UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q/A



(Mark One)



( X )	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002



OR



(    )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______.

Commission File Number 0-27034

Commission File Number 33-96884



VANGUARD AIRLINES, INC.

(Exact name of Registrant as specified in its charter)

Delaware				48-1149290

(State or other jurisdiction			(I.R.S. Employer

of incorporation or organization)		Identification Number)

533 Mexico City Avenue

Kansas City International Airport

Kansas City, Missouri 64153

(816) 243-2100

(Address of principal executive offices, including zip code;

Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of Class)



Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X         No ______

At March 31, 2002 there were 43,098,111 shares of Common Stock, par value $0.001 per share, issued and outstanding.

This Amendment is filed to correct the following line items in the financial statements:

"Other Income (expense): Other" for the Three months ended March 31, 2001, is changed to (308,007) from (583,957).

"Total other expense, net" for the Three months ended March 31, 2001, is changed to (571,743) from (847,693).

No other changes are made by this amendment.

Part I. - Financial Information

Item 1. - Financial Statements

|Vanguard Airlines, Inc.
Condensed Balance Sheets                                                                         
|-------------------------------------------------------------------------------------------------------------------------
|                                                                                                                         
|Assets                                                                                                                   
|Current assets:                                                                                                          
|Cash and cash equivalents                                                                                                
|Accounts receivable, less allowance for doubtful accounts of $557,143 at March 31, 2002 and $500,558 at December 31, 2001
|Inventories                                                                                                              
|Prepaid expenses and other current assets                                                                                
|Total current assets                                                                                                     
|                                                                                                                         
|Property and equipment, at cost:                                                                                         
|Aircraft improvements and leasehold costs                                                                                
|Aircraft engines and rotable inventory                                                                                   
|Reservation system and communication equipment                                                                           
|Other property and equipment                                                                                             
|                                                                                                                         
|Accumulated depreciation and amortization                                                                                
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|Deferred debt issuance costs                                                                                             
|Leased aircraft deposits                                                                                                 
|Fuel and security deposits                                                                                               
|Other                                                                                                                    
|                                                                                                                         
|                                                                                                                         
|Total assets                                                                                                             



|Vanguard Airlines, Inc.
Condensed Balance Sheets (continued)                      
|----------------------------------------------------------------------------------
|                                                                                  
|Liabilities and Stockholders' Deficit                                             
|Current liabilities:                                                              
|Accounts payable                                                                  
|Accrued expenses                                                                  
|Air traffic liability                                                             
|Current portion of accrued maintenance                                            
|Current portion of capital lease obligations                                      
|Current portion of long-term debt and related-          party notes payable       
|Total current liabilities                                                         
|                                                                                  
|Accrued maintenance, less current portion                                         
|                                                                                  
|Capital lease obligations, less current portion                                   
|                                                                                  
|                                                                                  
|                                                                                  
|Stockholders' deficit:                                                            
|Preferred stock - Series A, $0.001 par value:                                     
|Authorized shares -  450,000                                                      
|Issued and outstanding shares - 302,362                                           
|Liquidation preference - $3,023,620                                               
|Preferred stock - Series B, $0.001 par value:                                     
|Authorized shares -  100,000                                                      
|Issued and outstanding shares - 100,000                                           
|Liquidation preference - $7,500,000                                               
|Preferred stock - Series C, $0.001 par value:                                     
|Authorized shares -  250,000                                                      
|Issued and outstanding shares - 187,500 in 2001                                   
|Liquidation preference - $3,750,000                                               
|Common stock, $0.001 par value:                                                   
|Authorized shares - 100,000,000                                                   
|Issued and outstanding shares - 43,098,111 at March 31, 2002 and December 31, 2001
|Additional paid-in capital                                                        
|Accumulated deficit                                                               
|Total stockholders' deficit                                                       
|Total liabilities and stockholders' deficit                                       

See accompanying notes.





|Vanguard Airlines, Inc.
Statement of Operations
(Unaudited)
|-----------------------------------------------------------
|                                                           
|                                                           
|                                                           
|Operating revenues:                                        
|Passenger revenues                                         
|Other                                                      
|Total operating revenues                                   
|                                                           
|Operating expenses:                                        
|Flying operations                                          
|Aircraft fuel                                              
|Maintenance                                                
|Passenger service                                          
|Aircraft and traffic servicing                             
|Promotion and sales                                        
|General and administrative                                 
|Depreciation and amortization                              
|Aircraft return and lease termination costs                
|Total operating expenses                                   
|Operating loss                                             
|                                                           
|Other income (expense):                                    
|Interest expense                                           
|Interest income                                            
|Deferred debt issuance cost amortization                   
|Other                                                      
|Total other expense, net                                   
|                                                           
|Loss before extraordinary item                             
|                                                           
|Extraordinary item                                         
|                                                           
|Net loss                                                   
|                                                           
|Basic and diluted loss per share:                          
|Loss before extraordinary item                             
|Extraordinary item                                         
|Net loss                                                   
|                                                           
|Weighted average shares used in                            
|per share computation:                                     
|Basic and Diluted                                          

See accompanying notes.





|Vanguard Airlines, Inc.
Statements of Cash Flows
(Unaudited)               
|---------------------------------------------------------------------------
|                                                                           
|                                                                           
|Operating activities                                                       
|Net loss                                                                   
|Adjustments to reconcile net loss to net cash
used in operating activities:
|Extraordinary item                                                         
|Noncash position of aircraft return and lease termination costs            
|Depreciation                                                               
|Amortization                                                               
|Debt issuance cost amortization                                            
|Changes in operating assets and liabilities:                               
|Accounts receivable                                                        
|Inventories                                                                
|Prepaid expenses and other current assets                                  
|Deposits and other                                                         
|Accounts payable                                                           
|Accrued expenses                                                           
|Accrued maintenance                                                        
|Air traffic liability                                                      
|                                                                           
|Net cash used in operating activities                                      
|                                                                           
|Investing activities                                                       
|Purchases of property and equipment                                        
|                                                                           
|Financing activities                                                       
|Payments on capital lease obligations                                      
|Payments on long term debt                                                 
|Proceeds from the issuance of preferred shares                             
|Net cash provided by (used in) financing activities                        
|                                                                           
|Net decrease in cash and cash equivalents                                  
|Cash and cash equivalents at beginning of period                           
|Cash and cash equivalents at end of period                                 
|                                                                           
|                                                                           
|Supplemental disclosures of cash flow information:                         
|Cash paid during the period for interest                                   
|                                                                           
|                                                                           
|Supplemental schedule of noncash investing and      financing activities:  
|Capital lease obligations incurred for property and equipment              

See accompanying notes.



Vanguard Airlines, Inc.

Notes to Unaudited Condensed Interim Financial Statements

March 31, 2002

1.	Basis of Presentation



The accompanying unaudited condensed financial statements of Vanguard Airlines, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all transactions considered necessary for a fair presentation have been included.  Operating results for the three month period ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002.



The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.



For the three months ended March 31, 2002 and the year ended December 31, 2001, the Company incurred a net loss of approximately $8 million and $31 million, respectively.  The Company had a working capital deficiency and stockholders' deficit at March 31, 2002 of approximately $51 million and $36 million, respectively.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  The Company requires additional debt or equity financing to fund ongoing operations in 2002.  The Company is seeking to raise additional capital; however, there can be no assurance that the Company will raise sufficient capital to fund ongoing operations in 2002.  In order to obtain such financing, the Company intends to seek to restructure certain of its financial obligations and to issue new equity.  The issuance of additional shares of equity in connection with such financing could dilute the interests of existing stockholders of the Company.  The inability to secure additional funding could have a material adverse effect on the Company, including the possibility that the Company could have to cease operations.



In March 2002, the Company's Board of Directors has approved a one-for-five reverse stock split, subject to shareholder approval.



2.	Earnings per Share



For the three month period ended March 31, 2002 and 2001, the computation of basic loss per share was based on the weighted average number of outstanding common shares.  The computation of diluted net loss per share was based solely on the weighted average number of outstanding common shares.  Outstanding preferred stock, employee stock options and warrants were not included in the calculation of diluted loss per share, as such inclusion would be antidilutive.



3. 	Long-term Debt and Related-party Notes Payable



On December 29, 2000, the Company entered into a loan agreement with a related party to borrow $3.0 million.  The Company received approximately $2.6 million in cash net of the first loan payment, a security deposit and loan costs.  The obligation is secured by various aircraft parts and ground equipment.  The obligation is payable in monthly installments through December 2003, including interest at prime plus 2.5%.  This agreement provided the Company the ability to borrow up to an additional $1.0 million under substantially the same terms as the initial loan.  As of March 31, 2002, no additional borrowings had been made against this facility.  At March 31, 2002 and December 31, 2001, this debt was in default due to delinquent payments. Accordingly, this amount has been classified as a current liability on the accompanying balance sheets.



In 2001, the Company entered into lease deferral notes payable for approximately $5,582,000, including approximately $200,000 of accrued interest, with certain of its aircraft lessors.  Additionally in 2001, the Company issued a note payable for $999,000 to a lessor to satisfy its maintenance obligation at the scheduled return of an aircraft.  Repayment of these loans, including accrued interest at 10%, generally was scheduled to commence in July 2001 with maturities varying through December 2002.  To date, the Company has not made any of the payments required under these loans and was, therefore, in default of these notes at March 31, 2002 and December 31, 2001.  Accordingly, these notes have been classified as a current liability on the accompanying balance sheets.  These notes are callable upon demand and the Company is accruing penalty interest at an annual rate of 14%.

The Company has also not made certain payments required under its aircraft leases.  All required lease payments (and interest at contractual rates) due under the Company's lease agreements (without acceleration) with respect to periods through March 31, 2002, have been accrued in the statements of operations and all such amounts which had not been paid as of March 31, 2002, are reflected as accounts payable in the balance sheets.



The Company has received notices of default from certain of its aircraft lessors.  The Company intends to seek revised lease terms (including forgiveness of certain unpaid lease payments and reductions in future rental obligations) with all its aircraft lessors in connection with the Company's efforts to obtain new financing.  The Company intends that such revised terms, if agreed to, would allow for the removal of the notices of default.



4.	Financial Instruments and Leases



In January and February 2002, the Company entered into operating leases for two (2) MD-82 aircraft with Gustav Leasing IV Limited, pursuant to the November 2001 letter of intent with debis AirFinance.  The terms of these leases are for five (5) years from delivery.



On March 6, 2002, the Company issued warrants to purchase 3,500,000 shares of common stock at a price per share of $0.24782 to its financial advisor as settlement of compensation earned on transactions completed prior to December 31, 2001, subject to waiver of anti-dilution rights held by certain shareholders.  The value of these warrants as of the issuance date exceeded the recorded liability of $737,000 by approximately $593,000 which has been recorded as an extraordinary item related to the extinguishment of this liability in the March 31, 2002 financial statements.



5.	September 11, 2001 and Federal Grant Assistance



On September 11, 2001, international terrorists hijacked four aircraft (operated by American Airlines and United Airlines) and crashed them into New York City's twin World Trade Center towers and the Pentagon in Washington D.C., resulting in the loss of approximately 3,000 lives.  This act of war resulted in the closure of the U.S. air traffic system for over two days and has resulted in significantly reduced demand for air travel.



In response to the terrorist attacks, the U.S. Congress approved $15 billion in aid to stabilize the airline industry, including up to $5 billion in direct grants to passenger and cargo airlines to cover losses directly and indirectly resulting from the attacks through the end of December 2001, up to $10 billion in loan guarantees to facilitate the airline industry's access to the capital markets, and war risk insurance for up to 180 days and reimbursements to airlines for certain war risk insurance premium increases.



The $5 billion of direct grants has been allocated among U. S. airlines based on their relative size, as measured by available seat miles or cargo ton miles flown during the month of August 2001.  The allocation to the Company, all of which was received in 2001 and recognized as other income, was approximately $7,286,000.



During the fourth quarter 2001, the Company applied for a loan guarantee from the federal government for financing that the Company is seeking. The Company revised and resubmitted its application in May 2002.  There can be no assurance that such financing can be obtained.

6.	Aircraft Return and Lease Termination Costs

On December 27, 2001, the Company committed to terminate lease agreements relating to two of its aircraft which were taken out of service on January 8, 2002 and February 15, 2002, respectively.  The early termination of the leases resulted in approximately $2,727,000 of charges which were recorded in 2001.  Approximately $51,000 of these charges have been paid as of March 31, 2002.  Certain aircraft leasehold improvements related to these aircraft, in the amount of approximately $87,000, were recorded in the first quarter of 2002.



In March 2002, the Company agreed to return two Boeing 737-200 aircraft to their lessor; returning one in March and one in April.  As a result, the Company incurred approximately $833,000 of charges including the write-off of aircraft leasehold costs of approximately $641,000, maintenance expense related to the return of the aircraft of approximately $132,000 and loss of certain related assets of approximately $60,000 which were recorded in the first quarter.

In the first quarter of 2001, the Company returned two Boeing 737-200 aircraft to their lessors.  As a result, the Company incurred approximately $1,167,000 of charges including maintenance expense related to the return of the aircraft of approximately $891,000, loss of certain aircraft deposits of approximately $225,000 and the write-off of aircraft leasehold costs of approximately $51,000.



7.	Use of Estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.



8.	Reclassification



Certain amounts in the 2001 financial statements have been reclassified to conform to the 2002 presentation.



9.	Subsequent Events



On May 10, 2002, the Company entered into an agreement with a bank card processor to replace its current processor beginning on May 13, 2002.  The Company's current processor had previously notified the Company of its desire to terminate its agreement as a result of its ceasing this line of business in general.  The terms of the agreement with the new processor are not materially different from the terms of the existing agreement.  However, the new processor has advised the Company that they will not accept a surety bond as collateral as did the current credit card processor.  Accordingly, the Company must obtain replacement collateral satisfactory to the new processor or the new processor will withhold funds when its exposure exceeds the value of the letters of credit to be provided as collateral.  Additionally, the Company must obtain formal approval of the old bank and the stockholders providing the existing letters of credit that such letters of credit may also be used to secure the new bank.  The Company has received preliminary indications that such approvals will be provided.  The transfer of credit card processing functions may disrupt the Company's cash flow and accelerate the need for immediate funding.  See Note 1.



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Signature and Title	Date



/s/ SCOTT DICKSON 		May 22, 2002

Scott Dickson, CEO and President

/S/ DAVID RESCINO		May 22, 2002

David Rescino, Chief Financial Officer

(Principal Accounting Officer)