UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q



                                   (Mark One)

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

                   For the quarterly period endedJune 30, 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 No. 0-19137


                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)

    Massachusetts                                                 04-3057290
    (State or other jurisdiction of                             (IRS Employer
   incorporation or organization)                         Identification No.)

         1050 Waltham Street, Suite 310, Lexington, MA            02421
   (Address of principal executive offices)                        (Zip Code)

Registrant's  telephone  number,  including  area  code     (781)  676-0009
                                                        -------------------

88  Broad  Street,  Boston,  MA    02110
----------------------------------------
(Former  name,  former  address  and  former  fiscal year, if changed since last
report.)


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_____
   -----



<PAGE>



                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                    FORM 10-Q

                                      INDEX


<TABLE>
<CAPTION>


PART I. FINANCIAL INFORMATION:                                             Page
                                                                           ----
<S>                                                                        <C>
     Item 1. Financial Statements

                Statement of Financial Position
                at June 30, 2002 and December 31, 2001                        3

                Statement of Operations
                for the three and six months ended June 30, 2002 and 2001     4

                Statement of Cash Flows
                for the six months ended June 30, 2002 and 2001               5

                Notes to the Financial Statements                             6


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

     Item 3. Quantitative and Qualitative Disclosures about Market Risk      17


PART II. OTHER INFORMATION:

     Item 1 - 6                                                              18
</TABLE>




<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                         STATEMENT OF FINANCIAL POSITION

                       JUNE 30, 2002 AND DECEMBER 31, 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                              June 30,     December 31,
                                                                2002           2001
                                                            ------------  --------------
ASSETS
<S>                                                         <C>           <C>

Cash and cash equivalents                                   $ 5,555,018   $   3,907,407
Rents receivable, net of allowance of $49,163 and $43,919
  at June 30, 2002 and December 31, 2001, respectively           35,640          60,747
Accounts receivable - affiliate                                  17,165             984
Other assets                                                     24,496           4,859
Interest receivable - loan, net of allowance of
  $26,846 and $590,772 at June 30, 2002 and
  December 31, 2001, respectively                                     -               -
Loan receivable, net of allowance of $318,500
  at June 30, 2002 and December 31, 2001                      3,321,500       3,321,500
Net investment in sales-type lease                                    -          17,755
Equipment at cost, net of accumulated depreciation
  of $3,097,065 and $2,585,327 at June 30, 2002
  and December 31, 2001, respectively                         1,700,049       2,211,787
                                                            ------------  --------------

      Total assets                                          $10,653,868   $   9,525,039
                                                            ============  ==============


LIABILITIES AND PARTNERS' CAPITAL

Notes payable                                               $   930,021   $   1,038,675
Accrued interest                                                  5,534           6,611
Accrued liabilities                                             220,980         666,106
Accrued liabilities - affiliate                                   9,539          22,888
                                                            ------------  --------------
     Total liabilities                                        1,166,074       1,734,280
                                                            ------------  --------------

Partners' capital (deficit):
   General Partner                                           (2,521,067)     (2,605,919)
   Limited Partnership interests
   (2,714,647 Units; initial purchase price of $25 each)     12,008,861      10,396,678
                                                            ------------  --------------
     Total partners' capital                                  9,487,794       7,790,759
                                                            ------------  --------------

     Total liabilities and partners' capital                $10,653,868   $   9,525,039
                                                            ============  ==============
</TABLE>




   The accompanying notes are an integral part of these financial statements.

<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF OPERATIONS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                   For the three months ended    For the six months ended
                                                                June 30,              June 30,

                                                         2002         2001         2002         2001
                                                     ----------  ------------  -----------  -----------
INCOME
<S>                                                   <C>         <C>           <C>          <C>
Operating lease revenue                               $ 111,543   $   155,113   $  197,738   $  311,108
Sales-type lease revenue                                      -         3,351            -        6,702
Interest income                                          20,861        38,022       39,512       68,143
Interest income - loan                                        -             -            -      144,686
Other income                                                  -        29,000    1,562,774       29,000
                                                     ----------  ------------  -----------  -----------
  Total income                                          132,404       225,486    1,800,024      559,639


EXPENSES

Depreciation                                             65,345        65,345      130,690      130,691
Write-down of equipment                                 231,189       125,000      231,189      125,000
Interest expense                                         18,136        31,637       37,314       49,030
Equipment management fees - affiliate                     5,577        10,705       11,623       21,455
Bad debt expense                                              -             -       22,999            -
Operating expenses - affiliate                          138,186       174,370      233,100      315,802
Recovery of bad debt expense from loan receivable      (563,926)            -     (563,926)           -
Write-down of impaired loan and interest receivable           -       909,272            -      909,272
                                                     ----------  ------------  -----------  -----------
  Total expenses                                       (105,493)    1,316,329      102,989    1,551,250


Net income (loss)                                     $ 237,897   $(1,090,843)  $1,697,035   $ (991,611)
                                                     ----------  ------------  -----------  -----------


Net income (loss) per limited partnership unit        $    0.08   $     (0.38)  $     0.59   $    (0.35)
                                                     ----------  ------------  -----------  -----------
Cash distributions declared
   per limited partnership unit                       $       -   $         -   $        -   $        -
                                                     ----------  ------------  -----------  -----------
</TABLE>











   The accompanying notes are an integral part of these financial statements.
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF CASH FLOWS

                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                               2002            2001
..                                                          ------------    ------------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
<S>                                                       <C>             <C>
Net income (loss)                                         $   1,697,035   $    (991,611)
Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
  Depreciation                                                  130,690         130,691
  Write-down of equipment                                       231,189         125,000
  Bad debt expense                                               22,999               -
  Sales-type lease revenue                                            -          (6,702)
  Write-down of impaired loan and interest receivable                 -         909,272
  Recovery of bad debt expense from loan receivable            (563,926)              -
Changes in assets and liabilities:
  Rents receivable                                               19,863         111,963
  Accounts receivable - affiliate                               (16,181)       (104,203)
  Other assets                                                  (19,637)         (9,508)
  Interest receivable - loan                                    563,926        (144,686)
  Collections on net investment in sales-type lease                   -         117,989
  Accrued interest                                               (1,077)            364
  Accrued liabilities                                          (295,267)         21,779
  Accrued liabilities - affiliate                               (13,349)         12,854
  Deferred rental income                                              -         (27,244)
                                                          --------------  --------------
    Net cash provided by operating activities                 1,756,265         145,958
                                                          --------------  --------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES

Proceeds from notes payable                                           -         505,028
Principal payments - notes payable                             (108,654)       (269,632)
                                                          --------------  --------------
    Net cash provided by (used in) financing activities        (108,654)        235,396
                                                          --------------  --------------

Net increase in cash and cash equivalents                     1,647,611         381,354
Cash and cash equivalents at beginning of period              3,907,407       2,827,385
                                                          --------------  --------------
Cash and cash equivalents at end of period                $   5,555,018   $   3,208,739
                                                          ==============  ==============

SUPPLEMENTAL INFORMATION

Cash paid during the year for interest                    $      38,391   $      48,666
                                                          ==============  ==============
</TABLE>


SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  ACTIVITY:
In  February  2001,  the Partnership refinanced certain indebtedness and accrued
interest  in  the  amount  of  $706,831.



   The accompanying notes are an integral part of these financial statements.

<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                        NOTES TO THE FINANCIAL STATEMENTS

                                  JUNE 30, 2002


                                   (UNAUDITED)


NOTE  1  -  BASIS  OF  PRESENTATION
-----------------------------------

The  financial  statements  presented  herein  are  prepared  in conformity with
generally accepted accounting principles and the instructions for preparing Form
10-Q  under  Rule  10-01  of  Regulation  S-X  of  the  Securities  and Exchange
Commission  and  are  unaudited.  As  such,  these  financial  statements do not
include  all  information  and  footnote  disclosures  required  under generally
accepted  accounting  principles  for  complete  financial  statements  and,
accordingly, the accompanying financial statements should be read in conjunction
with the financial statements and related footnotes presented in the 2001 Annual
Report  (Form  10-K)  of  AIRFUND  II  International  Limited  Partnership  (the
"Partnership").  Except  as  disclosed herein, there has been no material change
to the information presented in the footnotes to the 2001 Annual Report included
in  Form  10-K.

In  the  opinion  of  management,  all  adjustments  (consisting  of  normal and
recurring  adjustments)  considered  necessary  to  present fairly the financial
position  at  June  30, 2002 and December 31, 2001 and results of operations for
the  three and six month periods ended June 30, 2002 and 2001 have been made and
are  reflected.


NOTE  2  -  REVENUE  RECOGNITION
--------------------------------

Rents  are  payable  to  the Partnership monthly or quarterly and no significant
amounts  are calculated on factors other than the passage of time.  The majority
of  the  leases  are  accounted  for as operating leases and are noncancellable.
Rents received prior to their due dates are deferred.  In certain instances, the
Partnership  may  enter  renewal  or re-lease agreements which expire beyond the
Partnership's  anticipated  dissolution date.  This circumstance is not expected
to  prevent  the orderly wind-up of the Partnership's business activities as the
General  Partner,  wholly  owned  by  Equis  Financial Group Limited Partnership
("EFG"),  would  seek  to sell the then-remaining equipment assets either to the
lessee  or  to  a  third  party,  taking into consideration the amount of future
noncancellable  rental  payments associated with the attendant lease agreements.
Future  minimum  rents  for  operating  leases  of  $637,193 are due as follows:
<TABLE>
<CAPTION>

<S>                           <C>    <C>

For the year ending June 30,   2003  $294,089
                               2004   294,089
                               2005    49,015
                                     --------

..                             Total  $637,193
                                     ========
</TABLE>



See  Note  9  -  "Subsequent  Events"  for  further  discussion.


NOTE  3  -  EQUIPMENT
---------------------

The  following  is  a  summary of equipment owned by the Partnership at June 30,
2002.  Remaining  Lease  Term  (Months), as used below, represents the number of
months  remaining  from June 30, 2002 under contracted lease terms.  A Remaining
Lease  Term  equal  to  zero  reflects  equipment  held  for  sale  or re-lease.

<TABLE>
<CAPTION>

<S>                                             <C>          <C>
..                                               Remaining
..                                               Lease Term   Equipment
 Equipment Type                                    (Months)  at Cost
----------------------------------------------  -----------  ------------

One McDonnell Douglas MD-82                               0  $ 2,078,640
One McDonnell Douglas MD-82
(Aerovias de Mexico, S.A. de C.V)                        26    2,078,640
One Boeing 737-2H4 (Air Slovakia)                         2      639,834
                                                             ------------
   Total equipment cost                                   -    4,797,114
   Accumulated depreciation                               -   (3,097,065)
                                                             ------------
   Equipment, net of accumulated depreciation             -  $ 1,700,049
                                                             ============
</TABLE>


The  costs  of  each  of  the  Partnership's  aircraft  represent  proportionate
ownership  interests.  The  remaining  interests  are  owned by other affiliated
partnerships  sponsored  by  EFG.  All  partnerships  individually  report,  in
proportion  to  their respective ownership interests, their respective shares of
assets,  liabilities,  revenues,  and  expenses  associated  with  the aircraft.

Certain of the Partnership's aircraft and the related lease payment streams were
used  to  secure  the  Partnership's  term  loans with third-party lenders.  The
preceding  summary  includes  leveraged  equipment  having  an  original cost of
approximately  $2,079,000 and a net book value of approximately $943,000 at June
30,  2002.

The  Partnership entered into a three-year lease agreement with Air Slovakia BWJ
Ltd.  for  its  proportionate  interest  in a Boeing 737-2H4 aircraft, effective
September  2000.  In accordance with a lease amendment executed in January 2002,
the  lease  term  was  revised and the lease terminated in August 2002, with the
title  to  the  aircraft  transferring  to  Air  Slovakia.

The  summary  above includes aircraft held for re-lease or sale with an original
proportionate  cost  of  approximately  $2,079,000  and  a  net  book  value  of
approximately  $668,000,  which  represents the McDonnell Douglas MD-82 aircraft
returned  in  April  2001.  The  General Partner is actively seeking the sale or
re-lease  of  this  aircraft.

The  Partnership accounts for impairment of long-lived assets in accordance with
Statement  of  Financial  Accounting Standards ("SFAS") No. 144, "Accounting for
the  Impairment  or  Disposal  of  Long-Lived Assets" which was issued in August
2001.  SFAS  No.  144 requires that long-lived assets be reviewed for impairment
whenever  events or changes in circumstances indicate that the net book value of
the  assets  may not be recoverable from undiscounted future cash flows.  During
the  three  months ended June 30, 2002, the Partnership recorded a write-down of
equipment, representing an impairment to the carrying value of the Partnership's
interest in two McDonnell Douglas MD-82 aircraft and a Boeing 737 aircraft.  The
resulting  charge  of $231,189 was based on a comparison of estimated fair value
and  carrying  value of the Partnership's interest in the aircraft. The estimate
of  the  fair  value  was  based  on  (i) a current offer to purchase one of the
McDonnell  Douglas  MD-82  aircraft, (ii) indications of interest from potential
purchasers of the second McDonnell Douglas MD-82 aircraft, (iii) the sale of the
Boeing  737  aircraft  subsequent to June 30, 2002, and (iv) EFG's assessment of
prevailing  market  conditions  for  similar aircraft.  Aircraft condition, age,
passenger  capacity,  distance  capability,  fuel  efficiency, and other factors
influence  market  demand  and  market  values  for passenger jet aircraft.  The
events  of  September 11, 2001, along with a recession in the United States have
continued to adversely affect the market demand for both new and used commercial
aircraft.


NOTE  4  -  LOAN  RECEIVABLE
----------------------------

On  March  8,  2000,  the  Partnership  and  10  affiliated  partnerships  (the
''Partnerships'')  collectively  loaned  $32  million  to  Echelon  Residential
Holdings  LLC  ("Echelon  Residential  Holdings"),  a  newly  formed real estate
company.  Echelon  Residential Holdings is owned by several investors, including
James  A.  Coyne,  Executive  Vice  President  of  EFG.  In  addition,  certain
affiliates  of the General Partner made loans to Echelon Residential Holdings in
their  individual  capacities.
The  Partnership's  original  loan was $3,640,000. Echelon Residential Holdings,
through  a  wholly-owned  subsidiary  (Echelon  Residential  LLC), used the loan
proceeds  to  acquire  various  real  estate  assets  from Echelon International
Corporation, an unrelated Florida-based real estate company. The loan has a term
of  30 months, maturing on September 8, 2002, and an annual interest rate of 14%
for  the  first  24  months and 18% for the final 6 months. Interest accrues and
compounds  monthly  and  is  payable  at  maturity.  In  connection  with  the
transaction, Echelon Residential Holdings has pledged a security interest in all
of  its  right, title and interest in and to its membership interests in Echelon
Residential LLC to the Partnerships as collateral.  Echelon Residential Holdings
has  no  material  business  interests  other than those connected with the real
estate  properties  owned  by  Echelon  Residential  LLC.
During  the  second  quarter  of  2001,  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $318,500, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable from inception through March 31, 2001 and ceased accruing interest on
its  loan receivable from Echelon Residential Holdings, effective April 1, 2001.
During  the  second  quarter  of  2002,  the  Partnership received $563,926 from
Echelon  Residential  Holdings  for  interest due on the loan.  As a result, the
Partnership  reversed  $563,926  of  the  allowance recorded against the accrued
interest receivable balance, which is reflected as "Recovery of bad debt expense
from  loan  receivable"  in the Statement of Operations.   At June 30, 2002, the
General  Partner  believes that the net carrying value of the loan receivable is
appropriate.
The  summarized unaudited financial information for Echelon Residential Holdings
as  of and for the six month periods ended June 30, 2002 and 2001 is as follows:

<TABLE>
<CAPTION>

                                            2002           2001
                                        -------------  ------------
<S>                                     <C>            <C>
Total assets                            $ 94,423,115   $79,159,776
Total liabilities                       $107,902,966   $85,455,528
Minority interest                       $  1,108,573   $ 1,782,982
Total deficit                           $(14,588,424)  $(8,078,734)

Total revenues                          $  1,430,874   $ 1,705,679
Total expenses, minority interest
  and equity in loss of unconsolidated
  joint venture                         $  4,061,173   $ 5,924,774
Net loss                                $ (2,630,299)  $(4,219,095)
</TABLE>



NOTE  5  -  NET  INVESTMENT  IN  SALES-TYPE  LEASE
--------------------------------------------------

The  Partnership's  net  investment  in a sales-type lease was the result of the
conditional  sale  of  the  Partnership's proportionate interest in a Boeing 737
aircraft executed in October 2000.  The title to the aircraft was to transfer to
Royal  Aviation  Inc.  at the expiration of the lease term in January 2002.  For
the  three and six month periods ended June 30, 2001, the Partnership recognized
sales-type  lease  revenue  of $3,351 and $6,702, respectively, from this lease.

In  the fourth quarter of 2001, Royal Aviation Inc. declared bankruptcy and as a
result,  has defaulted on this conditional sales agreement.  The General Partner
is continuing to negotiate for the return of the aircraft.  As of June 30, 2002,
the  Partnership  has  written-down  the  remaining balance of the Partnership's
investment  in the sales-type lease.  The write-down was based on the comparison
of  the  net  estimated fair value of the Partnership's interest in the aircraft
and  the  Partnership's  net investment in the sales-type lease.  The write-down
recorded  in  the  six  months  ended  June  30,  2002  was  $17,755.


NOTE  6  -  RELATED  PARTY  TRANSACTIONS
----------------------------------------

All  operating expenses incurred by the Partnership are paid by EFG on behalf of
the  Partnership and EFG is reimbursed at its actual cost for such expenditures.
Fees  and  other costs incurred during the six month periods ended June 30, 2002
and  2001,  which  were  paid  or  accrued  by  the  Partnership  to  EFG or its
Affiliates,  are  as  follows:
<TABLE>
<CAPTION>


                                   2002      2001
                                 --------  --------
<S>                              <C>       <C>
Equipment management fees        $ 11,623  $ 21,455
Administrative charges             54,866    27,930
Reimbursable operating expenses
   due to third parties           178,234   287,872
                                 --------  --------

          Total                  $244,723  $337,257
                                 ========  ========
</TABLE>


All  rents  and  the  proceeds  from  the sale of equipment are paid directly to
either  EFG  or  to  a  lender.  EFG  temporarily  deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At June 30, 2002, the Partnership was owed $17,165 by EFG for such funds.  These
funds  were  remitted  to  the  Partnership  in  July  2002.

The  discussion  of  the loan to Echelon Residential Holdings in Note 4 above is
incorporated  herein  by  reference.


NOTE  7  -  NOTE  PAYABLE
-------------------------

The Partnership has a note payable outstanding at June 30, 2002 in the amount of
$930,021.  This  installment  note  is  non-recourse  and  is  collateralized by
Partnership's  interest  in  an  aircraft leased to Aerovias de Mexico, S. A. de
C.V.  and  assignment  of the related lease payments.  This indebtedness bears a
fixed interest rate of 7.65%, principal is amortized monthly and the Partnership
has a balloon payment obligation at the expiration of the lease term of $404,138
in  September  2004.

Management  believes  that  the carrying amount of the note payable approximates
fair  value  at  June  30, 2002 based on its experience and understanding of the
market  for  instruments  with  similar  terms.

The  annual  maturities  of  the  note  payable  are  as  follows:
<TABLE>
<CAPTION>

<S>                             <C>    <C>
  For the year ending June 30,   2003  $   233,265
                                 2004      249,412
                                 2005      447,344
                                       -----------
..                               Total  $   930,021
                                       ===========
</TABLE>



NOTE  8  -  LEGAL  PROCEEDINGS
------------------------------

Action  involving  Rosenblum,  et  al.
--------------------------------------

As  described more fully in the Partnership's Annual Report on Form 10-K for the
year  ended December 31, 2001, the Partnership is a Nominal Defendant along with
ten affiliated partnerships (collectively, the "Partnerships") in a Class Action
Lawsuit, Leonard Rosenblum, et al. v. Equis Financial Group Limited Partnership,
         -----------------------------------------------------------------------
et  al.
-------

The  Defendant's  and  Plaintiff's  Counsel  reached  agreement  on  a  Revised
Stipulation  of  Settlement  (the "Revised Settlement").  As part of the Revised
Settlement,  EFG has agreed to buy the loans made by the Partnerships to Echelon
Residential  Holdings  for an aggregate of $32 million plus interest at 7.5% per
annum,  if  they  are not repaid prior to or at their scheduled maturity date of
September  8, 2002.  The Revised Settlement also provides for the liquidation of
the  Partnerships'  assets,  a  cash  distribution  and  the  dissolution of the
Partnerships  including the liquidation and dissolution of this Partnership.  On
March  1,  2002,  after  a  hearing on the parties' joint motion for preliminary
approval  of  the  Revised  Settlement,  the Court issued an order preliminarily
approving  the Revised Settlement and providing for the mailing of notice to the
Partnership's  Sub-Class  of a hearing on June 7, 2002 on whether the settlement
should  be  finally  approved.  After the hearing the Court issued its Order and
Final Judgment, dated June 12, 2002 and recorded on the Court docket on June 18,
2002,  approving  the  settlement  on  the terms and conditions set forth in the
Revised  Settlement  and  finding  that  the  settlement is fair, reasonable and
adequate  and  directing implementation of its terms and provisions with respect
to  the  Partnerships  and the Partnerships' Sub-class. The 30 day appeal period
expired  on July 18, 2002.  The Partnership has commenced implementing the terms
of  the  Revised Settlement. See further discussion of the Revised Settlement in
Note  9  -  Subsequent  Events.

Action  involving  Transmeridian  Airlines
------------------------------------------

As  described more fully in the Partnership's Annual Report on Form 10-K for the
year  ended December 31, 2001, the Partnership and certain affiliated investment
programs  (collectively, the "Plaintiffs), were involved with certain litigation
with  Transmeridian  Airlines  ("Transmeridian"),  and Atkinson & Mullen Travel,
Inc.,  and  Apple  Vacations,  West, Inc., both d/b/a Apple Vacations ("Apple").

As of March 13, 2002, the parties settled all claims involved in these lawsuits.
The  material  terms  of  settlement  provide:  (i)  in  exchange for payment of
$2,100,000  from  Apple  to the Plaintiffs all claims arising from or related to
the  lawsuits  are  dismissed  with  prejudice;  (ii)  the Plaintiffs shall have
Allowed  Claims  against the bankruptcy estate of Transmeridian in the aggregate
amount  of  $2,700,000;  (iii)  the  Plaintiffs  will  be paid $400,000 from the
insurance  proceeds  relating to the aircraft loss; and (iv) each of the parties
will  receive  mutual  releases  of  all  claims  and  counterclaims.

The  Partnership has received and recorded approximately $1,563,000 in the first
quarter  of  2002,  as its share of the $2,100,000 payment.  The Partnership has
not  yet  received  or  recorded  its  share  of the $400,000 from the insurance
proceeds.  In  addition,  the  Partnership  recognized $969,686 as income in the
fourth  quarter  of  2001 that had been held in escrow pending the resolution of
the  litigation.


NOTE  9  -  SUBSEQUENT  EVENTS
------------------------------

As  of  August  9,  2002,  the  Partnership  has  transferred  its proportionate
ownership  aircraft  interests  (except for the McDonnell Douglas MD-82 aircraft
currently  leased to Aerovias de Mexico, S.A. de C.V, referred to hereinafter as
the  Retained  Aircraft),  remaining  cash and non-cash assets to the AIRFUND II
International  Limited  Partnership  Liquidating Trust ("Liquidating Trust"), of
which  Wilmington  Trust  Company is Trustee. The Partnership will be dissolved.
The Partnership is currently negotiating the sale of the Retained Aircraft.  The
Liquidating  Trust  is  in  the  process of selling the transferred aircraft, in
which  the  Partnership  has a proportionate ownership interest and distributing
the Partnership's cash, net of reserves for known and contingent liabilities, in
accordance  with  the  terms  of  the  Revised  Settlement.

See  Note  3  "Equipment"  for further description of the Partnership's aircraft
assets.

<PAGE>


                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION



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

Certain  statements in this quarterly report of AIRFUND II International Limited
Partnership  (the  "Partnership")  that  are  not  historical  fact  constitute
"forward-looking  statements"  within  the  meaning  of  the  Private Securities
Litigation  Reform  Act  of  1995  and  are  subject  to  a variety of risks and
uncertainties.  There are a number of factors that could cause actual results to
differ  materially  from  those expressed in any forward-looking statements made
herein.  These  factors  include, but are not limited to, the remarketing of the
Partnership's  aircraft and the performance and liquidation of the Partnership's
non-aircraft  assets.

The  Defendant's  and  Plaintiff's  Counsel  reached  agreement  on  a  Revised
Stipulation  of  Settlement  (the "Revised Settlement").  As part of the Revised
Settlement,  Equis Financial Group Limited Partnership ("EFG") has agreed to buy
the loans made by the Partnerships to Echelon Residential Holdings LLC ("Echelon
Residential Holdings") for an aggregate of $32 million plus interest at 7.5% per
annum,  if  they  are not repaid prior to or at their scheduled maturity date of
September  8, 2002.  The Revised Settlement also provides for the liquidation of
the  Partnerships'  assets,  a  cash  distribution  and  the  dissolution of the
Partnerships  including the liquidation and dissolution of this Partnership.  On
March  1,  2002,  after  a  hearing on the parties' joint motion for preliminary
approval  of  the  Revised  Settlement,  the Court issued an order preliminarily
approving  the Revised Settlement and providing for the mailing of notice to the
Partnership's  Sub-Class  of a hearing on June 7, 2002 on whether the settlement
should  be  finally  approved.  After the hearing the Court issued its Order and
Final Judgment, dated June 12, 2002 and recorded on the Court docket on June 18,
2002,  approving  the  settlement  on  the terms and conditions set forth in the
Revised  Settlement  and  finding  that  the  settlement is fair, reasonable and
adequate  and  directing implementation of its terms and provisions with respect
to  the  Partnerships  and the Partnerships' Sub-class. The 30 day appeal period
expired  on July 18, 2002.  The Partnership has commenced implementing the terms
of  the  Revised  Settlement.

As  of  August  9,  2002,  the  Partnership  has  transferred  its proportionate
ownership  aircraft  interests  (except for the McDonnell Douglas MD-82 aircraft
currently  leased to Aerovias de Mexico, S.A. de C.V, referred to hereinafter as
the  Retained  Aircraft),  remaining  cash and non-cash assets to the AIRFUND II
International  Limited  Partnership  Liquidating Trust ("Liquidating Trust"), of
which  Wilmington  Trust  Company is Trustee. The Partnership will be dissolved.
The Partnership is currently negotiating the sale of the Retained Aircraft.  The
Liquidating  Trust  is  in  the  process of selling the transferred aircraft, in
which  the  Partnership  has a proportionate ownership interest and distributing
the Partnership's cash, net of reserves for known and contingent liabilities, in
accordance  with  the  terms  of  the  Revised  Settlement.

The  Investment  Company Act of 1940 (the "1940 Act") places restrictions on the
capital  structure  and  business activities of companies registered thereunder.
The  Partnership  has  active  business  operations  in  the  financial services
industry,  including  equipment  leasing  and  the  loan  to Echelon Residential
Holdings.  The Partnership does not intend to engage in investment activities in
a  manner  or  to an extent that would require the Partnership to register as an
investment  company  under  the  1940  Act.  However,  it  is  possible that the
Partnership  unintentionally  may have engaged in an activity or activities that
may  be construed to fall within the scope of the 1940 Act.  The General Partner
has  been  engaged  in discussions with the staff of the Securities and Exchange
Commission  regarding  whether  or  not  the  Partnership  may be an inadvertent
investment  company  as a consequence of the above-referenced loan.  In a letter
dated  May  10, 2001, the staff of the SEC informed the general partner that the
staff believes that the Partnership and seven of its affiliated partnerships are
unregistered  investment  companies as defined in Section 3(a)(1)(C) of the 1940
Act.  The  1940  Act,  among  other things, prohibits an unregistered investment
company  from  offering  securities  for  sale  or  engaging  in any business in
interstate  commerce  and,  consequently,  leases  and contracts entered into by
partnerships  that  are  unregistered  investment companies may be voidable. The
General  Partner  has consulted counsel and believes that the Partnership is not
an  investment  company.


Critical  Accounting  Policies  and  Estimates
----------------------------------------------

The preparation of financial statements in conformity with accounting principles
generally  accepted  in  the  United States requires the General Partner to make
estimates  and  assumptions  that  affect  the amounts reported in the financial
statements.  On a regular basis, the General Partner reviews these estimates and
assumptions  including  those  related  to  revenue recognition, asset lives and
depreciation,  allowance  for  doubtful  accounts,  allowance  for  loan  loss,
impairment of long-lived assets and contingencies.  These estimates are based on
the  General  Partner's  historical  experience and on various other assumptions
believed  to  be  reasonable under the circumstances.  Actual results may differ
from  these  estimates  under  different assumptions or conditions.  The General
Partner  believes,  however,  that  the  estimates,  including  those  for  the
above-listed  items,  are  reasonable.

The  General  Partner believes the following critical accounting policies, among
others,  are  subject  to  significant  judgments  and  estimates  used  in  the
preparation  of  these  financial  statements:

Revenue  Recognition:  Rents are payable to the Partnership monthly or quarterly
---------------------
and  no  significant amounts are calculated on factors other than the passage of
time.  The  majority  of the Partnership's leases are accounted for as operating
leases  and  are  noncancellable.  Rents  received  prior to their due dates are
deferred.  Lease  payments  for  the  sales-type  lease  are due monthly and the
related  revenue  is  recognized  by a method which produces a constant periodic
rate  of  return  on  the  outstanding  investment  in  the  lease.

Asset lives and depreciation method: The Partnership's primary business involves
------------------------------------
the  purchase  and  subsequent lease of long-lived equipment.  The Partnership's
depreciation  policy  is  intended  to  allocate  the cost of equipment over the
period  during  which  it  produces  economic  benefit.  The principal period of
economic benefit is considered to correspond to each asset's primary lease term,
which  generally  represents  the  period of greatest revenue potential for each
asset.  Accordingly,  to the extent that an asset is held on primary lease term,
the Partnership depreciates the difference between (i) the cost of the asset and
(ii)  the  estimated  residual  value of the asset on a straight-line basis over
such  term.  For  purposes  of  this policy, estimated residual values represent
estimates  of  equipment values at the date of the primary lease expiration.  To
the  extent that an asset is held beyond its primary lease term, the Partnership
continues  to  depreciate  the  remaining  net  book  value  of  the  asset on a
straight-line  basis  over  the  asset's  remaining  economic  life.

Allowance  for  doubtful  accounts:  The  Partnership  maintains  allowances for
-----------------------------------
doubtful  accounts  for  estimated  losses  resulting  from the inability of the
-----
lessees  to  make  the  lease  payments  required  under  the  contracted  lease
-----
agreements.  These  estimates are primarily based on the amount of time that has
-----
elapsed  since  the  related  payments  were  due  as well as specific knowledge
related  to  the  ability  of the lessees to make the required payments.  If the
financial condition of the Partnership's lessees were to deteriorate, additional
allowances  could  be required that would increase expenses.  Conversely, if the
financial  condition  of  the  lessees  were  to improve or if legal remedies to
collect  past  due  amounts were successful, the allowance for doubtful accounts
could  be  reduced,  thereby  decreasing  expenses.

Allowance  for  loan  losses:  The  Partnership  periodically  evaluates  the
-----------------------------
collectibility  of  its  loan's  contractual  principal  and  interest  and  the
---------
existence  of  loan  impairment  indicators,  including contemporaneous economic
--------
conditions,  situations  which  could affect the borrower's ability to repay its
----
obligation, the estimated value of the underlying collateral, and other relevant
--
factors.  Real  estate  values  are discounted using a present value methodology
over  the  period  between  the  financial  reporting  date  and  the  estimated
disposition  date  of  each property.  A loan is considered to be impaired when,
based  on  current  information  and events, it is probable that the Partnership
will  be unable to collect all amounts due according to the contractual terms of
the loan agreement, which includes both principal and interest.  A provision for
loan  losses is charged to earnings based on the judgment of the General Partner
of  the  amount  necessary  to maintain the allowance for loan losses at a level
adequate  to  absorb  probable  losses.

Impairment  of  long-lived  assets:  On  a  regular  basis,  the General Partner
-----------------------------------
reviews  the  net  carrying  value  of  equipment to determine whether it can be
------
recovered  from  undiscounted  future cash flows.  Adjustments to reduce the net
-----
carrying  value of equipment are recorded in those instances where estimated net
--
realizable  value is considered to be less than net carrying value.  Inherent in
the  Partnership's  estimate  of net realizable values are assumptions regarding
estimated  future  cash  flows.  If these assumptions or estimates change in the
future, the Partnership could be required to record impairment charges for these
assets.

Contingencies  and  litigation:  The Partnership is subject to legal proceedings
-------------------------------
involving  ordinary  and  routine  claims related to its business.  The ultimate
legal  and  financial liability with respect to such matters cannot be estimated
with  certainty  and  requires the use of estimates in recording liabilities for
potential litigation settlements.  Estimates for losses from litigation are made
after  consultation  with  outside  counsel.  If  estimates  of potential losses
increase  or  the  related  facts  and  circumstances  change in the future, the
Partnership  may  be  required  to  adjust  amounts  recorded  in  its financial
statements.


Results  of  Operations
-----------------------

For  the  three  and  six  month  periods  ended  June 30, 2002, the Partnership
recognized  operating  lease  revenue  of  $111,543  and $197,738, respectively,
compared  to  $155,113 and $311,108, respectively, for the same periods in 2001.
The  decrease  in  operating lease revenue from 2001 to 2002 resulted from lease
term expirations.  In the future, operating lease revenue is expected to decline
due  to  lease  term  expirations  and  aircraft  sales.

The  Boeing  737-2H4  aircraft,  in  which  the  Partnership  holds an ownership
interest, was re-leased in September 2000 to Air Slovakia BWJ Ltd., with a lease
term  expiring in September 2003.  In accordance with a lease amendment executed
in  January  2002, the lease term was revised and the lease terminated in August
2002,  with  the  title  to  the  aircraft  transferring  to  Air Slovakia.  The
Partnership recognized operating lease revenue of $40,969 and $58,995 during the
six  months  ended  June  30,  2002 and 2001, respectively.  In August 2002, the
lease  terminated  and  the title of the aircraft transferred to Air Slovakia in
accordance  with  the  amended  lease.

A  McDonnell Douglas MD-82 aircraft, in which the Partnership holds an ownership
interest,  was  re-leased in September 2000 to Aerovias de Mexico, S.A. de C.V.,
with  a lease term expiring in September 2004.  The Partnership recognized lease
revenue  of  $147,044  related  to  this  aircraft  during each of the six month
periods  ended  June  30,  2002  and  2001.

A  second  McDonnell  Douglas  MD-82  aircraft, in which the Partnership holds a
proportionate  interest,  was  leased to Finnair OY though April 2001.  In April
2001,  the lessee returned the aircraft, which the General Partner is attempting
to  remarket.  The  Partnership  recognized  operating lease revenue of $158,927
related  to  this  aircraft  during  the  six  months  ended  June  30,  2001.

In  October  2000,  the  Partnership  and  certain  of its affiliates executed a
conditional  sales  agreement  with  Royal  Aviation  Inc.  for  the sale of the
Partnership's  interest  in  a  Boeing 737-2H4 aircraft.  This aircraft had been
stored  in  the  warehouse from January 2000 through the date of the conditional
sale  in  October  2000.  The  title  to  the  aircraft was to transfer to Royal
Aviation  Inc.,  at  the  expiration  of the lease term in January 2002.  In the
fourth quarter of 2001, Royal Aviation Inc. declared bankruptcy and as a result,
has  defaulted  on  the  conditional  sales  agreement.  The  General Partner is
continuing  to  negotiate  for the return of the aircraft.  As of June 30, 2002,
the  Partnership  has  written-down  the  remaining balance of the Partnership's
investment  in the sales-type lease.  The write-down was based on the comparison
of  estimated  fair  value of the Partnership's interest in the aircraft and the
Partnership's  net  investment in the sales-type lease.  The write-down recorded
in the six months ended June 30, 2002 was $17,755.  For the three and six months
ended  June  30,  2001,  the  Partnership recognized sales-type lease revenue of
$3,351  and  $6,702,  respectively.

The  Partnership's  aircraft  interests  represent  proportionate  ownership
interests.  In  such  cases,  the remaining interests are owned by an affiliated
equipment  leasing program sponsored by EFG.  The Partnership and each affiliate
individually  report,  in  proportion  to  their respective ownership interests,
their  respective  shares  of  assets,  liabilities,  revenues,  and  expenses
associated  with  the  aircraft.

Interest  income  for  the  three  and six month periods ended June 30, 2002 was
$20,861  and  $39,512,  respectively,  compared  to  $38,022  and  $212,829,
respectively,  for  the  same  periods  in  2001.  Interest  income is typically
generated  from  temporary  investment  of  rental  receipts  and equipment sale
proceeds  in  short-term  instruments and interest earned on the loan receivable
from  Echelon  Residential  Holdings.

Interest  income  included  $144,686  during the six months ended June 30, 2001,
earned  on  the  loan  receivable  from  Echelon  Residential  Holdings.  The
Partnership ceased accruing interest on this loan, effective April 1, 2001.  See
further  discussion  below.

In  the  fourth  quarter  of  2001, a court judgment was entered in favor of the
Partnership  and certain affiliates related to the litigation with Transmeridian
Airlines.  The  Partnership  received  settlement  proceeds  of  approximately
$1,563,000  from  the  defendants  in  March 2002, which was recognized as other
income  in  the  first  quarter  of  2002.

The  total  economic  value  realized upon final disposition of each aircraft is
comprised  of  all  primary  lease  term  revenue  generated from that aircraft,
together with its residual value.  The latter consists of cash proceeds realized
upon  the  aircraft's  sale in addition to all other cash receipts obtained from
renting  the  aircraft  on  a  re-lease,  renewal  or  month-to-month  basis.
Consequently,  the  amount  of any future gain or loss reported in the financial
statements  may  not  necessarily  be indicative of the total residual value the
Partnership  achieved  from  leasing  the  aircraft.

For  the  three  and  six  month  periods  ended  June 30, 2002, the Partnership
incurred  interest  expense  of  $18,136  and $37,314, respectively, compared to
$31,637  and $49,030, respectively for the same periods in 2001.  In the future,
interest  expense  will  decline as the principal balance of the note payable is
reduced  through  the  application  of  rent  receipts  to the outstanding debt.

Management  fees  were  $5,577  and $11,623, respectively, for the three and six
months  ended  June  30, 2002 compared to $10,705 and $21,455, respectively, for
the  same  periods  in  2001.  Management  fees  are  based on 5% of gross lease
revenue  generated  by  leases  and 2% of gross revenue generated by full payout
leases.

Bad debt expense was $22,999 during the six months ended June 30, 2002 including
the  write-down  of the remaining balance of the Partnership's investment in the
sales-type  lease.  The write-down was based on the comparison of estimated fair
value  of  the  Partnership's interest in the aircraft and the Partnership's net
investment  in  the  sales-type  lease.

During  the  second  quarter  of  2001,  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $318,500, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable from inception through March 31, 2001 and ceased accruing interest on
its  loan receivable from Echelon Residential Holdings, effective April 1, 2001.

During  the  second  quarter  of  2002,  the  Partnership received $563,926 from
Echelon  Residential  Holdings  for  interest due on the loan.  As a result, the
Partnership  reversed  $563,926  of  the  allowance recorded against the accrued
interest receivable balance, which is reflected as "Recovery of bad debt expense
from  loan  receivable"  in  the  Statement  of  Operations.

Operating  expenses  were $138,186 and $233,100, respectively, for the three and
six  month  periods  ended  June  30,  2002,  compared to $174,370 and $315,802,
respectively,  for  the  same  periods  in  2001.  In  2001,  operating expenses
included  approximately  $59,000  related  to  the  Class Action Lawsuit.  Other
operating  expenses  consist principally of administrative charges, professional
service  costs,  such  as  audit  and  other  legal  fees, as well as insurance,
printing,  distribution  and  remarketing expenses.  In certain cases, equipment
storage  or  repairs  and  maintenance  costs may be incurred in connection with
equipment  being  remarketed.

Depreciation  expense  was $65,345 and approximately $130,690, respectively, for
each  of  the  three  and  six  month  periods  ended  June  30,  2002 and 2001.

During  the  three  months  ended  June  30,  2002,  the  Partnership recorded a
write-down of equipment, representing an impairment to the carrying value of the
Partnership's  interest in two McDonnell Douglas MD-82 aircraft and a Boeing 737
aircraft.  The  resulting  charge  of  $231,189  was  based  on  a comparison of
estimated  fair  value  and carrying value of the Partnership's interests in the
aircraft.  The  estimate  of  the fair value was based on (i) a current offer to
purchase  one  of  the  McDonnell  Douglas  MD-82  aircraft, (ii) indications of
interest  from  potential  purchasers  of  the  second  McDonnell  Douglas MD-82
aircraft, (iii) the sale of the Boeing 737 aircraft subsequent to June 30, 2002,
and  (iv) EFG's assessment of prevailing market conditions for similar aircraft.
Aircraft  condition,  age,  passenger  capacity,  distance  capability,  fuel
efficiency,  and  other  factors  influence  market demand and market values for
passenger  jet  aircraft.  The  events  of  September  11,  2001,  along  with a
recession  in  the  United  States have continued to adversely affect the market
demand  for  both  new  and  used  commercial  aircraft.

During  the  three  months  ended June 30, 2001, the Partnership also recorded a
write-down of equipment, representing an impairment to the carrying value of the
Partnership's  interest  in a McDonnell Douglas MD-82 aircraft returned in April
2001  and  currently off lease.  The resulting charge of $125,000 was based on a
comparison  of  estimated  fair  value  and  carrying value of the Partnership's
interest  in  the  aircraft.  The  estimate  of  the fair value was based on (i)
information  provided by a third-party aircraft broker and (ii) EFG's assessment
of  prevailing market conditions for similar aircraft.  Aircraft condition, age,
passenger  capacity,  distance  capability,  fuel  efficiency, and other factors
influence  market  demand  and  market  values  for  passenger  jet  aircraft.

Liquidity  and  Capital  Resources  and  Discussion  of  Cash  Flows
--------------------------------------------------------------------

The Partnership by its nature is a limited life entity.  See previous discussion
regarding  the Partnership's dissolution.  The Partnership's principal operating
activities  derive  from  aircraft  rental  transactions.  Accordingly,  the
Partnership's  principal source of cash from operations is generally provided by
the  collection  of periodic rents.  These cash inflows are used to satisfy debt
service obligations associated with leveraged leases, and to pay management fees
and  operating  costs.  Operating  activities  generated  net  cash  inflows  of
$1,756,265  and  $145,958  for  the  six  months  ended  June 30, 2002 and 2001,
respectively.  The  increase  in  cash  inflow  in  2002 reflects the receipt of
approximately  $1,563,000  of  litigation  settlement proceeds and approximately
$564,000  of  interest  earned  on  the loan receivable from Echelon Residential
Holdings.

The  loan  made  by the Partnership to Echelon Residential Holdings is, and will
continue  to  be,  subject  to  various  risks, including the risk of default by
Echelon  Residential  Holdings, which could require the Partnership to foreclose
under  the  pledge  agreement  on  its interests in Echelon Residential LLC. The
ability of Echelon Residential Holdings to make loan payments and the amount the
Partnership  may  realize  after  a  default  would  be dependent upon the risks
generally  associated  with  the real estate lending business including, without
limitation,  the existence of senior financing or other liens on the properties,
general  or  local economic conditions, property values, the sale of properties,
interest  rates,  real  estate  taxes,  other operating expenses, the supply and
demand  for  properties involved, zoning and environmental laws and regulations,
rent  control  laws  and other governmental rules.  The Partnership periodically
evaluates  the  collectibility  of the loan's contractual principal and interest
and  the  existence  of  loan  impairment  indicators.

During  the  second  quarter  of  2001,  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $318,500, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March  31,  2001  and  ceased accruing interest on its loan
receivable  from  Echelon Residential Holdings, effective April 1, 2001.  During
the  quarter  ended June 30, 2002, the Partnership received a partial payment of
the  interest  due  on  this  loan  as  discussed  above.

The  Restated Agreement, as amended, prohibits the Partnership from making loans
to  the General Partner or its affiliates.  Since the acquisition of the several
parcels  of  real  estate  from the owner had to occur prior to the admission of
certain independent third parties as equity owners, Echelon Residential Holdings
and  its  wholly  owned  subsidiary,  Echelon  Residential  LLC,  were formed in
anticipation  of  their  admission.  The General Partner agreed to an officer of
the Manager serving as the initial equity holder of Echelon Residential Holdings
and  as  an  unpaid  manager of Echelon Residential Holdings. The officer made a
$185,465  equity  investment in Echelon Residential Holdings.  His return on his
equity  investment  is restricted to the same rate of return as the partnerships
realize  on their loans.  There is a risk that structuring the loan this way may
be  in  violation  of  the  prohibition  against  loans  to  affiliates  in  the
Partnership  Agreements.
The  Partnership  obtained  long-term  financing  in  connection  with  certain
aircraft.  The origination of such indebtedness and the subsequent repayments of
principal are reported as components of financing activities in the accompanying
Statement  of  Cash  Flows.  The  Partnership's  outstanding  loan  agreement is
recourse  only  to  the  specific  aircraft  financed  and to the minimum rental
payments  contracted  to  be received during the debt amortization period (which
coincides  with the lease term).  As rental payments are collected, a portion or
all  of  the  rental  payment  is  used  to  repay  associated indebtedness.  In
addition,  the  Partnership has a balloon payment obligation as discussed below.

In  February  2001, the Partnership's and certain affiliated investment programs
collectively,  (the  "Programs")  refinanced  the  outstanding  indebtedness and
accrued interest related to the aircraft on lease to Aerovias de Mexico, S.A. de
C.V.  In  addition  to refinancing the Programs' total existing indebtedness and
accrued  interest  of $4,758,845, the Programs received additional debt proceeds
of  $3,400,177.  The  Partnership's  aggregate  share  of the refinanced and new
indebtedness  was  $1,211,860  including  $706,831  used  to  repay the existing
indebtedness  on the refinanced aircraft.  The Partnership used a portion of its
share of the additional proceeds of $505,028 to repay the outstanding balance of
the  indebtedness  and  accrued interest related to another aircraft of $130,852
and  certain  aircraft reconfiguration costs that the Partnership had accrued at
December  31,  2000.  The new indebtedness bears a fixed interest rate of 7.65%,
principal  is  amortized  monthly  and  the  Partnership  has  a balloon payment
obligation  at  the  expiration of the lease term of $404,138 in September 2004.

There  are no formal restrictions under the Restated Agreement, as amended, that
materially  limit  the  Partnership's  ability to pay cash distributions, except
that  the General Partner may suspend or limit cash distributions to ensure that
the  Partnership  maintains  sufficient working capital reserves to cover, among
other  things, operating costs and potential expenditures, such as refurbishment
costs  to remarket aircraft upon lease expiration.  In addition, the Partnership
has  retained  funds  in  connection  with  the  Class  Action  Lawsuit.

The  management  and  remarketing  of  aircraft can involve, among other things,
significant  costs  and  lengthy  remarketing  initiatives.  Although  the
Partnership's lessees are required to maintain the aircraft during the period of
lease  contract,  repair,  maintenance,  and/or  refurbishment  costs  at  lease
expiration can be substantial.  For example, an aircraft that is returned to the
Partnership  meeting  minimum  airworthiness  standards, such as flight hours or
engine  cycles,  nonetheless may require heavy maintenance in order to bring its
engines,  airframe  and  other  hardware  up  to  standards that will permit its
prospective  use  in  commercial  air  transportation.

At  June  30,  2002,  the  Partnership's  equipment portfolio included ownership
interests  in  three  commercial  jet  aircraft,  one  of  which is a Boeing 737
aircraft.  The  Boeing  737  aircraft  is a Stage 2 aircraft, meaning that it is
prohibited  from  operating  in the United States unless it is retro-fitted with
hush-kits  to meet Stage 3 noise regulations promulgated by the Federal Aviation
Administration.  In  August  2002,  the  title  to  this Boeing 737 aircraft was
transferred  to  Air  Slovakia  BWJ,  Ltd.  in  accordance with the terms of the
amended  lease  agreement.  The  remaining  two  aircraft  in  the Partnership's
portfolio  already are Stage 3 compliant.  The lease term associated with one of
the  McDonnell  Douglas  MD-82  aircraft  expired  in  2001  and the aircraft is
currently  off  lease.

Recent  changes in the economic condition of the airline industry have adversely
affected  the  demand  for and market values for commercial jet aircraft.  These
changes  could  adversely  affect  the  operations  of  the  Partnership and the
residual  value of its commercial jet aircraft.  Currently, one of the McDonnell
Douglas  MD-82  commercial  jet  aircraft  in  which  the  Partnership  has  a
proportionate  ownership interest is subject to a contracted lease agreement and
the  other  McDonnell Douglas MD-82 aircraft was returned to the General Partner
upon  its  lease expiration in April 2001.  The General Partner is attempting to
remarket  this  aircraft.  The remaining aircraft was leased to Air Slovakia BWJ
Ltd.  as  discussed  above.

In  any  given  year,  it  is  possible that Recognized Owners will be allocated
taxable  income  in  excess  of  distributed cash.  This discrepancy between tax
obligations  and  cash  distributions may or may not continue in the future, and
cash  may  or  may  not  be  available for distribution to the Recognized Owners
adequate  to  cover  any  tax  obligation.

Cash  distributions when paid to the Recognized Owners generally consist of both
a  return  of  and a return on capital.  Cash distributions do not represent and
are not indicative of yield on investment.  Actual yield on investment cannot be
determined  with  any  certainty until conclusion of the Partnership and will be
primarily  dependent  upon  the  proceeds  realized  from the liquidation of the
Partnership's  remaining  assets  offset  by  the  associated  costs  of  such
liquidation  and  dissolution  of  the  Partnership.


The  Partnership's  capital  account  balances  for  federal  income tax and for
financial reporting purposes are different primarily due to differing treatments
of  income  and expense items for income tax purposes in comparison to financial
reporting  purposes  (generally referred to as permanent or timing differences).
For instance, selling commissions and organization and offering costs pertaining
to syndication of the Partnership's limited partnership units are not deductible
for  federal  income  tax purposes, but are recorded as a reduction of partners'
capital  for  financial  reporting  purposes.  Therefore,  such  differences are
permanent  differences  between  capital  accounts  for  financial reporting and
federal  income  tax  purposes.  Other  differences between the bases of capital
accounts  for  federal  income tax and financial reporting purposes occur due to
timing  differences  consisting  of  the cumulative difference between income or
loss  for  tax  purposes  and  financial  statement  income  or  loss.

For  financial reporting purposes, the General Partner has accumulated a capital
deficit at June 30, 2002.  This is the result of aggregate cash distributions to
the  General  Partner  being in excess of its capital contribution of $1,000 and
its  allocation  of  financial  statement  net  income or loss.  Ultimately, the
existence  of  a capital deficit for the General Partner for financial reporting
purposes is not indicative of any further capital obligations to the Partnership
by  the General Partner.  The Restated Agreement, as amended, requires that upon
the  dissolution  of  the  Partnership,  the General Partner will be required to
contribute to the Partnership an amount equal to any negative balance, which may
exist  in  the General Partner's tax capital account.  At December 31, 2001, the
General  Partner  had  a  positive  tax  capital  account  balance.

As  of  August  9,  2002,  the  Partnership  has  transferred  its proportionate
ownership  aircraft  interests  (except for the McDonnell Douglas MD-82 aircraft
currently  leased  to  Aerovias  de  Mexico,  S.A.  de  C.V), remaining cash and
non-cash  assets to the AIRFUND II International Limited Partnership Liquidating
Trust  ("Liquidating  Trust"), of which Wilmington Trust Company is Trustee. The
Partnership  will  be  dissolved.  The  Partnership is currently negotiating the
sale  of  the  Retained  Aircraft.  The  Liquidating  Trust is in the process of
selling  the  transferred aircraft, in which the Partnership has a proportionate
ownership  interest and distributing the Partnership's cash, net of reserves for
known  and  contingent  liabilities, in accordance with the terms of the Revised
Settlement.

Item  3.  Quantitative  and  Qualitative  Disclosures  about  Market  Risk
--------------------------------------------------------------------------

The  Partnership's  financial  statements include financial instruments that are
exposed  to  interest  rate  risks.

The Partnership has one note payable outstanding at June 30, 2002, which bears a
fixed  interest rate of 7.65% and amortizes monthly through September 2004.  The
fair market value of fixed interest rate debt may be adversely impacted due to a
decrease  in  interest  rates.  The  effect of interest rate fluctuations on the
Partnership  during  the  six  months  ended  June  30,  2002  was not material.

The  Partnership's  loan to Echelon Residential Holdings matures on September 8,
2002  and  currently  has a stated fixed annual rate of 18% with interest due at
maturity  (see  discussion above).  Investments earning a fixed rate of interest
may  have  their  fair market value adversely impacted due to a rise in interest
rates.  The  effect of interest rate fluctuations on the Partnership for the six
months  ended  June  30,  2002  was  not  material.

<PAGE>


                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                    FORM 10-Q

                           PART II. OTHER INFORMATION



Item  1.     Legal  Proceedings
     .     Response:

     .     Refer  to  Note  8  to  the  financial  statements  herein.

     Item  2.     Changes  in  Securities
     .     Response:  None

     Item  3.     Defaults  upon  Senior  Securities
     .     Response:  None

     Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders
     .     Response:  None

     Item  5.     Other  Information
     .     Response:  None

     Item  6(a).     Exhibits
     .     Response:

Exhibit  2.13     Amendment  to Subsection 2.2 (f) of the Revised Stipulation of
Settlement  dated  January  29,  2002

Exhibit  2.14     Plan  of  Liquidation  and  Dissolution  dated  July  18, 2002

Exhibit  2.15     Account Agency Agreement between Equis Financial Group Limited
Partnership  and  Wilmington  Trust  Company,  dated  April  11,  2002

Exhibit  2.16     Liquidating  Trust  Agreement  between  the  Partnership  and
Wilmington  Trust  Company  dated  July  18,  2002

Exhibit  99.1     Certification  Pursuant to 18 U.S. C. Section 1350, as Adopted
Pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002

Exhibit  99.2     Certification  Pursuant to 18 U.S. C. Section 1350, as Adopted
Pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002


     Item  6(b).     Reports  on  Form  8-K

Response  :

Form  8-K  dated  July  18, 2002 to include the Court approved settlement of the
Class  Action  Lawsuit.



<PAGE>
SIGNATURE PAGE




Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its



AIRFUND II International Limited Partnership


By:        AFG Aircraft Management Corporation, a
Massachusetts corporation and the General
Partner of the Registrant.


By:        /s/ Michael J. Butterfield
--------------------------------------
Michael J. Butterfield
Treasurer of AFG Aircraft Management Corporation
(Duly Authorized Officer and
Principal Financial and Accounting Officer)


Date:     August 19, 2002
--------------------------