------------------------------------------------
        Number of Owned Aircraft                  155                  299
        -----------------------------------------------------------------------
        Fleet Average Hours                      48,731               26,521
        -----------------------------------------------------------------------
        Fleet Average Cycles                     17,997               7,577
        -----------------------------------------------------------------------
        Average Age                               13.7                 6.2
        -----------------------------------------------------------------------


                                       16
<PAGE>

B767-200 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 1
TOTAL NUMBER ON MARKET, NOVEMBER/99: 6

B767-300 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 7
TOTAL NUMBER ON MARKET, NOVEMBER/99: 12


                                       17
<PAGE>


MD-80 Series Aircraft

McDonnell  Douglas  was  the  first  manufacturer  to  recognize  and act on the
imminence  of  future  noise  restrictions,  as  well as to  take  advantage  of
available  technology  to  stretch  the DC-9 at least one more time from a basic
139-seat to a 172-seat configuration.  The MD-80 series is an elongated,  higher
gross version of the venerable DC-9 fitted with Stage 3 Pratt & Whitney JT8D-217
/ -219 engines.  It was  originally  certified in 1980 after a few  embarrassing
pratfalls. In the last decade gross weight and range have been increased,  and a
truncated  version,  the MD-87,  offered.  Most recently,  DAC had announced the
MD-90  series,  using the new IAE V-2500  engine,  which offered  quieter,  more
efficient  operation.  But the MD-90 was a slow seller, a victim of the malaise,
which gradually  paralyzed  Douglas and lead to the Boeing merger.  Boeing after
the remaining 30 orders are delivered has now  officially  terminated the MD-90.
However,  20 of them are MD-90-30Ts,  to be built in China, and the prospect for
these is not encouraging.  Saudi Arabian Airlines, with 19 MD-90s in service, is
the largest remaining customer.

Eleven hundred and sixty-three  MD-80s of all versions are currently in service.
MD-80s  have  a  five-abreast   seating   configuration,   contrasted  with  the
six-abreast  seating  of  the  competitive  Boeing  and  Airbus  products.   The
JT8D-217/-219  engines  achieve  only  marginal  compliance  with  Stage 3 noise
limits; therefore, the nagging concern exists that as noise rules are invariably
tightened  the MD-80 will be  squeezed  out before its time.  The only  solution
would be reengining  with the same power plants as the  MD-90--an  $8.0 to $10.0
million project per aircraft, or development of further noise suppression, which
is the more likely solution.

The   MD-80   suffers   from  a   smaller   operator   base   than  the   Boeing
737-300/-400/-500s  with which it  competes.  This has been a long-term  problem
with the Douglas DC-8 and DC-9 as well. There are 56 airlines  worldwide,  which
operate  the MD-80  series,  and 40  percent  are in the hands of two  carriers,
American  and Delta.  Many  operators  utilize  more than one type of MD-80;  no
carrier  utilizes more than four of the five.  Most carriers have fleets of five
or less,  suggesting that ultimate resales to these operators will inevitably be
in lots of one and two each.

                                       18
<PAGE>


The MD-80's  accident record is relatively  good--only five have been destroyed,
only one of which is potentially  attributable to design problems: the SAS icing
incident  in  Europe  in 1994.  The  MD-80  should  have a long  and  relatively
problem-free  structural  life,  given the good  record of  Douglas on the DC-8,
DC-9, and DC-10.

The  MD-80's  cost  characteristics  are  reasonable  due  to its  high  seating
capacity;  and  provided it can skirt the  ever-present  risk of more  stringent
noise  restrictions,  it  should  have a long  and  productive  useful  life  in
competition  with  existing and newly  developing  aircraft.  On the used market
older models are already priced in the range of $80,000 a seat--about 30 percent
that of a new  aircraft--giving  it a significant  advantage for a new operator.
Its largest  probable  market is with existing DC-9  operators,  replacing their
30-year-old aircraft as they are forced to retire them.

ECONOMICS

The MBA Model shows the MD-80  series (with the  exception  of the  short-bodied
MD-87)  to  have  superior  economic  characteristics.   At  comparable  seating
densities,  its lower capital costs offset slightly higher fuel consumption than
the 737-300. The stretched fuselage gives it better seat-mile costs than earlier
DC-9s.

GENERAL COMMENT

FAA very  recently  announced  that they were planning to order the re-wiring of
all DC-10,  MD-11 and MD 80-90 series  aircraft.  The contemplated AD will order
the removal of all metalized  mylar-covered  wiring and replacement  within four
years in conjunction with major maintenance operation. The change is supposed to
decrease  the danger of wire fires such as  suspected  to have  brought down the
Swissair  MD-11 a year ago. The FAA  estimates the cost per aircraft at $380,000
to $800,000 per aircraft


                                       19
<PAGE>

STATISTICS


        ------------------------------------------------------------------------
                                MD-82/-83 Fleet Statistics
                                  (as of November 1999)
        ------------------------------------------------------------------------
                                                     MD-82            MD-83
        ------------------------------------------------------------------------
        Number of Ordered Aircraft                    583              284
        ------------------------------------------------------------------------
        Number of Delivered Aircraft                  565              276
        ------------------------------------------------------------------------
        Number of Cancelled Aircraft                   18               2
        ------------------------------------------------------------------------
        Backlog                                        0                6
        ------------------------------------------------------------------------
        Options                                        1                10
        ------------------------------------------------------------------------
        Delivered in the last 12 months                0                22
        ------------------------------------------------------------------------
        Number of Destroyed Aircraft                   6                1
        ------------------------------------------------------------------------
        Number of Retired Aircraft                     0                0
        ------------------------------------------------------------------------
        Number of Parked Aircraft                      4                2
        ------------------------------------------------------------------------
        Number  of Aircraft in Operation              590              260
        ------------------------------------------------------------------------
        Number of Operators                            29               26
        ------------------------------------------------------------------------
        Number of Leased Aircraft                     308              200
        ------------------------------------------------------------------------
        Number of Owned Aircraft                      289               60
        ------------------------------------------------------------------------
        Fleet Average Hours                          35,479           25,125
        ------------------------------------------------------------------------
        Fleet Average Cycles                         22,651           15,130
        ------------------------------------------------------------------------
        Average Age                                   12.1             8.3
        ------------------------------------------------------------------------

MD-83 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 2
TOTAL NUMBER ON MARKET, NOVEMBER/99: 0



                                       20
<PAGE>


McDonnell Douglas DC-10 Series / MD-11 Aircraft

The DC-10-10 was Douglas'  entry in the widebody  sweepstakes in the late 1960s.
First deliveries were in mid-1971, a year and a half after the 747. American and
United  were  both  big  launch  customers,   placing  orders  for  50  and  60,
respectively.  These  orders  were cut back by 25  percent as  deliveries  began
during the  recession  of the early 1970s.  The  DC-10-10  was  primarily a U.S.
domestic  aircraft,  lacking  the range for over  water  flights.  Few were sold
outside the USA, and at one time five then 'trunk' U.S.  airlines operated them,
and a sixth,  Delta,  ordered  five,  but its order was  transferred  to United.
Today,  most of the 80-odd  aircraft  still in service are flown by American and
United--but  both carriers have already  retired more than half of their fleets,
trading  them to FedEx in exchange  for 727  hushkits  valued about $2.0 million
each.  FedEx is  planning a major  upgrade  and  freighter  conversion  program,
including a two-man glass  cockpit with a future life  expectancy of 20 years or
more.  This  program  has been  dubbed  the  MD-10  and the  prototype  has been
completed.

Douglas  offered a  cargo/convertible  model,  capitalizing on its great success
with the DC-8, but only nine were ever built -- all acquired by Continental  and
subsequently  sold to Federal  Express  who uses them as  dedicated  freighters.
FedEx later bought two more all cargo models of the DC-10-10 from Douglas.

Today,  besides AA and UA,  there are only five  operators of the  DC-10-10.  An
upgraded model, designated the -15, was acquired by Mexicana and Aeromexico, but
only seven were  produced.  No  DC-10-10/-15s  are for sale--at the time of this
writing.

The DC-10 series aircraft  (including the later -30 models) have  experienced an
unfortunately high loss rate due to accidents and terrorism.  While few of these
incidents are  attributed to the  aircraft's  design,  the plane has developed a
reputation,  which is enthusiastically resurrected and exploited by the media at
each new incident.  Only two accidents were ascribed to design  deficiencies  --
the rest ran the gamut  from  pilot  error to hangar  fires to  terrorist  acts.
Regardless of merit, the accidents and incidents have affected the marketability
of the aircraft, and continue to hang over it like a cloud.

                                       21
<PAGE>


MBA believes  that the DC-10-10  offers its  operators a low cost,  medium range
transport  that can  serve the bulk of the  domestic  U.S.  and  North  American
markets  efficiently  for years to come.  Its small  market  base is a  definite
inhibitor which will not be eliminated  unless and until it becomes possible for
more new airlines to be launched in the USA. The present  operators have neither
the  cost  structure  nor the  marketing  philosophy  to  utilize  the  aircraft
differently  than they do today.  Thus current  plans call for  continued  early
retirement of the DC-10-10 by American and United and its replacement with 757s,
767s and 777s.

We predicted two years ago that "One possible  destination for these aircraft is
the mod  center,  from which they will  emerge as  freighters.  Cheap hulls will
attract ambitious purchasers, and the continued freight boom will make converted
freighters  an  attractive  option to new  models.  Douglas  currently  offers a
conversion  package in cooperation  with  Alenia--which  has experience from its
numerous DC-8 conversions".  This prediction came to pass with the AA/UA - FedEx
deal, and it appears that only a handful will remain in passenger service.

ECONOMICS

The MBA Model shows that the DC-10-10 makes a reasonable  operating return,  but
only a marginal return after lease or financial costs.  Particularly compared to
the L-1011-1 series,  the aircraft generally has a few less seats and costs more
to maintain. These factors are operator-sensitive,  but indicate that additional
care must be taken to insure a reasonable profit. The principal future passenger
use is now as a charter aircraft.

The  DC-10-30  is  the  upgraded,  long-range  partner  of the  DC-10-10.  First
deliveries  were in 1972,  about a year  after the -10.  The -30  featured  more
powerful GE CF6-50C1  engines and a 110,000  pound  increase in maximum  takeoff
gross  weight,  permitting  nonstop  operations  over  ranges  as great as 6,000
statute miles. The aircraft was offered in both passenger and  cargo/convertible
-30CF   configurations  and  proved  particularly   popular  with  international
airlines.   A  total  of  169  passenger  and  27  convertibles  were  produced.
Subsequently,  ten all-cargo  aircraft were ordered  during the 1980s by Federal
Express, which standardized on the DC-10 in the early years.

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<PAGE>


There were two derivatives of the DC-10-30--the DC-10-40, equipped with P&W JT9D
engines,  and the  military  tanker  KC-10A.  Forty-two  -40s were  produced for
Northwest and Japan Airlines, and 60 KC-10As for the U.S. Air Force.

The DC-10-30  equipped  with the early GE CF6-50C1  engine was not  certified to
meet Stage 3, while the later  models  equipped or converted to the -50C2 engine
do meet Stage 3. The  alternative  is a $1.0 million per engine upgrade from the
C1 to the C2 configuration, much of which can be accomplished during overhaul.

The DC-10-30 enjoyed a very strong secondhand market during the late 1980s, with
prices being bid up to over $40.0  million on even the oldest  models.  The past
recession  and glut of used aircraft  brought a sharp decline in prices.  Demand
slackened as new replacement MD-11s, B-747s, and B-767s were delivered. However,
the tide turned in 1996, with Northwest,  Continental and others adding to their
DC-10-30 fleets and prices rebounded strongly, but are again softening.

The  DC-10-30 is not a  particularly  effective  cargo  aircraft  because of its
inability  to handle  large  intermodal  containers  side-by-side  like the 747.
Nevertheless,  it  has  found  a  firm  market  with  FedEx  and  Gemini  and is
extensively  utilized under the U.S. Air Force's CRAF program. In the future, it
is likely that more DC-10-30s will be converted to cargo to replace older B-707s
and DC-8s still in operation and a dozen have been converted by Gemini and Varig
at Alenia and Phoenix.  Currently,  six carriers operate a total of 45 -30CF and
converted aircraft, of which FedEx employs 26.

There have been no major aging aircraft  problems with the DC-10-30 to date. 'D'
Checks cost between $3.0 and $4.0 million,  and engine  overhauls around $1.0 to
$1.2 million at 6,000 hour/1,500 cycle intervals.

ECONOMICS

The MBA Model  shows the  operating  economics  of the  DC-10-30  to be slightly
poorer than those of the DC-10-10 over the 'standard'  1,000 mile segment due to
its  higher  gross  weight,  crew  costs,  landing  fees,  and  maintenance  and
acquisition  costs.  Passenger  capacity  of  the  two  aircraft  is  the  same.
Nevertheless,  the  aircraft  continues  to hold  its own  against  both the new
B-747-400 and the A340, and so far is economically  superior to the big twins in

                                       23
<PAGE>

service.  We believe that the DC-10-30  will  continue to enjoy an active market
and long useful life, with more conversions to cargo.

Despite the aircraft's  scarcity and feeble market penetration in the CF/F mode,
we place a higher CMP on this aircraft than on the DC-10-30 passenger  aircraft.
This is primarily due to the  versatility of the CF, the tighter  current market
for this version, and the potential full-cargo conversion.

STATISTICS


        ------------------------------------------------------------------------
                             DC10-30 Series Fleet Statistics
                                  (as of November 1999)
        ------------------------------------------------------------------------
        Number of Ordered Aircraft                           201
        ------------------------------------------------------------------------
        Number of Delivered Aircraft                         201
        ------------------------------------------------------------------------
        Delivered in the last 12 months                       0
        ------------------------------------------------------------------------
        Number of Destroyed Aircraft                          13
        ------------------------------------------------------------------------
        Number of Retired Aircraft                            5
        ------------------------------------------------------------------------
        Number of Parked Aircraft                             22
        ------------------------------------------------------------------------
        Number  of Aircraft in Operation                     186
        ------------------------------------------------------------------------
        Number of Operators                                   40
        ------------------------------------------------------------------------
        Number of Leased Aircraft                            103
        ------------------------------------------------------------------------
        Number of Owned Aircraft                              83
        ------------------------------------------------------------------------
        Fleet Average Hours                                 81,091
        ------------------------------------------------------------------------
        Fleet Average Cycles                                19,024
        ------------------------------------------------------------------------
        Average Age                                          21.9
        ------------------------------------------------------------------------

DC10-30 AVAILABILITY

TOTAL NUMBER ON MARKET, NOVEMBER/98: 17
TOTAL NUMBER ON MARKET, NOVEMBER/99: 11



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<PAGE>

VII.  COVENANTS

This report has been prepared for the  exclusive  use of Aircraft  Finance Trust
and shall not be provided to other parties by MBA without the express consent of
Aircraft Finance Trust.

MBA certifies that this report has been independently prepared and that it fully
and accurately  reflects MBA's opinion as to the Current Base and Market Values.
MBA further  certifies  that it does not have,  and does not expect to have, any
financial or other interest in the subject or similar aircraft.

This report  represents  the  opinion of MBA as to the  Current  Base and Market
Values of the subject  aircraft and is intended to be advisory  only, in nature.
Therefore,  MBA assumes no  responsibility  or legal  liability  for any actions
taken, or not taken, by Aircraft Finance Trust or any other party with regard to
the subject aircraft. By accepting this report, all parties agree that MBA shall
bear no such responsibility or legal liability.

                                  PREPARED BY:



                                  Teo Ozdener, M.Sc., P.Eng.
                                  Vice President, Technical


                                  REVIEWED BY:



February 8, 2000                  Morten S. Beyer, Appraiser Fellow
                                  Chairman & CEO
                                  ISTAT Certified Senior Appraiser



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