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

                                    FORM 10-Q


                                   (Mark One)

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

                For the quarterly period ended      JUNE 30, 2001
                                               ------------------

                                       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.)

    88 Broad Street, Boston, MA                                        02110
   (Address of principal executive offices)                        (Zip Code)


Registrant's  telephone  number,  including  area  code     (617)  854-5800
                                                        -------------------


(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
   -----

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate  by  check  mark  whether  the  registrant  has filed all documents and
reports  required  to  be  filed  by Sections 12, 13, or 15(d) of the Securities
Exchange  Act  of 1934 subsequent to the distribution of securities under a plan
confirmed  by  a  court.
Yes           No


                                        1
<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, 2001 and December 31, 2000                        3

                Statement of Operations
                for the three and six months ended June 30, 2001 and 2000     4

                Statement of Cash Flows
                for the six months ended June 30, 2001 and 2000               5

                Notes to the Financial Statements                             6


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

     Item 3. Quantitative and Qualitative Disclosures about Market Risk      19


PART II. OTHER INFORMATION:

     Item 1 - 6                                                              20
</TABLE>






















                                        2
<PAGE>


                                        3
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                         STATEMENT OF FINANCIAL POSITION

                       JUNE 30, 2001 AND DECEMBER 31, 2000

                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                            June 30,     December 31,
                                                              2001           2000
ASSETS
<S>                                                       <C>           <C>

Cash and cash equivalents                                 $ 3,208,739   $   2,827,385
Rents receivable                                                4,857         116,820
Accounts receivable - affiliate                               137,655          33,452
Other assets                                                   34,016          24,508
Investment in real estate venture                           3,205,202       3,363,711
Net investment in sales-type lease                            129,043         240,330
Equipment at cost, net of accumulated depreciation
  of $8,408,636 and $8,152,945 at June 30, 2001
  and December 31, 2000, respectively                       2,388,478       2,644,169
                                                          ------------  --------------

      Total assets                                        $ 9,107,990   $   9,250,375
                                                          ============  ==============


LIABILITIES AND PARTNERS' CAPITAL

Notes payable                                             $ 1,142,265   $     906,869
Accrued interest                                                7,525           7,161
Accrued liabilities                                           613,396         591,617
Accrued liabilities - affiliate                                30,061          17,207
Deferred rental income                                              -          27,244
                                                          ------------  --------------
     Total liabilities                                      1,793,247       1,550,098
                                                          ------------  --------------

Partners' capital (deficit):
   General Partner                                         (2,629,720)     (2,610,443)
   Limited Partnership Interests
   (2,714,647 Units; initial purchase price of $25 each)    9,944,463      10,310,720
                                                          ------------  --------------
     Total partners' capital                                7,314,743       7,700,277
                                                          ------------  --------------

     Total liabilities and partners' capital              $ 9,107,990   $   9,250,375
                                                          ============  ==============
</TABLE>







   The accompanying notes are an integral part of these financial statements.
                                        3
<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF OPERATIONS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                                   (UNAUDITED)


<TABLE>
<CAPTION>

<S>                               <C>
                                              For the three months ended  For the six months ended
                                                        June 30,                 June 30,
</TABLE>

<TABLE>
<CAPTION>

                                                    2001        2000        2001        2000
<S>                                              <C>         <C>         <C>         <C>
INCOME

Operating lease revenue                          $ 155,113   $  148,602  $ 311,108   $  258,022
Sales-type lease revenue                             3,351            -      6,702            -
Interest income                                     38,022       37,238     68,143      104,174
Gain on sale of equipment                                -      750,000          -      750,000
Other income                                        29,000      245,977     29,000      300,977
                                                 ----------  ----------  ----------  ----------
  Total income                                     225,486    1,181,817    414,953    1,413,173
                                                 ----------  ----------  ----------  ----------

EXPENSES

Depreciation                                        65,345       79,837    130,691      159,674
Write-down of equipment                            125,000            -    125,000            -
Interest expense                                    31,637       23,388     49,030       54,073
Equipment management fees - affiliate               10,705        7,430     21,455       12,901
Operating expenses - affiliate                     174,370      130,718    315,802      246,995
Partnership's share of unconsolidated
  real estate venture's loss                        83,806       19,775    158,509       23,337
                                                 ----------  ----------  ----------  ----------
  Total expenses                                   490,863      261,148    800,487      496,980
                                                 ----------  ----------  ----------  ----------

Net income (loss)                                $(265,377)  $  920,669  $(385,534)  $  916,193
                                                 ==========  ==========  ==========  ==========



Net income (loss) per limited partnership unit   $   (0.09)  $     0.32  $   (0.13)  $     0.32
                                                 ==========  ==========  ==========  ==========
Cash distributions declared
   per limited partnership unit                  $      --   $       --  $      --   $       --
                                                 ==========  ==========  ==========  ==========
</TABLE>








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

                                        4
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF CASH FLOWS

                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                             2001          2000
<S>                                                       <C>          <C>
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net income (loss)                                         $ (385,534)  $   916,193
Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
  Depreciation                                               130,691       159,674
  Write-down of equipment                                    125,000             -
  Gain on sale of equipment                                        -      (750,000)
  Sales-type lease revenue                                    (6,702)            -
  Partnership's share of unconsolidated
    real estate venture's loss                               158,509        23,337
Changes in assets and liabilities:
  Rents receivable                                           111,963             -
  Accounts receivable - affiliate                           (104,203)       (1,684)
  Other assets                                                (9,508)       31,742
  Collections on net investment in sales-type lease          117,989             -
  Accrued interest                                               364        (4,493)
  Accrued liabilities                                         21,779      (237,144)
  Accrued liabilities - affiliate                             12,854       (68,572)
  Deferred rental income                                     (27,244)      (25,775)
                                                          -----------  ------------
    Net cash provided by operating activities                145,958        43,278
                                                          -----------  ------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Proceeds from equipment sales                                      -       750,000
Investment in real estate venture                                  -    (3,640,000)
                                                          -----------  ------------
    Net cash provided by (used in) investing activities            -    (2,890,000)
                                                          -----------  ------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable                                  505,028       201,247
Principal payments - notes payable                          (269,632)     (130,205)
                                                          -----------  ------------
    Net cash provided by financing activities                235,396        71,042
                                                          -----------  ------------

Net increase (decrease) in cash and cash equivalents         381,354    (2,775,680)
Cash and cash equivalents at beginning of period           2,827,385     5,719,642
                                                          -----------  ------------
Cash and cash equivalents at end of period                $3,208,739   $ 2,943,962
                                                          ===========  ============

SUPPLEMENTAL INFORMATION
Cash paid during the period for interest                  $   48,666   $    58,566
                                                          ===========  ============
</TABLE>


See  Note  8  to  the  financial  statements  regarding  the  refinancing of the
Partnership's  notes  payable  in  February  2001.


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

                                        5
<PAGE>
                                     ------

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                        NOTES TO THE FINANCIAL STATEMENTS


                                  JUNE 30, 2001

                                   (UNAUDITED)

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

The  financial  statements  presented  herein  are  prepared  in conformity with
accounting  principles  generally  accepted  in  the  United  States for interim
financial  reporting  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 accounting principles generally accepted
in  the  United  States  for complete financial statements and, accordingly, the
accompanying  financial  statements  should  be  read  in  conjunction  with the
footnotes  presented  in  the  2000  Annual Report.  Except as disclosed herein,
there  has been no material change to the information presented in the footnotes
to  the  2000  Annual  Report.

In  the  opinion  of  management,  all  adjustments  (consisting  of  normal and
recurring  adjustments)  considered  necessary  to  present fairly the financial
position  at  June  30, 2001 and December 31, 2000 and results of operations for
the  three and six month periods ended June 30, 2001 and 2000 have been made and
are reflected.  Operating results for the six months ended June 30, 2001 are not
necessarily  indicative of the results that may be expected for the entire year.


NOTE  2  -  CASH
----------------

At  June  30,  2001,  AIRFUND  II  International  Limited  Partnership  (the
"Partnership")  had  $3,109,515  invested  in  federal  agency  discount  notes,
repurchase  agreements  secured  by  U.S.  Treasury  Bills  or interests in U.S.
Government  securities,  or  other  highly  liquid  overnight  investments.


NOTE  3  -  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 and 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.  See also Note 9 to the
financial  statements  regarding the Class Action Lawsuit.  Future minimum rents
for  operating  leases  of  $1,186,927  are  due  as  follows:
<TABLE>
<CAPTION>

<S>                           <C>    <C>
For the year ending June 30,   2002  $  412,079
                               2003     412,079
                               2004     313,754
                               2005      49,015
                                     ----------

 .                             Total  $1,186,927
                                     ==========
</TABLE>


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.  Future minimum lease payments for the
sales-type lease of $137,418 are due through the date of the lease expiration in
January  2002.

                                        6
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                 NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED)

                                  JUNE 30, 2001

                                   (UNAUDITED)


NOTE  4  -  EQUIPMENT
---------------------

The  following  is  a  summary of equipment owned by the Partnership at June 30,
2001.  Remaining  Lease  Term  (Months), as used below, represents the number of
months  remaining  from June 30, 2001 under contracted lease terms.  A Remaining
Lease  Term  equal to zero reflects equipment held for sale or re-lease.  In the
opinion  of  EFG,  the acquisition cost of the equipment did not exceed its fair
market  value.
<TABLE>
<CAPTION>


                                                  Remaining
                                                    Lease
                                                     Term      Equipment
      Equipment Type                               (Months)     at Cost
------------------------------------------------  ----------  ------------
<S>                                               <C>         <C>
Two Rolls Royce aircraft engines (Off Lease)               0  $ 6,000,000
One McDonnell-Douglas MD-82
(Aerovias de Mexico S.A. de C.V.)                         38    2,078,640
One McDonnell-Douglas MD-82 (Off Lease)                    0    2,078,640
One Boeing 737-2H4 (Air Slovakia)                         26      639,834
                                                              ------------
     Total equipment cost                                  .   10,797,114
     Accumulated depreciation                              .   (8,408,636)
                                                              ------------
     Equipment, net of accumulated depreciation            .  $ 2,388,478
                                                              ============
</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.

One  of the Partnership's aircraft and the related lease payment streams secures
the  Partnership's  loan  with a third-party lender (see Note 8).  The preceding
summary  includes  leveraged  equipment having an original cost of approximately
$2,079,000  and  a  net book value of approximately $1,165,000 at June 30, 2001.
The  Rolls  Royce  aircraft engines were fully depreciated prior to December 31,
2000.

At  June  30,  2001,  a  McDonnell  Douglas  MD-82 aircraft previously leased to
Finnair  OY  and  the Partnership's Rolls Royce aircraft engines were off lease.
The  Partnership's  interest  in  this  aircraft  had  an  original  cost  of
approximately  $2,079,000  and  a  net book value of approximately $1,040,000 at
June  30,  2001.  The  aircraft  engines  had a cost of $6,000,000 and have been
fully  depreciated.  The General Partner is attempting to remarket this aircraft
and  the  Rolls  Royce  aircraft  engines.

The  Partnership accounts for impairment of long-lived assets in accordance with
Statement  of  Financial  Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
which was issued in March 1995.  SFAS No. 121 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, 2001, the Partnership
recorded  a  write-down of equipment, representing an impairment to the carrying
value  of  the  Partnership's  interest  in the McDonnell Douglas MD-82 aircraft
discussed  above.  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.


                                        7
<PAGE>
======
NOTE  5  -  INVESTMENT  IN  REAL  ESTATE  VENTURE
-------------------------------------------------

On March 8, 2000, the Partnership and 10 affiliated partnerships (the ''Exchange
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,  a  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 six 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  Exchange  Partnerships  as  collateral.
The  loan  is  presented, in accordance with the guidance set forth in the Third
Notice  to  Practitioners  by  the  American  Institute  of  Certified  Public
Accountants  in  February  1986 entitled "ADC Arrangements", as an investment in
real estate venture and is presented net of the Partnership's share of losses in
Echelon  Residential  Holdings.  The  Partnership is allocated its proportionate
share  of  the unconsolidated real estate venture's net income or loss, adjusted
for  interest  on  the  ADC  arrangements,  based  on  the  balance  of  its ADC
arrangement  in  relation  to  the  real estate venture's total equity and notes
payable,  including  the  ADC arrangements. For the six month periods ended June
30,  2001  and  2000,  the  Partnership's share of losses in Echelon Residential
Holdings  were  $158,509  and  $23,337,  respectively,  and are reflected on the
Statement  of  Operations as ''Partnership's share of unconsolidated real estate
venture's  loss."
The  Partnership  took  into  consideration the following characteristics of the
loan  in determining that the loan should be accounted for as an investment in a
real  estate  venture:  (i)  the  Exchange  Partnerships  who  made  the  loans
collectively  have  provided substantially all of the necessary funds to acquire
the  underlying  properties  without  taking  title  to such properties, (ii) by
virtue  of a pledged security interest in the wholly owned subsidiary of Echelon
Residential  Holdings that holds title to the properties, the Partnership's loan
is secured only by the underlying properties, (iii) Echelon Residential Holdings
will  only  repay the Partnership at maturity, including all interest accrued on
the loan through maturity, (iv) it is expected that Echelon Residential Holdings
can only repay the loan through sales of undeveloped and developed property; and
(v)  the  structure  of  the loan (i.e. no payments due until maturity) makes it
unlikely  that  the  properties  will  be  taken  in  foreclosure as a result of
delinquency.

                                        8
<PAGE>
The  summarized financial information for Echelon Residential Holdings as of and
for  the  periods  ended  June  30,  2001 and 2000, respectively, is as follows:

                                               (Unaudited)
                                    As  of  and  for  the  periods  ended
                                                  June 30,
<TABLE>
<CAPTION>

                                             2001          2000
                                         ------------  ------------
<S>                                      <C>           <C>
Total assets                             $79,159,776   $54,704,360
Total liabilities                        $85,455,528   $48,386,270
Minority interest                        $ 1,782,982   $ 2,527,750
Total equity (deficit)                   $(8,078,734)  $ 3,790,340

Total revenues                           $ 1,705,679   $   905,751
Total expenses, minority interest
  and equity in loss of unconsolidated
  joint venture                          $ 5,924,774   $ 2,593,700
Net loss                                 $(4,219,095)  $(1,687,949)
</TABLE>



NOTE  6  -  NET  INVESTMENT  IN  SALES-TYPE  LEASE
--------------------------------------------------

The  Partnership's  net  investment  in  a sales-type lease is 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 transfers to Royal
Aviation  Inc.,  at  the expiration of the lease term.  The sale of the aircraft
has  been  recorded  by the Partnership as a sales-type lease, with a lease term
expiring  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.  At  June  30, 2001, the components of the net
investment  in  the  sales-type  lease  are  as  follows:
<TABLE>
<CAPTION>

<S>                                          <C>
Total minimum lease payments to be received  $137,418
Less: Unearned income                           8,375
                                             --------

  Total                                      $129,043
                                             ========
</TABLE>


Unearned  income  is being amortized to revenue over the lease term, expiring in
January  2002.


                                        9
<PAGE>
------
NOTE  7  -  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, 2001
and  2000,  which  were  paid  or  accrued  by  the  Partnership  to  EFG or its
Affiliates,  are  as  follows:
<TABLE>
<CAPTION>


                                   2001      2000
                                 --------  --------
<S>                              <C>       <C>
Equipment management fees        $ 21,455  $ 12,901
Administrative charges             27,930    25,213
Reimbursable operating expenses
   due to third parties           287,872   221,782
                                 --------  --------

          Total                  $337,257  $259,896
                                 ========  ========
</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, 2001, the Partnership was owed $137,655 by EFG for such funds. These
funds  were  remitted  to  the  Partnership  in  July  2001.

The  discussion  of  the loan to Echelon Residential Holdings in Note 5 above is
incorporated  herein  by  reference.


NOTE  8  -  NOTE  PAYABLE
-------------------------

The  Partnership has one note payable outstanding at June 30, 2001 in the amount
of  $1,142,265.  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.

In  February  2001,  the  Partnership 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  $706,832  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 the aircraft then on lease to
Finnair  OY  of  $130,852  and  certain  aircraft reconfiguration costs that the
Partnership  had  accrued  at  December  31,  2000.

Management  believes  that  the carrying amount of the note payable approximates
fair  value  at  June  30, 2001 based on its experience and understanding of the
market  for  instruments  with  similar  terms.

                                       10
<PAGE>
The  annual  maturities  of  the  note  payable  are  as  follows:
<TABLE>
<CAPTION>

<S>                           <C>    <C>
For the year ending June 30,   2002  $  214,125
                               2003     231,100
                               2004     249,412
                               2005     447,628
                                     ----------

  .                           Total  $1,142,265
                                     ==========
</TABLE>



NOTE  9  -  LEGAL  PROCEEDINGS
------------------------------

As  described more fully in the Partnership's Annual Report on Form 10-K for the
year  ended December 31, 2000, the Partnership is a Nominal Defendant in a Class
Action Lawsuit, the outcome of which could significantly alter the nature of the
Partnership's  organization  and  its  future  business  operations.

On  March  12,  2001, after a status conference and hearing, the Court issued an
order that required the parties, no later than May 15, 2001, to advise the Court
on  (a) whether the Securities and Exchange Commission ("SEC") had completed its
review  of the solicitation statement and related materials submitted to the SEC
in  connection  with  the  proposed  settlement,  and  (b)  whether  the parties
requested  the  Court  to  schedule a hearing for final approval of the proposed
settlement  or  were  withdrawing  the  proposed  settlement  from  judicial
consideration  and  resuming  the  litigation  of  the  Plaintiffs'  claims.

On  May  11,  2001,  the  general  partners of the partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies as defined in Section 3(a)(1)(c) of the Investment Company
Act of 1940, as amended (the "1940 Act").  The SEC staff noted that Section 7 of
the  1940  Act makes it unlawful for an unregistered investment company to offer
or  sell  or  purchase  any  security  or  engage  in any business in interstate
commerce.  Accordingly,  Section  7  would  prohibit  any partnership that is an
unregistered  investment  company  from  engaging  in any business in interstate
commerce,  except  transactions  that  are merely incidental to its dissolution.
The  letter also stated that the Division is considering enforcement action with
respect  to  this  matter.  Noting  that the parties to the Class Action Lawsuit
were  scheduled  to  appear  before  the  court in the near future to consider a
proposed settlement, and that the SEC staff's views, as expressed in the letter,
are relevant to the specific matters that will be considered by the court at the
hearing,  the SEC staff submitted the letter to the court for its consideration.

The general partners have consulted with counsel who specializes in the 1940 Act
and, based on counsel's advice, do not believe that the Partnership or the other
Designated  Partnerships are investment companies within the meaning of the 1940
Act.  Counsel  has corresponded and met with the SEC staff to address the issues
concerning  the  Designated  Partnerships'  status under the 1940 Act.  However,
their  status  is unresolved and there is a risk that the Division of Investment
Management may commence enforcement action against the Partnership and the other
Designated  Partnerships  with  respect  to  this  matter.

                                       11
<PAGE>
Plaintiffs'  Counsel  and  Defendants'  Counsel  each  filed  status  reports in
response  to the Court's order on May 15, 2001.  The Court held a hearing on May
28,  2001  at which Plaintiffs' Counsel requested that the case be put back on a
litigation  track  anticipating  his filing a motion for class certification and
discovery leading to the setting of a trial date.  Defendants' Counsel requested
that  the  Court address the issue of whether or not the 1940 Act applies to the
Designated Partnerships and the consolidation under the proposed settlement. The
Court  permitted  Plaintiffs'  Counsel  to  submit a timetable for discovery and
trial  and  at the same time encouraged the parties to continue to work together
with  the SEC in an effort to consummate the proposed settlement.  Subsequently,
the  Court  scheduled a status conference for February 22, 2002 and a trial date
of  March  4,  2002.

                                       12
<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 outcome of the Class
Action Lawsuit described in Note 9 to the accompanying financial statements, the
remarketing  of  the  Partnership's  aircraft  and  the  performance  of  the
Partnership's  non-aircraft  assets.

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  LLC ("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 may unintentionally engage in an
activity  or  activities  that  may be construed to fall within the scope of the
1940  Act.  If  the Partnership were determined to be an unregistered investment
company,  its  business  would be adversely affected.  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.  If necessary, the Partnership intends to
avoid  being  deemed  an  investment  company  by disposing or acquiring certain
assets  that  it  might  not  otherwise  dispose  or  acquire.

On  May  11,  2001,  the  general  partners of the partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies  as  defined  in  Section  3(a)(1)(c) of the 1940 Act. The
letter  also  stated  that  the  Division is considering enforcement action with
respect  to  this  matter.  Noting  that the parties to the Class Action Lawsuit
were  scheduled  to  appear  before  the  court in the near future to consider a
proposed settlement, and that the SEC staff's views, as expressed in the letter,
are relevant to the specific matters that will be considered by the court at the
hearing,  the SEC staff submitted the letter to the court for its consideration.

The general partners have consulted with counsel who specializes in the 1940 Act
and, based on counsel's advice, do not believe that the Partnership or the other
Designated  Partnerships are investment companies within the meaning of the 1940
Act.  Counsel  has corresponded and met with the SEC staff to address the issues
concerning  the  Designated  Partnerships'  status under the 1940 Act.  However,
their  status  is unresolved and there is a risk that the Division of Investment
Management may commence enforcement action against the Partnership and the other
Designated  Partnerships  with  respect  to  this  matter.

                                       13
<PAGE>
Plaintiffs'  Counsel  and  Defendants'  Counsel  each  filed  status  reports in
response  to the Court's order on May 15, 2001.  The Court held a hearing on May
28,  2001  at which Plaintiffs' Counsel requested that the case be put back on a
litigation  track  anticipating  his filing a motion for class certification and
discovery leading to the setting of a trial date.  Defendants' Counsel requested
that  the  Court address the issue of whether or not the 1940 Act applies to the
Designated Partnerships and the consolidation under the proposed settlement. The
Court  permitted  Plaintiffs'  Counsel  to  submit a timetable for discovery and
trial  and  at the same time encouraged the parties to continue to work together
with  the  SEC in an effort to consummate the proposed settlement. See Note 9 to
the  financial  statements  for  additional  discussion.


Three  and  six  months ended June 30, 2001 compared to the three and six months
--------------------------------------------------------------------------------
ended  June  30,  2000:
-----------------------

As  an  equipment  leasing partnership, the Partnership was organized to acquire
and  lease  a  portfolio  of commercial jet aircraft subject to lease agreements
with  third  parties.  During  1990  and  1991,  the  Partnership purchased four
commercial jet aircraft and a proportionate interest in two additional aircraft,
which  were  leased  by  major  carriers,  engaged  in passenger transportation.
Initially, each aircraft generated rental revenue pursuant to primary-term lease
agreements.  Subsequently,  all  of  the  aircraft in the Partnership's original
portfolio  have  been re-leased, renewed, exchanged for other aircraft, or sold.
At  June  30, 2001, the Partnership's equipment portfolio included proportionate
ownership  interests in three aircraft, two of which were on lease at that date.
The  Partnership also has two aircraft engines, which were off lease at June 30,
2001.  In  April  2001,  the  lease term for one of the aircraft expired and the
aircraft  was  returned  by the lessee (see discussion below).  The aircraft off
lease  and  the  remaining  aircraft, upon expiration of their lease agreements,
will  be  re-leased  or  sold  depending  on  prevailing market conditions.   In
addition,  in  2000  the  Partnership entered into a conditional sales agreement
related to its interest in an aircraft.  Presently, the Partnership is a Nominal
Defendant  in  a  Class Action Lawsuit, the outcome of which could significantly
alter  the  nature  of  the  Partnership's  organization and its future business
operations.  (See Note 9 to the accompanying financial statements.)  Pursuant to
the  Amended  and Restated Agreement and Certificate of Limited Partnership (the
"Restated  Agreement, as amended"), the Partnership is scheduled to be dissolved
by  December  31,  2005.


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

For  the  three  and  six  month  periods  ended  June 30, 2001, the Partnership
recognized  operating  lease  revenue  of  $155,113  and $311,108, respectively,
compared  to  $148,602 and $258,022, respectively, for the same periods in 2000.
The  net increase in operating lease revenue from 2000 to 2001 resulted from the
revenue  from  the  re-lease  of certain of the Partnership's aircraft partially
offset  by  an  aircraft  lease  expiration,  as discussed below. In the future,
operating lease revenue is expected to decline due to lease term expirations and
aircraft  sales.

The  lease term associated with a Boeing 737-2H4, in which the Partnership holds
an  ownership interest, expired in December 1999.  The aircraft was re-leased in
September  2000  to  Air  Slovakia  BWJ,  Ltd.,  with  a  lease term expiring in
September  2003.  The  Partnership recognized operating lease revenue of $58,995
for  the  six  month  period  ended  June  30,  2001  related  to this aircraft.

The  lease term associated with a McDonnell Douglas MD-82 aircraft, in which the
Partnership  holds an ownership interest, expired in January 2000.  The aircraft
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 and $29,095 related to this aircraft during the six month periods ended
June  30,  2001  and  2000,  respectively.

The General Partner is attempting to remarket the second McDonnell Douglas MD-82
aircraft, in which the Partnership holds an ownership interest.  This lease term
associated  with  this  aircraft  expired  in  April  2001  and  the aircraft is
currently  off  lease.  The  Partnership  recognized  operating lease revenue of
$105,068  and  $158,927  related  to  this aircraft during the six month periods
ended  June  30,  2001  and  2000,  respectively.

                                       14
<PAGE>
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 off
lease  from  January  2000  through  the date of the conditional sale in October
2000.  The  title  to  the  aircraft  transfers  to  Royal Aviation Inc., at the
expiration of the lease term.  The sale of the aircraft has been recorded by the
Partnership  as  a sales-type lease, with a lease term expiring in January 2002.
For  the  three  and  six  month  period  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 Equis Financial Group Limited Partnership
("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, 2001 was
$38,022  and  $68,143,  respectively,  compared  to  $37,238  and  $104,174,
respectively,  for  the  same  periods  in  2000.  Interest  income is typically
generated  from  temporary  investment  of  rental  receipts  and equipment sale
proceeds  in  short-term  instruments.  The  amount of future interest income is
expected  to  fluctuate as a result of changing interest rates and the amount of
cash  available  for  investment,  among  other  factors.

Other  income  for  the  three  and six months ended June 30, 2000, reflects the
receipt  of  $245,977  of unused aircraft maintenance reserves related to a sold
aircraft  and  $55,000  for  the sale of certain aircraft records, respectively.

In  May  2000,  the  Partnership  sold  its  Boeing  727-251  ADV  aircraft to a
third-party  for  proceeds  of $750,000.  This aircraft was fully depreciated at
the  time of sale, resulting in a net gain, for financial statement purposes, of
$750,000  for  the  three  and  six  months  ended  June  30,  2000.

The  ultimate  realization of residual value for the Partnership's aircraft will
be dependent upon many factors, including EFG's ability to sell and re-lease the
aircraft.  Changing  market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from aircraft values at
any  given time.  EFG attempts to monitor these changes and the airline industry
in  general  in order to identify opportunities which may be advantageous to the
Partnership  and  which  will  maximize  total  cash  returns for each aircraft.

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 gain or loss reported in the financial statements is
not  necessarily indicative of the total residual value the Partnership achieved
from  leasing  the  aircraft.

For the three and six month period ended June 30, 2001, the Partnership incurred
interest  expense  of $31,637 and $49,030, respectively, compared to $23,388 and
$54,073  for  the  same  periods  in 2000.  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  $10,705 and $21,455, respectively, for the three and six
month  periods ended June 30, 2001 and $7,430 and $12,901, respectively, for the
same  periods  in  2000.

Operating  expenses  were  $174,370  and  $315,802  for  the three and six month
periods ended June 30, 2001, respectively, compared to $130,718 and $246,995 for
the  same  periods  in  2000. In 2001, operating expenses included approximately
$59,000 related to the Class Action Lawsuit discussed in Note 9 to the financial
statements  herein.  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.

                                       15
<PAGE>
Depreciation  expense  was $65,345 and $130,691, respectively, for the three and
six  month  periods  ended  June  30,  2001  compared  to  $79,837 and $159,674,
respectively,  for the same periods in 2000.  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.

For the three and six month periods ended June 30, 2001, the Partnership's share
of  losses  in  Echelon  Residential  Holdings  were  $83,806  and  $158,509,
respectively,  compared to $19,775 and $23,337 for the same periods in 2000. The
losses  are  reflected in the Statement of Operations as "Partnership's share of
unconsolidated  real  estate  venture's  loss".  See  further  discussion below.


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

The  Partnership  by  its  nature  is  a limited life entity.  The Partnership's
principal  operating  activities  derive  from  aircraft  rental  transactions.
Accordingly,  the  Partnership's  principal  source  of  cash from operations is
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 a net cash
inflow  of $145,958 and $43,278 for the six months ended June 30, 2001 and 2000,
respectively.  Overall,  expenses  associated  with  rental  activities, such as
management fees, and net cash flow from operating activities will decline as the
Partnership  remarkets  its  aircraft. The Partnership, however, may continue to
incur significant costs to facilitate the successful remarketing of its aircraft
in  the  future.  Ultimately, the Partnership will dispose of all aircraft under
lease.  This  will  occur  principally  through  sale  transactions whereby each
aircraft  will  be  sold to the existing lessee or to a third party.  Generally,
this  will  occur upon expiration of each aircraft's primary or renewal/re-lease
term.

Cash  realized  for  asset  disposal  transactions  is  reported under investing
activities  on  the  accompanying  Statement  of Cash Flows.  For the six months
ended  June  30,  2000,  the  Partnership  realized  $750,000 in equipment sales
proceeds.  There  were no equipment sales in the six months ended June 30, 2001.
Future  inflows  of  cash from aircraft disposals will vary in timing and amount
and  will  be  influenced  by  many  factors  including, but not limited to, the
frequency  and  timing  of  lease  expirations, the type of aircraft being sold,
their  condition  and  age,  and  future  market  conditions.

At  June  30,  2001,  the  Partnership  was  due  aggregate future minimum lease
payments  of  $1,324,345  from  contractual  operating  and  sales-type  lease
agreements  (see Note 3 to the financial statements), a portion of which will be
used  to  amortize  the principal balance of the note payable of $1,142,265 (see
Note  8 to the financial statements).  At the expiration of the individual lease
term underlying the Partnership's future minimum lease payments, the Partnership
will  sell  the  aircraft  or  enter  into  a re-lease or renewal agreement when
considered  by  advantageous  by  the  General Partner or EFG.  In addition, the
General  Partner  and EFG are attempting to remarket the McDonnell-Douglas MD-82
aircraft  and  the  two  aircraft  engines  that  are currently off lease.  Such
remarketing activities will result in the realization of additional cash inflows
in the form of sale proceeds or rents from renewals or re-leases, the timing and
extent  of  which cannot be predicted with certainty. This is because the timing
and extent of remarketing events often is dependent upon the needs and interests
of  the  existing  lessees.  Some  lessees  may  choose  to  renew  their  lease
contracts,  while  others  may  elect  to  return  the  aircraft.  In the latter
instances,  the aircraft could be re-leased to another lessee or sold to a third
party.

                                       16
<PAGE>
In connection with a preliminary settlement agreement for a Class Action Lawsuit
described  in  Note  9  to  the  financial  statements,  the court permitted the
Partnership  to  invest  in any new investment, including but not limited to new
equipment or other business activities, subject to certain limitations. On March
8,  2000,  the  Partnership  loaned  $3,640,000  to  a  newly formed real estate
company, Echelon Residential Holdings, to finance the acquisition of real estate
assets  by  that  company.  Echelon Residential Holdings, through a wholly owned
subsidiary  ("Echelon  Residential LLC"), used the loan proceeds, along with the
loan proceeds from similar loans by ten affiliated partnerships representing $32
million  in  the  aggregate,  to acquire various real estate assets from Echelon
International  Corporation,  an  independent  Florida-based real estate company.
Echelon  Residential  Holding's  interest  in Echelon Residential LLC is pledged
pursuant  to a pledge agreement to the partnerships as collateral for the loans.
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 six months.
Interest  accrues  and  compounds  monthly  and  is  payable  at  maturity.

As  discussed  in  Note 5 to the Partnership's financial statements, the loan is
considered to be an investment in a real estate venture for accounting purposes.
In accordance with the provisions of Statement of Position No. 78-9, "Accounting
for  Investments  in Real Estate Ventures", the Partnership reports its share of
income  or  loss  of  Echelon  Residential  Holdings  under the equity method of
accounting.

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.  A  default  by  Echelon
Residential  Holdings  could  have  a material adverse effect on the future cash
flow  and  operating  results  of  the  Partnership.

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 the court may object to the
general  partner's  action in structuring the loan in this way since the officer
may be deemed an affiliate and the loans in violation of the prohibition against
loans  to  affiliates  and  the  court's  statement  in its order permitting New
Investments  that  all  other provisions of the Partnership Agreements governing
the  investment  objectives and policies of the Partnership shall remain in full
force  and  effect.  The  court  may  require the partnerships to restructure or
divest  the  loan.

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.  See Note 8
to  the  financial statements for the annual maturities of the note payable.  In
addition,  the  Partnership has a balloon payment obligation as discussed below.

                                       17
<PAGE>
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.  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
$706,832  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  the  aircraft then on lease to Finnair OY 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.
In  the  six  months  ended  June  30,  2000,  the  Partnership  refinanced  the
indebtedness  associated  with  the same aircraft and in addition to refinancing
the  existing  indebtedness,  received  additional  debt  proceeds  of $201,247.

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 to the need for
funds  in  connection  with  the  Class  Action Lawsuit, liquidity is especially
important  as  the Partnership matures and sells aircraft, because the remaining
aircraft portfolio consists of fewer revenue-producing assets that are available
to  cover  prospective cash disbursements.  Insufficient liquidity could inhibit
the  Partnership's ability to sustain its operations or maximize the realization
of  proceeds  from  remarketing  its  remaining  aircraft.

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,  2001,  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.  During  2000,  the  aircraft was re-leased to Air Slovakia BWJ,
Ltd.  through  September  2003.The  remaining  two aircraft in the Partnership's
portfolio already are Stage 3 compliant.  One of these aircraft has a lease term
expiring  in  September  2004 and the remaining aircraft is currently off lease.

Recent  changes  in  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 the commercial jet aircraft.  Currently, all of commercial jet
aircraft  in  which  the  Partnership has a proportionate ownership interest are
subject to contracted lease agreements except one McDonnell Douglas MD-82, which
was  returned  to  the  General Partner upon its lease expiration in April 2001.
The  General  Partner  is  attempting  to  remarket  this  aircraft.

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.

                                       18
<PAGE>
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;
see  Note  8  to  the  financial  statements presented in the Partnership's 2000
Annual Report).  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.
The  principal  components  of  the  cumulative  difference  between  financial
statement  income  or  loss  and  tax  income  or  loss  result  from  different
depreciation policies for book and tax purposes and different treatment for book
and  tax  purposes  related  to  the  real  estate  venture.

For  financial reporting purposes, the General Partner has accumulated a capital
deficit at June 30, 2001.  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, 2000, the
General  Partner  had  a  positive  tax  capital  account  balance.

The  Partnership  is  a Nominal Defendant in a Class Action Lawsuit described in
Note 9 to the accompanying financial statements.  The settlement or adjudication
of  that  lawsuit  may materially change the future organizational structure and
business  interests  of  the  Partnership,  as  well  as  its  cash distribution
policies.  In addition, the General Partner will continue to suspend the payment
of  quarterly  cash  distributions  pending final resolution of the Class Action
Lawsuit.  Accordingly,  future  cash  distributions  are not expected to be paid
until  the  Class  Action  Lawsuit  is  settled  or  adjudicated.


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, 2001, which bears a
fixed interest rate of 7.65%.  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 in the six months ended June 30,
2001  was  not  material.

The  Partnership's  acquisition,  development  and  construction loan to Echelon
Residential  Holdings matures on September 8, 2002 and earns interest at a fixed
annual  rate  of  14% for the first 24 months and a fixed annual rate of 18% for
the last 6 months of the loan.  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,  2001  was  not  material.

                                       19
<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                    FORM 10-Q

                           PART II.  OTHER INFORMATION


<TABLE>
<CAPTION>



<S>           <C>

  Item 1.     Legal Proceedings
  .           Response:

  .           Refer to Note 9 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:  None

  Item 6(b).  Reports on Form 8-K
  .           Response:  None
</TABLE>






                                       20
<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 behalf by the
undersigned  thereunto  duly  authorized.



                  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  14,  2001
          -----------------






                                       21
<PAGE>