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      SEPTEMBER 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
   -----



<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 September 30, 2001 and December 31, 2000                         3

                Statement of Operations
                for the three and nine months ended September 30, 2001 and 2000     4

                Statement of Cash Flows
                for the nine months ended September 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                               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

                    SEPTEMBER 30, 2001 AND DECEMBER 31, 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                            September 30,    December 31,
 .                                                               2001             2000
ASSETS                                                            .           (Restated)
                                                           ---------------  --------------
<S>                                                        <C>              <C>

Cash and cash equivalents                                  $    3,134,182   $   2,827,385
Rents receivable                                                   16,481         116,820
Accounts receivable - affiliate                                    71,692          33,452
Other assets                                                       19,438          24,508
Interest receivable - loan, net of allowance of $590,772
  at September 30, 2001                                                 -         446,086
Loan receivable, net of allowance of $318,500
  at September 30, 2001                                         3,321,500       3,640,000
Net investment in sales-type lease                                 73,399         240,330
Equipment at cost, net of accumulated depreciation
  of $2,473,981 and $8,152,945 at September 30, 2001
  and December 31, 2000, respectively                           2,323,133       2,644,169
                                                           ---------------  --------------

      Total assets                                         $    8,959,825   $   9,972,750
                                                           ===============  ==============


LIABILITIES AND PARTNERS' CAPITAL

Notes payable                                              $    1,091,682   $     906,869
Accrued interest                                                    6,264           7,161
Accrued liabilities                                               609,011         591,617
Accrued liabilities - affiliate                                    31,720          17,207
Deferred rental income                                                  -          27,244
                                                           ---------------  --------------
     Total liabilities                                          1,738,677       1,550,098
                                                           ---------------  --------------

Partners' capital (deficit):
   General Partner                                             (2,634,399)     (2,574,324)
   Limited Partnership Interests
   (2,714,647 Units; initial purchase price of $25 each)        9,855,547      10,996,976
                                                           ---------------  --------------
     Total partners' capital                                    7,221,148       8,422,652
                                                           ---------------  --------------

     Total liabilities and partners' capital               $    8,959,825   $   9,972,750
                                                           ===============  ==============
</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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

<S>                                           <C>                        <C>
 .                                              For the three months ended  For the nine months ended
 .                                                 September 30,              September 30,
</TABLE>

<TABLE>
<CAPTION>

                                                    2001         2000         2001         2000
 .                                                (Restated)       .        (Restated)
INCOME
<S>                                              <C>          <C>         <C>           <C>
Operating lease revenue                          $  134,540   $ 106,446   $   445,648   $  364,468
Sales-type lease revenue                              3,351           -        10,053            -
Interest income                                      30,992      50,577        99,135      154,751
Interest income - loan                                    -     137,783       144,686      303,314
Gain on sale of equipment                                 -      43,102             -      793,102
Other income                                              -           -        29,000      300,977
                                                 -----------  ----------  ------------  ----------
  Total income                                      168,883     337,908       728,522    1,916,612
                                                 -----------  ----------  ------------  ----------

EXPENSES

Depreciation                                         65,345      72,591       196,036      232,265
Write-down of equipment                                   -           -       125,000            -
Interest expense                                     21,678      25,399        70,708       79,472
Equipment management fees - affiliate                 4,437       5,322        25,892       18,223
Operating expenses - affiliate                      287,316     440,387       603,118      687,382
Write-down of impaired loan and interest
  receivable                                              -           -       909,272            -
                                                 -----------  ----------  ------------  ----------
  Total expenses                                    378,776     543,699     1,930,026    1,017,342
                                                 -----------  ----------  ------------  ----------

Net income (loss)                                $ (209,893)  $(205,791)  $(1,201,504)  $  899,270
                                                 ===========  ==========  ============  ==========



Net income (loss) per limited partnership unit   $    (0.07)  $   (0.07)  $     (0.42)  $     0.31
                                                 ===========  ==========  ============  ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                              2001          2000
 .                                                          (Restated)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
<S>                                                       <C>           <C>
Net income (loss)                                         $(1,201,504)  $   899,270
Adjustments to reconcile net income (loss) to net
 cash provided by (used in) operating activities:
  Depreciation                                                196,036       232,265
  Write-down of equipment                                     125,000             -
  Gain on sale of equipment                                         -      (793,102)
  Sales-type lease revenue                                    (10,053)            -
  Write-down of impaired loan and interest receivable         909,272             -
Changes in assets and liabilities:
  Rents receivable                                            100,339       (18,790)
  Accounts receivable - affiliate                             (38,240)       (9,696)
  Accounts receivable - other                                 (49,015)
  Other assets                                                  5,070        31,742
  Interest receivable - loan                                 (144,686)     (303,314)
  Collections on net investment in sales-type lease           176,984             -
  Accrued interest                                               (897)       (5,631)
  Accrued liabilities                                          17,394        (3,996)
  Accrued liabilities - affiliate                              14,513       (56,913)
  Deferred rental income                                      (27,244)      (24,136)
                                                          ------------  ------------
    Net cash provided by (used in) operating activities       121,984      (101,316)
                                                          ------------  ------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Proceeds from equipment sales                                       -     1,005,645
Loan receivable                                                     -    (3,640,000)
                                                          ------------  ------------
    Net cash used in investing activities                           -    (2,634,355)
                                                          ------------  ------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable                                   505,028       201,247
Principal payments - notes payable                           (320,215)     (202,437)
                                                          ------------  ------------
    Net cash provided by (used in) financing activities       184,813        (1,190)
                                                          ------------  ------------

Net increase (decrease) in cash and cash equivalents          306,797    (2,736,861)
Cash and cash equivalents at beginning of period            2,827,385     5,719,642
                                                          ------------  ------------
Cash and cash equivalents at end of period                $ 3,134,182   $ 2,982,781
                                                          ============  ============

SUPPLEMENTAL INFORMATION
Cash paid during the period for interest                  $    71,605   $    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.

<PAGE>
                                     ------

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                        NOTES TO THE FINANCIAL STATEMENTS


                               SEPTEMBER 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.

Subsequent  to  the  issuance  of the Partnership's financial statements for the
year  ended  December  31,  2000,  the  Partnership  determined  that  the  loan
receivable  from  Echelon  Residential  Holdings  LLC  ("Echelon  Residential
Holdings")  should  be  accounted  for  consistent  with  its legal form and the
Partnership  should  recognize  the  interest  income,  as  calculated  per  the
contractual  terms  of the loan agreement to the extent such interest income was
evaluated  as likely to be collected.  Accordingly, the Partnership reversed the
proportionate  share  of  losses  in  Echelon  Residential Holdings for the nine
months  ended  September  30, 2000 of $82,350 previously recorded and recognized
interest  income of $303,314, resulting in an increase in the net income for the
nine  months  ended  September  30,  2000  of  $385,664,  or  $.13  per  limited
partnership  unit.  As  a  result, the accompanying financial statements for the
three  and nine months ended September 30, 2000 and as of December 31, 2000 have
been  restated  from  the  amounts  previously  reported.

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


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

At  September  30,  2001,  AIRFUND  II  International  Limited  Partnership (the
"Partnership")  had  $3,100,140  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
regarding  the  Class Action Lawsuit.  Future minimum rents for operating leases
of  $1,083,908  are  due  as  follows:
<TABLE>
<CAPTION>

<S>                                <C>    <C>
For the year ending September 30,   2002  $  412,079
                                    2003     402,247
                                    2004     269,582
                                          ----------

 .                                  Total  $1,083,908
                                          ==========
</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 $78,422 are due through the date of the lease expiration in
January  2002.


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

The  following  is  a summary of equipment owned by the Partnership at September
30,  2001.  Remaining  Lease Term (Months), as used below, represents the number
of  months  remaining  from  September 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>
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                                  .    4,797,114
     Accumulated depreciation                              .   (2,473,981)
                                                              ------------
     Equipment, net of accumulated depreciation            .  $ 2,323,133
                                                              ============
</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 $1,136,000 at September 30,
2001.

At  September  30, 2001, a McDonnell Douglas MD-82 aircraft previously leased to
Finnair  OY  was  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
$1,011,000  at  September  30,  2001.

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.


NOTE  5  -  LOAN  RECEIVABLE
----------------------------

On March 8, 2000, the Partnership and 10 affiliated partnerships (the ''Exchange
Partnerships'') collectively loaned $32 million to 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 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.  Echelon Residential
Holdings  has no material business interests other than those connected with the
real  estate  properties  owned  by  Echelon  Residential  LLC.
The  summarized financial information for Echelon Residential Holdings as of and
for  the periods ended September 30, 2001 and 2000, respectively, is as follows:
                                                  (Unaudited)
                                  As  of  and  for  the  periods  ended
                                                 September 30,
<TABLE>
<CAPTION>

                                            2001           2000
                                        -------------  ------------
<S>                                     <C>            <C>
Total assets                            $ 81,508,282   $63,457,759
Total liabilities                       $ 89,882,493   $61,693,359
Minority interest                       $  1,688,330   $ 2,527,750
Total deficit                           $(10,062,541)  $  (763,350)

Total revenues                          $  9,371,321   $ 1,565,618
Total expenses, minority interest
  and equity in loss of unconsolidated
  joint venture                         $ 15,574,223   $ 5,109,324
Net loss                                $ (6,202,902)  $(3,543,706)
</TABLE>


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  has ceased accruing
interest  on  its  loan  receivable from Echelon Residential Holdings, effective
April  1,  2001.  The  total impairment of $909,272 is recorded as write-down of
impaired  loan  and  interest  receivable  in  the  accompanying  Statement  of
Operations  for  the  nine  months  ended  September  30,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.

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 nine month periods ended September
30,  2001,  the  Partnership  recognized  sales-type lease revenue of $3,351 and
$10,053, respectively, from this lease. At September 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  $78,422
Less: Unearned income                          5,023
                                             -------

  Total                                      $73,399
                                             =======
</TABLE>


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


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 nine month periods ended September 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        $ 25,892  $ 18,223
Administrative charges             41,895    39,178
Reimbursable operating expenses
   due to third parties           561,223   648,204
                                 --------  --------

          Total                  $629,010  $705,605
                                 ========  ========
</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  September  30, 2001, the Partnership was owed $71,692 by EFG for such funds.
These  funds  were  remitted  to  the  Partnership  in  October  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 September 30, 2001 in the
amount  of  $1,091,682.  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  September 30, 2001 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 September 30,   2002  $  218,253
                                    2003     235,548
                                    2004     637,881
                                          ----------

  .                                Total  $1,091,682
                                          ==========
</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.

On  May  15,  2001,  Defendants' Counsel filed with the court Defendants' Status
Report  pursuant to the court's March 12, 2001 Order.  Defendants reported that,
notwithstanding  the  parties'  best  efforts,  the  staff  of  the  SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the  proposed settlement. In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

The Defendants also referred to the SEC staff's letter of May 10, 2001 asserting
that  certain  of  the partnerships are investment companies and to special 1940
Act  counsel's  submissions  to  the SEC staff setting forth the reasons why the
1940  Act does not apply to the Designated Partnerships, noting that counsel had
informed  the  staff  of  the Division of Investment Management that, based upon
counsel's  understanding  of the surrounding circumstances and after an in-depth
analysis  of  the applicable law, if asked, counsel would be willing to issue an
opinion of the firm that none of the partnerships is an investment company under
the  1940  Act.  The Defendants stated their belief that the proposed settlement
is still viable and in the best interests of the parties and that final approval
should  be  pursued.  The Defendants advised the court that they believe that if
the  court  were  to address the issue of whether or not the 1940 Act applies to
the  partnerships  and  the  proposed  consolidation,  it could remove the major
obstacle  to  the  settlement  being  finally  consummated.  The Defendants also
requested  that  the  court schedule a hearing to address on a preliminary basis
the  objection  to  the  proposed  settlement raised in the staff's May 10, 2001
letter.

Plaintiffs'  Counsel  also submitted a Plaintiffs' Status Report to the court on
May  15,  2001 in which they reported that the SEC review has not been concluded
and  that  they notified the Defendants that they would not agree to continue to
stay  the  further  prosecution of the litigation in favor of the settlement and
that they intend to seek court approval to immediately resume active prosecution
of  the claims of the Plaintiffs.  Plaintiffs' Counsel stated in the Report that
the  "[p]laintiffs  continue  to  believe  that  the  settlement  is in the best
interests  of  the  Operating Partnership Sub-class.  However, since the SEC has
yet  to complete its review of the proxy, the Plaintiffs do not believe that the
litigation  should  continue  to  be  stayed  so  that  the SEC may continue its
regulatory  review  for  an  indefinite period of time."  Plaintiffs requested a
pre-trial  conference  to  schedule  filing  of  Plaintiffs'  motion  for  class
certification  on  or before May 29, 2001 and resumption of merits discovery and
discovery  related  to  the  class  certification motion.  Subsequently, after a
status  conference  on  May  31, 2001, the court issued an order on June 4, 2001
setting  a  trial  date  of  March  4,  2002, referred the case to mediation and
referred  discovery  to  a  magistrate  judge.  The  Defendant's and Plaintiff's
Counsel  have  continued  to  negotiate  toward  a  settlement  and have reached
agreement  as  to  its principal business terms.  As part of the settlement, EFG
has  agreed  to  buy  the  loans  made  by  the Exchange 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.
Upon  completion  of  a  stipulation  of settlement, the parties will submit the
settlement  to  the  court  for  approval.

There  can  be  no  assurance  that  a settlement of the sub-class involving the
Exchange  Partnerships  will  receive  final  Court  approval  and  be effected.
However,  in  the  absence  of  a  final  settlement  approved by the Court, the
Defendants  intend to defend vigorously against the claims asserted in the Class
Action Lawsuit.  Neither the General Partner nor its affiliates can predict with
any  degree of certainty the cost of continuing litigation to the Partnership or
the  ultimate  outcome.

<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.   The General Partner is engaged in discussions with the staff of the
Securities  and  Exchange  Commission  ("SEC")  regarding  whether  or  not  the
Partnership  may  be  an  inadvertent investment company as a consequence of the
above-referenced  loan. 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.  The General Partner has
consulted  counsel  and  believes  that  it  is  not an investment company.  The
General  Partner  has  determined  to  take  action to resolve the Partnership's
status  under  the  1940  Act  by  means that may include 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.

On  May  15,  2001,  Defendants' Counsel filed with the court Defendants' Status
Report  pursuant to the court's March 12, 2001 Order.  Defendants reported that,
notwithstanding  the  parties'  best  efforts,  the  staff  of  the  SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the  proposed settlement. In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

The Defendants also referred to the SEC staff's letter of May 10, 2001 asserting
that  certain  of  the partnerships are investment companies and to special 1940
Act  counsel's  submissions  to  the SEC staff setting forth the reasons why the
1940  Act does not apply to the Designated Partnerships, noting that counsel had
informed  the  staff  of  the Division of Investment Management that, based upon
counsel's  understanding  of the surrounding circumstances and after an in-depth
analysis  of  the applicable law, if asked, counsel would be willing to issue an
opinion of the firm that none of the partnerships is an investment company under
the  1940  Act.  The Defendants stated their belief that the proposed settlement
is still viable and in the best interests of the parties and that final approval
should  be  pursued.  The Defendants advised the court that they believe that if
the  court  were  to address the issue of whether or not the 1940 Act applies to
the  partnerships  and  the  proposed  consolidation,  it could remove the major
obstacle  to  the  settlement  being  finally  consummated.  The Defendants also
requested  that  the  court schedule a hearing to address on a preliminary basis
the  objection  to  the  proposed  settlement raised in the staff's May 10, 2001
letter.

Plaintiffs'  Counsel  also submitted a Plaintiffs' Status Report to the court on
May  15,  2001 in which they reported that the SEC review has not been concluded
and  that  they notified the Defendants that they would not agree to continue to
stay  the  further  prosecution of the litigation in favor of the settlement and
that they intend to seek court approval to immediately resume active prosecution
of  the claims of the Plaintiffs.  Plaintiffs' Counsel stated in the Report that
the  "[p]laintiffs  continue  to  believe  that  the  settlement  is in the best
interests  of  the  Operating Partnership Sub-class.  However, since the SEC has
yet  to complete its review of the proxy, the Plaintiffs do not believe that the
litigation  should  continue  to  be  stayed  so  that  the SEC may continue its
regulatory  review  for  an  indefinite period of time."  Plaintiffs requested a
pre-trial  conference  to  schedule  filing  of  Plaintiffs'  motion  for  class
certification  on  or before May 29, 2001 and resumption of merits discovery and
discovery  related  to  the  class  certification motion.  Subsequently, after a
status  conference  on  May  31, 2001, the court issued an order on June 4, 2001
setting  a  trial  date  of  March  4,  2002, referred the case to mediation and
referred  discovery  to  a  magistrate  judge.  The  Defendant's and Plaintiff's
Counsel  have  continued  to  negotiate  toward  a  settlement  and have reached
agreement  as  to  its principal business terms.  As part of the settlement, EFG
has  agreed  to  buy  the  loans  made  by  the Exchange 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.
Upon  completion  of  a  stipulation  of settlement, the parties will submit the
settlement  to  the  court  for  approval.

There  can  be  no  assurance  that  a settlement of the sub-class involving the
Exchange  Partnerships  will  receive  final  Court  approval  and  be effected.
However,  in  the  absence  of  a  final  settlement  approved by the Court, the
Defendants  intend to defend vigorously against the claims asserted in the Class
Action Lawsuit.  Neither the General Partner nor its affiliates can predict with
any  degree of certainty the cost of continuing litigation to the Partnership or
the  ultimate  outcome.  See  Note  9 to the financial statements for additional
discussion.


Three  and  nine  months ended September 30, 2001 compared to the three and nine
--------------------------------------------------------------------------------
months  ended  September  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  September  30,  2001,  the  Partnership's  equipment  portfolio  included
proportionate  ownership interests in three aircraft, two of which were on lease
at  that date. 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.

The  events  of September 11, 2001 adversely affected market demand for both new
and  used  commercial  aircraft  and  weakened  the  financial  position of most
airlines.  No  direct  damage  occurred  to any of the Partnership's assets as a
result  of  these  events and while it is currently not possible for the General
Partner  to  determine  the  ultimate  long-term  economic consequences of these
events  to  the  Partnership,  the  General  Partner  expects that the resulting
decline in air travel will suppress market prices for used aircraft in the short
term and could inhibit the viability of the airline industry.  In the event of a
default  by a lessee, the Partnership could suffer material losses. At September
30,  2001,  the  Partnership has collected substantially all rents owed from its
lessees.  The  General  Partner is monitoring the situation and will continue to
evaluate  potential  implications  to  the  Partnership's financial position and
future  liquidity.

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

For  the  three and nine month periods ended September 30, 2001, the Partnership
recognized  operating  lease  revenue  of  $134,540  and $445,648, respectively,
compared  to  $106,446 and $364,468, 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 $83,500
for  the  nine  month  period ended September 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
$220,500  and  $47,883  related  to  this aircraft during the nine month periods
ended  September  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
$141,541  and  $238,390  related  to this aircraft during the nine month periods
ended  September  30,  2001  and  2000,  respectively.

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 nine month period ended September 30, 2001, the Partnership
recognized  sales-type  lease  revenue  of  $3,351  and  $10,053,  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 nine month periods ended September 30, 2001
was  $30,992  and  $243,821,  respectively,  compared  to $188,360 and $458,065,
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 and interest earned on the loan receivable
from  Echelon  Residential  Holdings.  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.

Interest  income  during  the  nine  months  ended  September  30, 2001 included
$144,686  earned  on  the  loan  receivable  from  Echelon Residential Holdings,
compared  to  $137,783 and $303,314, respectively, for the three and nine months
ended September 30, 2000. 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  has ceased accruing
interest  on  its  loan  receivable from Echelon Residential Holdings, effective
April  1,  2001.  The  total impairment of $909,272 is recorded as write-down of
impaired  loan  and  interest  receivable  in  the  accompanying  Statement  of
Operations  for  the  nine  months  ended  September  30,  2001.

Other  income for the nine months ended September 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.

During  the  three  months  ended  September 30, 2001, the Partnership donated 2
fully-depreciated  Rolls-Royce  engines  that  had  been  warehoused  to  two
educational  institutions.  After  attempting  to  remarket the engines for some
time,  the  General  Partner  concluded that the storage costs being incurred to
store  these  engines  was  in  excess  of  any  potential  sales  proceeds.

In  July  2000,  the  Partnership  sold  one of its Boeing 737-2H4 aircraft to a
third-party  for  proceeds  of $255,645, and a net gain, for financial statement
purposes of $43,102 for the Partnership's proportional interest in the aircraft.

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  nine  months  ended  September  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. The
Partnership  classifies  such  residual  rental  payments  as  lease  revenue.
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 nine month period ended September 30, 2001, the Partnership
incurred  interest  expense  of  $21,678  and $70,708, respectively, compared to
$25,399  and  $79,472  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  $4,437 and $25,892, respectively, for the three and nine
month  periods  ended  September  30,  2001  compared  to  $5,322  and  $18,223,
respectively,  for  the  same  periods  in  2000.

Operating  expenses  were  $287,316  and  $603,118  for the three and nine month
periods  ended  September  30,  2001,  respectively,  compared  to  $440,387 and
$687,382  for  the  same periods in 2000. During the nine months ended September
30, 2001, operating expenses included approximately $84,000 related to the Class
Action Lawsuit discussed in Note 9 to the financial statements herein. Operating
expenses  during the nine months ended September 30, 2000 included approximately
$201,000  accrued  for  the  Partnership's  proportionate share of the cost of a
required  D-check  on  a  McDonnell Douglas aircraft currently off lease.  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 $196,036, respectively, for the three and
nine  month  periods  ended September 30, 2001 compared to $72,591 and $232,265,
respectively,  for  the  same  periods  in  2000.  During  the nine months ended
September  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.  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 $121,984 and a net cash outflow of $101,316 for the nine months ended
September  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.  The  loan to Echelon
Residential  Holdings and accrued interest thereon is due in full at maturity on
September  8,  2002.

Cash  realized  for  asset  disposal  transactions  is  reported under investing
activities  on  the  accompanying  Statement of Cash Flows.  For the nine months
ended September 30, 2000, the Partnership realized $1,005,645 in equipment sales
proceeds.  There  were no equipment sales in the nine months ended September 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  September  30,  2001, the Partnership was due aggregate future minimum lease
payments  of  $1,162,330  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 $1,091,682 (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  that  is 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.

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  unrelated  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.

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.

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  has ceased accruing
interest  on  its  loan  receivable from Echelon Residential Holdings, effective
April  1,  2001.  The  total impairment of $909,272 is recorded as write-down of
impaired  loan  and  interest  receivable  in  the  accompanying  Statement  of
Operations  for  the  nine  months  ended  September  30,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.

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.

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  nine  months  ended  September 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  September 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 the 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.

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 component of the cumulative difference between financial statement
income  or  loss  and  tax  income  or  loss results from different depreciation
policies  for  book  and  tax  purposes.

For  financial reporting purposes, the General Partner has accumulated a capital
deficit  at  September  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 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 September 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 nine months ended
September  30,  2001  was  not  material.

The  Partnership's  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, with interest
due  at  maturity.  The  effect of interest rate fluctuations on the Partnership
for  the  nine  months  ended  September  30,  2001  was  not  material.


<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>






<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:     November  14,  2001
          -------------------