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


                            -------------------------

                                    FORM 10-Q

                            -------------------------


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

                  For the quarterly period ended March 31, 2000

                                       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. 333-82153

                            -------------------------


                             AIRCRAFT FINANCE TRUST
                             ----------------------
             (Exact name of registrant as specified in its charter)

                                   51-6512392
                        (IRS Employer Identification No.)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

    1100 North Market Street, Rodney Square North, Wilmington, Delaware 19890
                                 (302) 651-1000
          (Address and telephone number of principal executive offices)




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
                              ---                    ---

                      This document consists of 15 pages.
<PAGE>
                             Aircraft Finance Trust

            FORM 10-Q - For the Quarterly Period Ended March 31, 2000




                                      INDEX



Part I.  Financial Information

                                                                            Page
         Item 1.      Financial Statements

              a)  Consolidated Balance Sheets - March 31, 2000 and
                  December 31, 1999...........................................3

              b)  Consolidated Statement of Income - Three Months Ended
                  March 31, 2000..............................................4

              c)  Consolidated Statement of Cash Flows - Three Months
                  Ended March 31, 2000........................................5

              d)  Consolidated Statement of Changes in
                  Beneficial Interest Holders' Equity - Year Ended
                  December 31, 1999 and Three Months Ended March 31, 2000.....6

              e)  Notes to Consolidated Financial Statements..................7

         Item 2.      Management's Discussion and Analysis of
                      Financial Condition and Results of Operations...........8

         Item 3.      Quantitative and Qualitative Disclosures about Market
                      Risk...................................................11


Part II. Other Information

         Item 6.      Exhibits and Reports on Form 8-K.......................13

         Signatures   .......................................................14


                                       2
<PAGE>

                          Part I. Financial Information
                          -----------------------------

Item 1.       Financial Statements


                     Aircraft Finance Trust and Subsidiaries

                           Consolidated Balance Sheets

                             (dollars in thousands)

                                                         March 31,  December 31,
                                                            2000        1999
                                                         ---------  ------------
                                                        (unaudited)
                                     Assets

Cash and cash equivalents                               $   74,604   $   72,682
Restricted cash                                             18,275       19,468
Rents and other receivables                                  3,582        4,122
Aircraft, net                                            1,160,319    1,170,564
Other assets                                                    35          138
                                                        ----------   ----------

     Total assets                                       $1,256,815   $1,266,974
                                                        ==========   ==========

               Liabilities and Beneficial Interest Holders' Equity

Accounts payable and accrued liabilities                $    4,085   $    5,819
Deferred rental income                                       5,436        7,031
Security and other deposits                                 31,182       30,385
Notes payable:
     Class A-1                                             512,500      512,500
     Class A-2                                             360,393      368,897
     Class B                                               124,794      124,798
     Class C                                               106,000      106,000
     Class D                                                64,000       64,000
                                                        ----------   ----------
     Total notes payable                                 1,167,687    1,176,195
                                                        ----------   ----------

     Total liabilities                                   1,208,390    1,219,430
                                                        ----------   ----------

Beneficial interest holders' equity                         48,425       47,544
                                                        ----------   ----------

     Total liabilities and beneficial interest
       holders' equity                                  $1,256,815   $1,266,974
                                                        ==========   ==========

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

                                       3
<PAGE>

                     Aircraft Finance Trust and Subsidiaries

                        Consolidated Statement of Income

                             (dollars in thousands)


                                                                   Three Months
                                                                      Ended
                                                                  March 31, 2000
                                                                  --------------
                                                                    (unaudited)
Revenues:
   Rental and other income from operating leases                      $35,703
   Interest income                                                      1,212
                                                                      -------

      Total revenues                                                   36,915
                                                                      -------

Expenses:
   Interest expense                                                    19,467
   Depreciation expense                                                10,678
   Operating expense                                                    4,358
   Administration and other                                             1,531
                                                                      -------

      Total expenses                                                   36,034
                                                                      -------

Net Income                                                            $   881
                                                                      =======

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

                                       4
<PAGE>

                     Aircraft Finance Trust and Subsidiaries

                      Consolidated Statement of Cash Flows

                             (dollars in thousands)

                                                                   Three Months
                                                                       Ended
                                                                  March 31, 2000
                                                                  --------------
                                                                    (unaudited)
Cash Flows from Operating Activities:
Net income                                                           $    881
Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation expense                                              10,678
Changes in assets and liabilities:
     Rents and other receivables                                          540
     Restricted cash                                                    1,193
     Other assets                                                         103
     Accounts payable and accrued liabilities                          (1,734)
     Deferred rental income                                            (1,595)
     Security and other deposits                                          797
                                                                     --------

     Net cash provided by operating activities                         10,863
                                                                     --------

Cash Flows from Investing Activities:
Aircraft improvements                                                    (433)
                                                                     --------

     Net cash used in investing activities                               (433)
                                                                     --------

Cash Flows from Financing Activities:
Repayment of notes payable                                             (8,508)
                                                                     --------

     Net cash used in financing activities                             (8,508)
                                                                     --------

Net Increase in Cash and Cash Equivalents                               1,922

Cash and Cash Equivalents at Beginning of Period                       72,682
                                                                     --------

Cash and Cash Equivalents at End of Period                           $ 74,604
                                                                     ========


Supplemental Cash Flow Information:
     Cash paid for interest expense                                  $ 19,528
                                                                     ========

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

                                       5
<PAGE>

                     Aircraft Finance Trust and Subsidiaries

    Consolidated Statement of Changes in Beneficial Interest Holders' Equity

                             (dollars in thousands)


                                                                     Beneficial
                                                                      Interest
                                                                      --------
                                                                     (unaudited)

Issuance of Beneficial Interest (May 5, 1999)                          $39,087

   Net income                                                            8,457
                                                                       -------

Balance at December 31, 1999                                            47,544

   Net income                                                              881
                                                                       -------

Balance at March 31, 2000                                              $48,425
                                                                       =======

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


                                       6
<PAGE>

                     Aircraft Finance Trust and Subsidiaries

                   Notes to Consolidated Financial Statements
                                   (unaudited)

                                 March 31, 2000


Note 1 - Organization

         Aircraft Finance Trust is a  special-purpose  statutory  business trust
that was formed on April 13, 1999 under the laws of Delaware.  Aircraft  Finance
Trust and its two subsidiaries  (collectively "Aircraft Finance") were formed to
conduct certain limited activities,  including buying, owning, leasing,  selling
commercial jet aircraft and related activities.

         On May 5, 1999, Aircraft Finance completed a securitization transaction
in which it  received  proceeds  from a  private  placement  offering  of notes,
received  proceeds from the issuance of  beneficial  interest  certificates  and
simultaneously paid for the acquisition of 36 commercial jet aircraft.


Note 2 - Basis of Presentation

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance  with generally  accepted  accounting  principles and the
rules and  regulations  of the  Securities  and Exchange  Commission for interim
financial statements.  Accordingly,  these interim statements do not include all
of the information and disclosures required for annual financial statements.  In
the opinion of management,  all adjustments (consisting solely of adjustments of
a normal  recurring  nature)  necessary  for a fair  statement of these  interim
results have been included. All intercompany accounts and transactions have been
eliminated.  The results for the interim periods are not necessarily  indicative
of the results to be expected for the entire year.

         These interim  unaudited  consolidated  financial  statements should be
read in conjunction with Aircraft Finance's  consolidated  financial  statements
and  accompanying  notes included in the Annual Report on Form 10-K for the year
ended December 31, 1999 filed with the Securities and Exchange Commission.

Use of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  While  management  believes  that the  estimates and related
assumptions used in the preparation of the consolidated financial statements are
appropriate,  actual  results  could  differ from those  estimates.  Significant
estimates  are made in the  assessment  of the  collectibility  of  receivables,
depreciable  lives and estimated salvage values of leased aircraft and estimates
of expected  maintenance and overhaul costs in connection with certain leases of
aircraft.


                                       7
<PAGE>

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

         On May 5, 1999,  Aircraft Finance issued $1,209 million of Asset Backed
Notes (the  "Initial  Notes").  The Initial  Notes were issued in five  classes;
Class A-1,  Class  A-2,  Class B,  Class C and Class D. The  Initial  Notes were
issued  simultaneously  with the  execution of an agreement  for the sale of the
beneficial  interest of Aircraft  Finance  for $39 million and an  agreement  to
acquire 36 commercial jet aircraft for $1,196 million.  On January 20, 2000 four
classes of the Initial Notes were  exchanged for four  corresponding  classes of
new notes (the "Exchange  Notes"),  as more fully discussed below. The remaining
outstanding  Initial  Notes and the  outstanding  Exchange  Notes  are  together
referred to as the Notes.

         Aircraft  Finance  is a special  purpose  entity  which  owns  aircraft
subject to operating leases.  Aircraft  Finance's  business consists of aircraft
leasing  activities.  Aircraft  Finance  may  also  engage  in  acquisitions  of
additional  aircraft  and sales of  aircraft.  Any  acquisitions  of  additional
aircraft and the related issuance of additional notes will require  confirmation
by the rating  agencies  that they will not lower,  qualify  or  withdraw  their
ratings on the outstanding Notes as a result. Aircraft Finance's cash flows from
such  activities  will be used to service  the  interest  and  principal  on the
outstanding  Notes and to make  distribution of remaining amounts to the holders
of the beneficial interest certificates,  after the payment of expenses incurred
by Aircraft Finance.

         Aircraft  Finance's  ability  to  generate  sufficient  cash  from  its
aircraft  assets to service the outstanding  Notes will depend  primarily on the
rental rates it can achieve on leases, the lessees' ability to perform according
to the terms of the leases and the prices it can achieve on any aircraft  sales.
Aircraft  Finance's ability to service the outstanding Notes will also depend on
the  level of  Aircraft  Finance's  operating  expenses,  including  maintenance
obligations  that  are  expected  to  increase  as the  aircraft  age,  and  any
unforeseen  contingent  liabilities.  The indenture governing the Notes requires
that  Aircraft  Finance  maintain  a  cash  reserve  balance  on  deposit  in  a
collections account and permits Aircraft Finance to establish a credit facility,
in order to provide a source of liquidity for Aircraft Finance's obligations.

         Any statements  contained herein that are not historical facts, or that
might be considered an opinion or projection,  whether expressed or implied, are
meant as, and should be considered,  forward-looking  statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on assumptions  and opinions  concerning a variety of known
and  unknown  risks.  If  any  assumptions  or  opinions  prove  incorrect,  any
forward-looking  statements  made  on  that  basis  may  also  prove  materially
incorrect.

Recent Developments

         On January 20,  2000,  Aircraft  Finance  completed  an exchange  offer
whereby  Aircraft  Finance issued four classes of new notes, the Exchange Notes,
designated  Class A-1,  A-2,  B and C, in  exchange  for the four  corresponding
classes of the Initial  Notes.  The terms of the Exchange Notes are identical in
all material  respects to the Initial Notes,  except that the Exchange Notes are
registered under the Securities Act of 1933, as amended.  The Class D Notes were
not  exchanged and remain  unchanged.  $3 million of the Class A-2 Initial Notes
were not tendered in the exchange offer and remain outstanding.

         Under the terms of the  indenture,  Aircraft  Finance  is  required  to
obtain annual  appraisals of its aircraft.  In February 2000,  Aircraft  Finance
received  appraisals  of the adjusted base values of the aircraft as of December

                                       8
<PAGE>

31, 1999 from three independent appraisers that are members of the International
Society of  Transport  Aircraft  Trading,  as  required  by the  indenture.  The
aggregate of the average of the three  appraisals (the current  appraised value)
of the aircraft at December 31, 1999 was $1,256.1  million.  The  appraisals  at
December  31,  1999  did  not  indicate  a  decline  in  value  of the  aircraft
sufficiently  in  excess  of the value  decline  assumed  under the terms of the
indenture to require excess cash flows to be redirected to the Class A Notes.

         In February  2000,  the B737-300  aircraft  formerly  leased to a Dutch
lessee was delivered for lease to a lessee based in the  Philippines for a lease
term of 57 months at a lower  rental rate than the former  lease.  The  aircraft
with  respect to this  lessee  represents  approximately  2.6% of the  aggregate
appraised value at December 31, 1999.

         In March 2000, Aircraft Finance entered into a restructuring  agreement
with Canadian  Airlines,  a lessee of two Airbus  A320-200  aircraft.  Under the
restructuring  agreement,  Canadian  Airlines,  a subsidiary of Air Canada,  was
replaced  by Air  Canada  Capital  LTD as  the  new  lessee.  These  leases  are
guaranteed  by Air Canada.  Pursuant to this  restructuring,  the cash  security
deposits of $1.5  million  held by  Aircraft  Finance in  connection  with these
aircraft  were  returned to Canadian  Airlines.  As of March 31, 2000,  all rent
amounts due under these leases had been paid.  The two aircraft  with respect to
this lessee represent approximately 4.5% of the aggregate appraised value of the
aircraft at December 31, 1999.

         In April 2000,  Aircraft  Finance  entered into an  agreement,  for one
MD-83 aircraft  currently  leased to an Italian  lessee,  to extend the lease to
November  2001 at a lower rental rate.  The aircraft with respect to this lessee
represents  approximately 1.9% of the aggregate  appraised value at December 31,
1999.

         The B767-300ER aircraft currently on lease with a Swedish lessee, has a
lease expiration date in May 2000. Aircraft Finance has entered into a letter of
intent to lease this aircraft to a Canadian lessee for a lease term of 36 months
with an anticipated delivery date in May 2000.

         At March 31,  2000  there  were two  existing  lessees  on  non-accrual
status.  The total amount of rental  payments and maintenance  reserve  payments
outstanding  under the leases  for the three  aircraft  from these two  existing
lessees  amounted to  approximately  $5.7 million as of March 31,  2000.  One of
these  two  lessees,  based in  Brazil,  owed  approximately  $1.6  million  for
outstanding rental payments and maintenance  reserve payments at March 31, 2000.
Aircraft  Finance  holds  security   deposits  of  $0.9  million  against  these
arrearages.  The aircraft with respect to this lessee  represents  approximately
2.7% of the aggregate  appraised  value at December 31, 1999.  The other lessee,
based in Turkey, owed approximately $4.1 million for outstanding rental payments
and  maintenance  reserve  payments at March 31, 2000.  Aircraft  Finance  holds
security deposits and letters of credit in the aggregate of $1.1 million against
these  arrearages.  The two  aircraft  with  respect to this  lessee  represents
approximately  5.2% of the  aggregate  appraised  value at December 31, 1999. In
April 2000,  the Turkish  lessee  returned one of the two aircraft  early.  This
aircraft was re-delivered to a new lessee (based in Belgium) in April 2000 for a
lease term of 36 months at a lower rental rate.

         In May 2000, the B737-300  aircraft  leased to TransBrasil was returned
early. The aircraft is currently being remarketed for lease. Aircraft Finance is
in the process of  quantifying  and  evaluating  the likelihood of and amount of
collections  with  respect  to  its  claim  for  outstanding  rent,  maintenance

                                       9
<PAGE>

reserves,  accrued interest and re-delivery  costs. The aircraft with respect to
this lessee represents  approximately  2.7% of the aggregate  appraised value at
December 31, 1999.

Results of Operations

         Aircraft  Finance  reported net income of $0.9 million during the three
months  ended  March 31,  2000,  on total  revenues of $36.9  million.  Aircraft
Finance's revenues consisted of rental income from operating leases and interest
income earned on cash balances.

         Rental  income from  aircraft  subject to operating  leases  during the
three  months  ended March 31, 2000 was $35.7  million.  The defaults of the two
leases based in Brazil and Turkey  negatively  impacted  rental and other income
from  operating  leases by  approximately  $2.0 million  during the three months
ended March 31,  2000.  Rental  income from  operating  leases  during the three
months ended March 31, 2000 includes supplemental rental income of $4.1 million.
Supplemental  rental  payments  are variable  based on aircraft  flight hours or
cycles.

         Interest  income  during the three months ended March 31, 2000 was $1.2
million. Interest income is earned on Aircraft Finance's cash balances which are
invested in short-term highly liquid  investments as permitted by the indenture.
The amount of interest  income  earned  varies  based upon the current  interest
rates paid on such  investments  and the level of cash balances held by Aircraft
Finance.

         Interest  expense,  net of interest rate swap proceeds of $1.0 million,
was $19.5 million during the three months ended March 31, 2000. Interest expense
is paid on  Aircraft  Finance's  outstanding  Notes  issued on May 5, 1999.  The
weighted  average interest rate on the Notes during the three months ended March
2000 was 6.59% and the  outstanding  balance of the Notes at March 31,  2000 was
$1,167.7 million.  Interest expense varies based on the actual interest rates on
the  floating  rate Notes,  the  interest  rate swap costs or  proceeds  and the
outstanding principal balances of the Notes.

         Depreciation  expense  during the three months ended March 31, 2000 was
$10.7 million.

         Operating expense during the three months ended March 31, 2000 was $4.4
million.  Operating expense consists primarily of aircraft  maintenance  expense
and lease related costs. Most of Aircraft  Finance's lease contracts require the
lessee to bear the  obligation for  maintenance  costs on airframes and engines,
and require the lessee to make  certain  payments to the lessor,  calculated  on
measures of usage to cover the expected costs of scheduled  maintenance charges,
including  major  airframe  and engine  overhauls.  Reserves are  maintained  at
amounts  considered  adequate to cover those expected  payments for  maintenance
costs.

         Administrative  and other expenses  during the three months ended March
31, 2000 were $1.5 million. These expenses consist primarily of fees paid to the
service  providers  and  other  general  and  administrative   costs.  The  most
significant  of these fees was the servicer fee, which amounted to $1.1 million.
A  significant  portion of the fees paid to the  Servicer  correspond  to rental
payments  due and  received.  These  fees are based upon a fixed  percentage  of
rental receipts, and will vary with rental income of Aircraft Finance.

Liquidity

         Aircraft Finance held cash and cash  equivalents of $74.6 million,  and
restricted  cash of $18.3  million  at March 31,  2000.  The  liquidity  reserve
amount, which is included in cash and cash equivalents, was $52 million at March
31,  2000.  The  liquidity  reserve  amount is  required  under the terms of the
indenture  and is  intended  to serve  as a source  of  liquidity  for  Aircraft
Finance's maintenance obligations and other contingent costs.

                                       10
<PAGE>


Cash Flows from Operating Activities

         Aircraft Finance's cash flows from operating  activities depend on many
factors  including,  but not limited to, the performance of lessees and Aircraft
Finance's ability to re-lease aircraft, the average interest rates of the Notes,
the  efficiency of its interest rate hedging  policies,  the ability of interest
rate swap  providers  to  perform  under the  terms of the swap  agreements  and
whether Aircraft Finance will be able to refinance  certain  subclasses of Notes
that have not been repaid with lease cash flows.

         Net cash  provided by operating  activities  for the three months ended
March  31,  2000  amounted  to  $10.9  million,  primarily  reflecting  non-cash
depreciation expense of $10.7 million, net income of $0.9 million, a decrease in
restricted  cash of $1.2 million and an increase in security and other  deposits
of $0.8 million.  These were offset by decreases in accounts payable and accrued
liabilities of $1.7 million and deferred rental income of $1.6 million.

Cash Flows from Investing and Financing Activities

         Net cash used in investing  activities for the three months ended March
31, 2000  amounted to $0.4 million for  capitalized  aircraft  improvements  and
aircraft delivery costs.

         Net cash used in financing  activities for the three months ended March
31, 2000 amounted to $8.5 million due to principal  repayment on the Notes. As a
result,  the balance of these  Notes were  $1,167.7  million at March 31,  2000.
Generally,  principal  and interest is repaid on these Notes  monthly based upon
the cash  collected,  the  anticipated  expenses and the cash  balances  held by
Aircraft  Finance  on the  calculation  date.  As a  result,  monthly  principal
payments on the Notes will vary  depending  on Aircraft  Finance's  revenues and
expenses for the month.

         At March 31, 2000,  Aircraft  Finance was a party to five interest rate
swap  agreements.  The net  aggregate  amounts  due to be paid  or  received  by
Aircraft Finance under these agreements is determined  monthly and is due on the
same day as the  payments  under the  Notes.  The net  economic  effect of these
interest  rate swaps was to hedge  Aircraft  Finance's  variable  interest  rate
exposure from  movements in interest rates over the duration of the lease terms.
Please see "Item 3. Quantitative and Qualitative  Disclosures about Market Risk"
for further information about these interest rate swap agreements.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

         Interest  incurred  by  Aircraft  Finance  on the Notes and the  rental
income  received  by  Aircraft  Finance  under  operating  leases  are  based on
combinations of variable and fixed measures of interest rates.  Aircraft Finance
is exposed to  interest  rate risk to the extent  that the mix of  variable  and
fixed  interest  obligations  under  the  Notes do not  correlate  to the mix of
variable and fixed rents under operating  leases.  Aircraft  Finance has engaged
advisors  to  monitor  interest  rates in  order to  mitigate  its  exposure  to
unfavorable variations. Aircraft Finance utilizes interest rate swaps that shift
the risk of fluctuations  in floating rates to the  counterparty in exchange for
fixed payments by Aircraft Finance.  Risks in the use of these instruments arise
from the  possible  inability of the  counterparties  to meet the terms of their
contracts and from market movements in securities values and interest rates.

         The controlling  trustees of Aircraft  Finance,  with the assistance of
Bankers Trust Company and Lehman  Brothers Inc., are  responsible  for reviewing
and approving  the overall  interest rate  management  policies and  transaction
authority  limits.  Counterparty  risk will be  monitored  on an ongoing  basis.
Counterparties  will  be  subject  to the  prior  approval  of  the  controlling
trustees.  Currently,  Aircraft Finance's counterparty is an affiliate of Lehman
Brothers Inc. Future  counterparties will consist primarily of the affiliates of

                                       11
<PAGE>

major   United   States   and   European   financial   institutions,   including
special-purpose  derivative vehicles,  that have credit ratings, or that provide
collateralization  arrangements,  consistent with maintaining the ratings of the
Notes.

         Aircraft  Finance is a party to five  classes of Notes.  The  estimated
fair value of these Notes at March 31, 2000 was approximately  $1,149.5 million.
The terms of each class of the Notes, including the outstanding principal amount
at March 31, 2000, are as follows:

              Outstanding
Class of       Principal                      Expected Final         Final
 Notes          Amount     Interest Rate       Payment Date      Maturity Date
 -----          ------     -------------       ------------      -------------
Class A-1  $  512,500,000   LIBOR + 0.48%      May 15, 2004      May 15, 2024
Class A-2     360,393,238   LIBOR + 0.50%     June 15, 2008      May 15, 2024
Class B       124,793,872   LIBOR + 1.15%      May 15, 2016      May 15, 2024
Class C       106,000,000           8.00%     July 15, 2016      May 15, 2024
Class D        64,000,000          11.00%   August 15, 2016      May 15, 2024
            -------------
           $1,167,687,110

         Aircraft  Finance was a party to five interest rate swap  agreements at
March 31, 2000. Under the agreements,  Aircraft Finance will pay a fixed rate of
interest  on  the  notional  amount  to  the  counterparty  and,  in  turn,  the
counterparty will pay Aircraft Finance a rate of interest on the notional amount
based on LIBOR.

         The  following  table  presents,  as of March  31,  2000,  the terms of
Aircraft Finance's interest rate swap agreements:

     Fixed       Rate to be      Rate to be
   Notional   paid by Aircraft   received by        Maturity           Estimated
    Amount         Finance     Aircraft Finance       Date            fair value
    ------         -------         -------            ----            ----------
$ 80,000,000        5.23%           LIBOR           April 15, 2000   $    40,655
  60,000,000        5.50%           LIBOR         January 15, 2002     1,534,799
 175,000,000        5.56%           LIBOR         October 15, 2002     6,170,444
 345,000,000        5.65%           LIBOR         January 15, 2004    16,700,794
 230,000,000        5.71%           LIBOR        November 15, 2004    12,655,501

         Aircraft  Finance  expects to enter into  additional  swaps, or sell at
market values or unwind part or all of its initial swaps and any future swaps on
a periodic basis in its efforts to mitigate its exposure to unfavorable  changes
in interest rates. Any changes in Aircraft Finance's policy regarding its use of
interest rate hedging  products will be subject to periodic review by the rating
agencies.


                                       12
<PAGE>

                           Part II. Other Information
                           --------------------------

Item 6.       Exhibits and Reports of Form 8-K

a.      Exhibits (numbered in accordance with Item 601 of Regulation S-K)

        27.   Financial Data Schedule (in electronic format only)

b.      Reports on Form 8-K

        During the quarterly period ended March 31, 2000, Aircraft Finance filed
        reports on Form 8-K dated January 18, 2000,  February 15, 2000 and March
        15,  2000.  Such  reports  on Form 8-K  included  copies of the  monthly
        reports to holders of the Notes.



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<PAGE>

                                   SIGNATURES



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


                                    AIRCRAFT FINANCE TRUST
                                    by Wilmington Trust Company,
                                    not in its individual capacity but
                                    solely as the Owner Trustee


       May 10, 2000                 By:        /S/CHARISSE L. RODGERS
       ------------                     ----------------------------------------
           Date                     Name:      Charisse L. Rodgers
                                    Title:     Senior Financial Services Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



SIGNATURE                        TITLE                              DATE
---------                        -----                              ----


/S/DAVID H. TREITEL              Independent Controlling Trustee    May 10, 2000
------------------------------                                      ------------
David H. Treitel


/S/RICHARD E. CAVANAGH           Independent Controlling Trustee    May 10, 2000
------------------------------                                      ------------
Richard E. Cavanagh


/S/WAYNE D. LIPPMAN              Equity Trustee and Controlling     May 10, 2000
------------------------------   Trustee                            ------------
Wayne D. Lippman


/S/CHARISSE L. RODGERS           Owner Trustee                      May 10, 2000
------------------------------                                      ------------
Wilmington Trust Company, not
in its individual capacity but
solely as the Owner Trustee


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