FORM 10Q
                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report


                     U.S. 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 July 31, 2003
                                                 -------------

                  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
---------         SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from___________ to ____________


                         Commission File Number 0-21995

                          FIRST AVIATION SERVICES INC.
                          (Exact name of registrant as
                            specified in its charter)


           Delaware                                   06-1419064
   (State or other jurisdiction                    (I.R.S. Employer
  of incorporation or organization)                Identification No.)


             15 Riverside Avenue, Westport, Connecticut, 06880-4214
             ------------------------------------------------------
                    (Address of principal executive offices)

                                 (203) 291-3300
                          (Issuer's telephone number)

        -----------------------------------------------------------------
              (Former name, former address and formal fiscal year,
                         if changed since last report)


Indicate by check mark whether the registrant (1) 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__

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes __ No  X
                                              --


The number of shares outstanding of the registrant's common stock as of
September 8, 2003 is 7,266,980 shares.




                                       1
<PAGE>
<TABLE>
<CAPTION>




                          First Aviation Services Inc.

                                      Index

                         Part I - Financial Information

<S>      <C>                                                                                                     <C>
Item 1.  Financial Statements  (Unaudited):

         Consolidated Condensed Balance Sheets....................................................................3
         Consolidated Condensed Statements of Operations........................................................4-5
         Consolidated Condensed Statements of Cash Flows..........................................................6
         Notes to Consolidated Condensed Financial Statements...................................................7-8

Item 2.  Management's Discussion and Analysis of Financial Condition, Results of Operations,
         Liquidity and Capital Resources, and Contractual Obligations..........................................9-13

Item 3.  Quantitative and Qualitative Disclosures about Market Risks.............................................13

Item 4.  Controls and Procedures.................................................................................13



                           Part II - Other Information

Other Information.............................................................................................13-20
</TABLE>




                                       2
<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


                          First Aviation Services Inc.

                      Consolidated Condensed Balance Sheets
                      (in thousands, except share amounts)

                                                                                July 31,        January 31,
                                                                                  2003             2003
                                                                            --------------    --------------
                                                                              (unaudited)            *
Assets
<S>                                                                             <C>               <C>
Current assets:
      Cash and cash equivalents                                                  $ 27,882          $ 26,013
      Trade receivables, net of allowance for doubtful
         accounts of $1,680 and $1,656, respectively                               12,506            13,454
      Inventory, net of allowance for obsolete and slow moving
         inventory of $997 and $997, respectively                                  19,631            20,617
      Prepaid expenses and other                                                    1,369             1,318
                                                                            --------------    --------------

Total current assets                                                               61,388            61,402

Plant and equipment, net                                                            3,231             3,639
                                                                            --------------    --------------

                                                                                 $ 64,619          $ 65,041
                                                                            ==============    ==============

Liabilities and stockholders' equity
Current liabilities:
      Accounts payable                                                            $ 9,644          $ 10,324
      Accrued compensation and related expenses, and                                2,111             2,073
          other accrued liabilities
      Income taxes payable                                                          1,044             1,009
                                                                            --------------    --------------

Total current liabilities                                                          12,799            13,406

      Revolving line of credit                                                     14,500            14,500
      Minority interest in subsidiary                                               1,041             1,041
                                                                            --------------    --------------

Total liabilities                                                                  28,340            28,947

Stockholders' equity:

      Common stock, $0.01 par value, 25,000,000 shares authorized,                     91                91
          9,135,699 shares issued, respectively
      Additional paid-in capital                                                   38,412            38,445
      Retained earnings                                                             7,444             7,543
      Accumulated other comprehensive income (loss)                                   126               (96)
                                                                            --------------    --------------

                                                                                   46,073            45,983
      Less:  Treasury stock, at cost, 1,868,719 and 1,884,989                      (9,794)           (9,889)
          shares, respectively
                                                                            --------------    --------------

Total stockholders' equity                                                         36,279            36,094
                                                                            --------------    --------------

Total liabilities and stockholders' equity                                       $ 64,619          $ 65,041
                                                                            ==============    ==============

See accompanying notes.

* Balances were derived from the audited balance sheet as of January 31, 2003.
</TABLE>


                                       3
<PAGE>
<TABLE>
<CAPTION>

                          First Aviation Services Inc.

           Consolidated Condensed Statements of Operations (Unaudited)
                      (in thousands, except share amounts)


                                                                                   Three months ended
                                                                                        July 31,
                                                                                 2003              2002
                                                                             --------------    --------------
<S>                                                                                <C>                <C>
Net sales                                                                         $ 25,278          $ 26,165
Cost of sales                                                                       20,471            21,241
                                                                             --------------    --------------

Gross profit                                                                         4,807             4,924
Selling, general and administrative expenses                                         4,323             4,540
Corporate expenses                                                                     748               679
                                                                             --------------    --------------

Loss from operations                                                                  (264)             (295)
Net interest income (expense) and other                                                 (1)               68
Minority interest in subsidiary                                                        (10)              (11)
                                                                             --------------    --------------

Loss before income taxes                                                              (275)             (238)
Benefit for income taxes                                                                55                93
                                                                             --------------    --------------

Net loss                                                                            $ (220)           $ (145)
                                                                             ==============    ==============

Basic net loss per share, and net loss
     per share - assuming dilution:

Basic net loss per share, and net loss
     per share - assuming dilution                                                 $ (0.03)          $ (0.02)
                                                                             ==============    ==============

Weighted average shares outstanding - basic                                      7,261,145         7,219,300
                                                                             ==============    ==============

Weighted average shares outstanding - assuming dilution                          7,261,145         7,219,300
                                                                             ==============    ==============
</TABLE>


See accompanying notes.



                                       4
<PAGE>
<TABLE>
<CAPTION>

                          First Aviation Services Inc.

           Consolidated Condensed Statements of Operations (Unaudited)
                      (in thousands, except share amounts)


                                                                                    Six months ended
                                                                                        July 31,
                                                                                 2003              2002
                                                                             --------------    --------------
<S>                                                                                <C>               <C>
Net sales                                                                         $ 50,883          $ 51,164
Cost of sales                                                                       41,201            41,566
                                                                             --------------    --------------

Gross profit                                                                         9,682             9,598
Selling, general and administrative expenses                                         8,589             8,553
Corporate expenses                                                                   1,238             1,233
                                                                             --------------    --------------

Loss from operations                                                                  (145)             (188)
Net interest income and other                                                           89                99
Minority interest in subsidiary                                                        (21)              (21)
                                                                             --------------    --------------

Loss before income taxes                                                               (77)             (110)
Benefit (provision) for income taxes                                                   (22)               43
                                                                             --------------    --------------

Loss before cumulative effect of accounting change                                     (99)              (67)

Cumulative effect of accounting change, net                                              -            (2,735)
                                                                             --------------    --------------
Net loss                                                                             $ (99)         $ (2,802)
                                                                             ==============    ==============


Basic net loss per share, and net loss
     per share - assuming dilution:

Loss before cumulative effect of accounting change                                 $ (0.01)          $ (0.01)

Cumulative effect of accounting change, net                                              -             (0.38)
                                                                             --------------    --------------

Basic net loss per share, and net loss
     per share - assuming dilution                                                 $ (0.01)          $ (0.39)
                                                                             ==============    ==============

Weighted average shares outstanding - basic                                      7,256,331         7,216,747
                                                                             ==============    ==============

Weighted average shares outstanding - assuming dilution                          7,256,331         7,216,747
                                                                             ==============    ==============
</TABLE>


See accompanying notes.


                                       5
<PAGE>

<TABLE>
<CAPTION>

                          First Aviation Services Inc.

           Consolidated Condensed Statements of Cash Flows (Unaudited)
                                 (in thousands)


                                                                                          Six months ended
                                                                                              July 31,
                                                                                        2003            2002
                                                                                     -----------     -----------
<S>                                                                                      <C>           <C>
Cash flows from operating activities
Net loss                                                                                  $ (99)       $ (2,802)
Adjustments to reconcile net loss to net
     cash from operating activities - non-cash charges:
      Depreciation and amortization                                                         606             670
      Compensation paid through issuance of stock                                            60              38
      Cumulative effect of accounting change, net                                             -           2,735
(Increase) decrease in current assets:
      Trade receivables                                                                   1,051           1,185
      Inventory                                                                           1,090           1,877
      Prepaid and other                                                                     (31)           (535)
Increase (decrease) in current liabilities:
      Accounts payable                                                                     (690)            286
      Accrued compensation and related expenses, and other accrued liabilities              (46)           (835)
      Income taxes payable                                                                  (13)              -
                                                                                     -----------     -----------

Net cash provided by operating activities                                                 1,928           2,619

Cash flows from investing activities
Purchases of plant and equipment                                                           (187)           (536)
                                                                                     -----------     -----------

Net cash used in investing activities                                                      (187)           (536)

Cash flows from financing activities
Net borrowings (repayments) on revolving line of credit                                       -            (300)
Principal payments on capital lease obligations and other                                    (2)           (116)
                                                                                     -----------     -----------

Net cash used in financing activities                                                        (2)           (416)
                                                                                     -----------     -----------

Net increase in cash and cash equivalents                                                 1,739           1,667

Effect of exchange rates on cash                                                            130               -

Cash and cash equivalents at beginning of period                                         26,013          31,113
                                                                                     -----------     -----------

Cash and cash equivalents at end of period                                             $ 27,882        $ 32,780
                                                                                     ===========     ===========

Supplemental cash flow disclosures:
      Interest paid                                                                        $ 14            $ 30
      Income taxes paid                                                                    $ 38            $ 76
</TABLE>


See accompanying notes.


                                       6
<PAGE>






                          First Aviation Services Inc.

        Notes to Consolidated Condensed Financial Statements (Unaudited)
                      (in thousands, except share amounts)

                                  July 31, 2003

1.  Basis of Presentation

First Aviation Services Inc. ("First Aviation") and its subsidiaries, Aerospace
Products International, Inc. ("API"), Aircraft Products International, Ltd. and
API Asia Pacific Inc. (collectively, the "Company"), are headquartered in
Westport, Connecticut. The Company is one of the premier suppliers of products
and services to the aerospace industry worldwide, including aircraft parts and
components supply services, and supply chain management services. The Company
also builds custom hose assemblies, and performs overhaul and repair services
for brakes and starter/generators. Customers of the Company include original
equipment manufacturers, aircraft manufacturers, passenger and cargo airlines,
fleet operators, corporate aircraft operators, flight training schools, fixed
base operators, certified repair facilities, governments and military services.
The accompanying unaudited consolidated condensed financial statements of the
Company have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information, and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required for complete financial
statements. In the opinion of management, all material adjustments, including
the elimination of intercompany balances and transactions, and normal recurring
accruals considered necessary for a fair presentation, have been included in the
accompanying unaudited consolidated condensed financial statements. Operating
results for the three and six months ended July 31, 2003, are not necessarily
indicative of the results that may be expected for the full fiscal year ending
January 31, 2004. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Form 10-K for the
year ended January 31, 2003. Certain amounts in the consolidated condensed
financial statements have been reclassified to conform to the current year's
presentation.


2.  Extension of Revolving Line of Credit

Effective July 31, 2003, API extended the maturity of its $20 million Commercial
Revolving Loan and Security Agreement to July 1, 2005, from July 1, 2004. The
extension of the agreement was on substantially the same terms and conditions as
the prior agreement. As a result of this extension, borrowings under this
facility continue to be classified as long term.


3.  Stock Options Issued to Employees

The Company  generally  grants stock  options to its  employees for a fixed
number of shares  with an exercise  price equal to the fair market  value of the
stock on the date of grant. As permitted under Statement of Financial Accounting
Standard No. ("FAS") 123, "Accounting for Stock-Based Compensation", the Company
has elected to follow  Accounting  Principles Board Opinion No. 25,  "Accounting
for Stock Issued to Employees",  and related  interpretations  in accounting for
stock awards to employees.  As a result, no compensation  expense was recognized
during the three and six months ending July 31, 2003, and 2002, since all grants
were issued at the fair market value of the  Company's  common stock at the date
of grant.

The Company is required to disclose the fair value, as defined,  of options
granted to employees and the related  compensation  expense that would have been
recorded  if the Company  accounted  for stock  options at fair value.  The fair
value of the stock  options  granted was  estimated at the date of grant using a
Black-Scholes  option-pricing model. The Black-Scholes  option-pricing model was
developed  for use in estimating  the fair value of traded  options that have no
vesting restrictions and are fully transferable.  In addition,  option valuation
models  require  the  input of  highly  subjective  assumptions,  including  the
expected stock price volatility.  In management's opinion, because the Company's
employee  stock  options  are not  publicly  traded,  and  have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate,  the
existing models do not necessarily provide a reliable single measure of the fair
value of its employee stock options.


                                       7
<PAGE>

The fair value of each option issued was estimated at the date of grant using
the following assumptions (all options were issued during the three months ended
April 30, 2003, and 2002):
<TABLE>
<CAPTION>


                                                           2003                 2002
                                                     -----------------     ---------------
        <S>                                              <C>                    <C>
        Expected dividend yield                           0.0%                  0.0%

        Risk-free interest rate                           2.0%                  2.5%

        Expected volatility                              37.8%                 37.4%

        Expected life of option                           5.0 years             5.0 years

        Weighted-average fair value of
           options granted during the year             $  0.99               $  1.77
</TABLE>

Using the above noted  assumptions and the  weighted-average  fair value of
each option granted, if the fair value of options issued had been recorded as an
expense,  the net loss and net loss per share that would have been  recorded for
the three months ended July 31, 2003, and 2002, respectively,  was approximately
$(252) and $(191), or $(0.03) and $(0.03) per share, and $(160) and $(2,888), or
$(0.02) and $(0.40) per share,  for the six months ended July 31, 2003 and 2002,
respectively.


4.  Accumulated Other Comprehensive Income (Loss)

The  accumulated  other  comprehensive  income  (loss)  resulted  from  the
translation of accounts into U.S.  dollars where the functional  currency is the
Canadian  dollar.  The  increase  during the year was due to an  increase in the
value of the Canadian  dollar  relative to the US dollar.  Comprehensive  income
(loss) for the three  months  ended July 31, 2003,  and 2002,  respectively  was
$(178) and $(148),  while  comprehensive  income (loss) for the six months ended
July 31, 2003, and 2002, respectively was $123 and ($2,795).


                                       8
<PAGE>



Item 2.  Management's Discussion and Analysis of Financial Condition, Results of
Operations and Liquidity and Capital Resources

Safe Harbor Statement Under the Private Securities Litigation Reform of Act
1995.

  Certain statements discussed in Item 2, "Management's Discussion and Analysis
  of Financial Condition and Results of Operations", Item 3, "Quantitative and
  Qualitative Disclosures about Market Risks", Item 1 of Part II, "Legal
  Proceedings" and elsewhere in this Quarterly Report on Form 10-Q constitute
  forward-looking statements within the meaning of the Private Securities
  Litigation Reform Act of 1995. Forward-looking statements are not statements
  of historical facts, but rather reflect the Company's current expectations
  concerning future events and results. Such forward-looking statements,
  including those concerning the Company's expectations, involve known and
  unknown risks, uncertainties and other factors, some of which are beyond the
  Company's control, that may cause the Company's actual results, performance or
  achievements, or industry results, to be materially different from any future
  results, performance or achievements expressed or implied by such
  forward-looking statements. Such risks, uncertainties and other important
  factors include, at a minimum, the Company's ability to obtain parts and
  components from its principal suppliers on a timely basis, depressed domestic
  and international market and economic conditions, especially those currently
  facing the aviation industry as a whole, the impact of changes in fuel and
  other freight related costs, relationships with its customers, the ability of
  the Company's customers to meet their financial obligations to the Company,
  the ability to obtain and service supply chain management contracts, changes
  in regulations or accounting standards, the ability to consummate suitable
  acquisitions and expand, and other items that are beyond the Company's control
  and may cause actual results to differ from management's expectations. In
  addition, specific consideration should be given to the various factors
  described in Item 7, "Management's Discussion and Analysis of Financial
  Condition and Results of Operations", in the Company's Annual Report on Form
  10-K for the year ended January 31, 2003. The Company disclaims any obligation
  or undertaking to provide any updates or revisions to any forward-looking
  statement to reflect any change in our expectations or any change in events,
  conditions, or circumstances on which the forward-looking statement is based.

General

The Company is one of the premier suppliers of products and services to the
aerospace industry worldwide, including aircraft parts and components supply
services, and supply chain management services. The Company also builds custom
hose assemblies, and performs overhaul and repair services for brakes and
starters/generators.

The Company's executive offices are located at 15 Riverside Avenue in Westport,
Connecticut, 06880. Further information about the Company and its subsidiaries
can be found on the worldwide web at www.favs.com. The Company can be reached
via e-mail at first@firstaviation.com.

Critical Accounting Policies

There have been no significant changes in those accounting policies the Company
considers critical from those described under the caption "Critical Accounting
Policies", included in Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations", in the Company's Annual Report
on Form 10-K for the year ended January 31, 2003.

Results of Operations

Net Sales

The Company's net sales consist of sales of products and services, including
parts and components, supply chain management services, and component overhaul
and repair services. Net sales are recorded when parts and components are
shipped and title transfers to the customer, when supply chain management
services have been provided to the customer, or when overhauled and repaired
items are completed and shipped back to the customer. Shipping and handling
billed to customers are included in net sales. The terms and nature of supply
chain management services are stipulated in a long-term contract between the
Company and the customer. The Company provides its facilities, personnel and
systems to provide the services at less cost to the customer. In providing
services where the Company distributes inventory on behalf of its customer, the
Company may use its own inventory or hold its customers' inventory without
taking ownership of such inventory. In cases where the Company does not take
ownership of its customers' inventory, net sales generally are recognized as a
fee based on the sales value of the product shipped through the Company's
facilities, and not the sales value of the product itself.


                                       9
<PAGE>

Net sales for the three months ended July 31, 2003, decreased $0.9 million,
or 3.4%, to $25.3 million from $26.2 million for the three months ended July 31,
2002.  During the three months ended July 31, 2003 net sales decreased  compared
to the comparable period of the prior year due to depressed economic  conditions
that resulted in reduced general  aviation  flying  activity,  and  subsequently
reduced demand for parts and components.  In addition,  as previously disclosed,
the Company had tightened its credit policies, especially in the airline sector,
and that  policy  has had a  significant,  negative  impact on net sales in this
sector (although the Company has, as explained later below, reduced its bad debt
exposure as well). The Company is searching for additional  sources of sales and
continuously re-examines the credit worthiness of its new and existing customers
to maximize sales with an acceptable level of credit risk.

Net sales for the six months ended July 31, 2003, effectively were flat compared
to the six months ended July 31, 2002, decreasing $0.3 million, or 0.5%, to
$50.9 million from $51.2 million for the six months ended July 31, 2002. The
reasons for the decrease in net sales for the six months ended July 31, 2003,
compared to the comparable period of the prior year, was due to the same reasons
described above, offset partially by stronger net sales in the three months
ended April 30, 2003, compared to the comparable period of the prior year.

On a geographic basis, for both the three and six months ended July 31, 2003,
compared to the comparable periods of the prior year, the majority of the sales
decline occurred domestically. Sales in Latin and South America also declined
compared to the comparable period of the prior year, as a result of poor local
and regional economic conditions. Partially offsetting these declines were
increases in sales in Canada, Europe and Asia as a result of new
customer-focused initiatives, and better local economic conditions.

Cost of Sales

Cost of sales consists of costs of inventory sold and direct costs of providing
services. Direct costs of providing services consist principally of personnel
related costs.

Cost of sales for the three months ended July 31, 2003, decreased $0.8 million,
or 3.6%, to $20.5 million from $21.3 million for the three months ended July 31,
2002. As a percentage of net sales, cost of sales decreased to 81.0% compared to
81.2% in the comparable period of the prior year. Cost of sales for the three
months ended July 31, 2003, decreased compared to the prior year principally due
to the decrease in net sales. The decrease in the percentage of cost of sales
compared to net sales was due to a shift in mix toward more supply chain
management services contracts, which have lower cost of sales.

Cost of sales for the six months ended July 31, 2003 decreased $0.4 million, or
0.9%, to $41.2 million from $41.6 million for the six months ended July 31,
2002. As a percentage of net sales, cost of sales decreased to 81.0% from 81.2%
for the comparable period of the prior year. Cost of sales for the six months
ended July 31, 2003, decreased compared to the prior year principally due to the
decrease in net sales. The decrease in the percentage of cost of sales compared
to net sales was due to a shift in mix toward more supply chain management
services contracts, which have lower cost of sales.

Gross Profit

Gross profit for the three months ended July 31, 2003, decreased $0.1 million,
or 2.4%, to $4.8 million from $4.9 million for the three months ended July 31,
2002. Gross profit as a percentage of net sales increased to 19.0% for the three
months ended July 31, 2003, compared to 18.8% for the three months ended July
31, 2002. Gross profit for the three months ended July 31, 2003, decreased
compared to the prior year principally due to the decrease in net sales. The
increase in gross profit as a percentage of net sales was due to a shift in mix
toward more supply chain management services contracts, which have a higher
margin.

Gross profit for the six months ended July 31, 2003, increased $0.1 million, or
0.9%, to $9.7 million from $9.6 million for the six months ended July 31, 2002.
Gross profit as a percentage of net sales increased to 19.0% for the six months
ended July 31, 2003, compared to 18.8% for the six months ended July 31, 2002.
Gross profit for the six months ended July 31, 2003, increased compared to the
prior year principally due to increased sales relating to services contracts.
The increase in gross profit as a percentage of net sales was due to a shift in
mix toward more supply chain management services contracts, which have a higher
margin.


                                       10
<PAGE>

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended July 31,
2003, decreased $0.2 million, or 4.8%, to $4.3 million from $4.5 million for the
three months ended July 31, 2002. The decrease is due principally to a decrease
in bad debt expense in the current year compared to the prior year.

Selling, general and administrative expenses for the six months ended July 31,
2003, and 2002 were flat at $8.6 million, as the decrease experienced for the
three months ended July 31, 2003, as described above, principally was offset by
additional indirect costs incurred related to services contracts.

Corporate Expenses

Corporate expenses for the three months ended July 31, 2003, increased $69,000,
or 10.2%, to $748,000 from $679,000 for the three months ended July 31, 2002.
The increase was due to costs incurred, including legal fees and printing and
filing costs, in connection with the Company's solicitation against a dissident
stockholder's proxy contest. These costs totaled approximately $122,000.
Excluding these costs, corporate expenses decreased 7.8%, due to management's
focus on controlling and decreasing corporate costs.

Corporate expenses for the six months ended July 31, 2003, and 2002, were flat
at $1.2 million, as the additional expenses incurred in connection with the
Company's solicitation against a dissident stockholder's proxy contest, as
described above, were offset by management's focus on controlling and decreasing
its corporate costs. Excluding the costs of the Company's proxy solicitation,
corporate expenses decreased 9.5%.

Net Interest Income (Expense) and Other

Net interest income and other for the three months ended July 31, 2003,
decreased from the three months ended July 31, 2002, principally due to lower
interest rates received on the Company's investments, and the lack of foreign
exchange income that had occurred during the comparable period of the prior
year.

Net interest income and other for the six months ended July 31, 2003, decreased
from the six months ended July 31, 2002, due principally to lower interest rates
received on the Company's investments.

Benefit (Provision) for Income Taxes

For both the three and six months ended July 31, 2003, the Company recorded a
provision for income taxes equivalent to its estimated liability for foreign
income taxes. No U.S. federal or state income tax benefit was recorded on the
losses incurred during the three and six months ended July 31, 2003, as the
benefit expected was offset in its entirety by a valuation reserve, consistent
with the position adopted during the Company's prior year-end. The effective
income tax rate for the three and six months ended July 31, 2002, was 39%, which
approximates the combined effective U.S. federal and state statutory rates.

Net Loss and Net Loss per Share

For the three months ended July 31, 2003, the Company incurred a net loss $0.2
million, or $0.03 per share, compared to a net loss of $0.1 million, or $0.02
per share, for the three months ended July 31, 2002. The increase in the net
loss incurred was due to the reasons described in the preceding sections.

For the six months ended July 31, 2003, the Company incurred a net loss of $0.1
million, or $0.01 per share, compared to a net loss of $2.8 million, or $0.39
per share for the six months ended July 31, 2002. The decrease in the net loss
incurred was due to the impact, in the prior year, of the net cumulative effect
of a change in accounting relating to goodwill and other intangibles of $2.7
million, or $0.38 per share. Without the accounting change in the prior year,
the net loss for the six months ended July 31, 2003, would have been flat
compared to the comparable period of the prior year, as the weakness experienced
in the three months ended July 31, 2003, was offset by stronger results for the
three months ended April 30, 2003, compared to the comparable period of the
prior year.


                                       11
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company's liquidity requirements arise principally from its working capital
needs. In addition, the Company has liquidity requirements to fund capital
expenditures to support its current operations, and facilitate growth and
expansion. The Company funds its liquidity requirements with a combination of
cash on hand, cash flows from operations and from borrowings. The Company
manages its cash and debt to minimize its interest expense.

Cash and cash equivalents at any time may consist of a combination of demand
deposits, money market or short-term, high-grade bond funds, and short-term
certificates of deposit.

For the six months ended July 31, 2003, the Company  generated $1.9 million
of cash from operating  activities,  compared to $2.6 million for the six months
ended July 31, 2002.  Cash was generated  from  operating  activities due to the
Company's continued focus on managing its overall working capital.  The decrease
in cash generated in the current year,  compared to the comparable period of the
prior year, was due to lower receivable balances in the current year compared to
the prior year,  and thus less  collections,  less cash generated from inventory
reductions  during the current  year,  compared to the prior year,  as inventory
levels previously had been reduced to more optimal levels,  and a large decrease
in accounts payable. Cash used in investing activities was $0.2 million and $0.5
million during the six months ended July 31, 2003, and 2002,  respectively.  The
Company expects that its aggregate capital expenditure requirements for the year
ending  January 31,  2004,  will range from  approximately  $0.4 million to $0.8
million.  The  Company's  capital  expenditure  requirements  have been lower in
recent  years due to heavy  capital  spending in prior  years.  Net cash used in
financing activities during the six months ended July 31, 2003 was $-0- million,
compared to cash used of $0.4 million for the six months ended July 31, 2002. In
the prior year, the Company  utilized cash provided from  operations to reduce a
portion of its outstanding debt.

API has a $20 million Commercial Revolving Loan and Security Agreement (the
"Facility"). Borrowings under this Facility bear interest equal to the LIBOR
rate plus 1.5%, and are limited to specified percentages of eligible trade
receivables and inventories of API. The Facility contains a number of covenants,
including restrictions on mergers, consolidations and acquisitions, the
incurrence of indebtedness, transactions with affiliates, the creation of liens,
and limitations on capital expenditures. Pursuant to the terms and conditions of
the Facility, the payment of dividends on API's common stock is prohibited,
except with the lender's consent, and API is required to maintain minimum levels
of net worth and specified interest expense coverage ratios. Substantially all
of API's domestic assets are pledged as collateral under the Facility, and First
Aviation guarantees all borrowings under the Facility. Borrowings under the
Facility totaled $14.5 million at July 31, 2003, at an interest rate of
approximately 2.6%. Approximately $2.1 million was available under the Facility
at July 31, 2003. The Facility was scheduled to expire July 1, 2004, however,
effective July 31, 2003, the Facility was extended to July 1, 2005, on
substantially the same terms and conditions. Therefore, borrowings under the
Facility continue to be classified as long term.

On January 6, 2003, the Company's Board of Directors, in light of the Company's
cash position, approved a special cash dividend of $1.00 per share that was paid
on January 30, 2003. The total paid to the stockholders was $7.3 million. Other
than this special dividend, the Company has not declared nor paid any cash
dividends or distributions on its common stock since its inception in 1997. At
this time, the Company anticipates that all future earnings will be retained for
use in the Company's business. Any payment of cash dividends in the future on
the Company's common stock will be dependent upon the Company's financial
condition, its results of operations, current and anticipated cash requirements,
plans for expansion, the ability of its subsidiaries to pay dividends or
otherwise make cash payments or advances to it, and restrictions, if any, under
any future debt obligations, as well as any other factors that the Board of
Directors deems relevant.

In conjunction with the Company's acquisition of API in 1997, AMR Combs, Inc.
("AMR Combs") purchased 10,407 shares of API Series A Convertible Preferred
Stock, $0.001 par value, with annual dividends of $4.00 per share, payable
quarterly (the "Convertible Preferred Stock"). API has the right to redeem the
Convertible Preferred Stock at any time. AMR Combs has the right to cause API to
repurchase the Convertible Preferred Stock. The Company has, under certain
circumstances, the ability to defer AMR Combs' ability to cause API to
repurchase the Convertible Preferred Stock. The redemption price is equal to the
fair market value of the Convertible Preferred Stock as determined by an
independent appraisal.


                                       12
<PAGE>

On March 5, 1999, AMR Combs was acquired by Signature Flight Support, an
affiliate of BBA Group Plc.

Based upon current and anticipated levels of operations, the Company believes
that cash flow from operations, combined with cash on hand, and the availability
under the Facility, will be sufficient to meet its current and anticipated
operating cash requirements for the foreseeable future, including scheduled
interest and principal payments, capital expenditures, minority interest
requirements, working capital needs, and cash required for acquisitions that the
Company may pursue.

Contractual Obligations
-----------------------

As described above, the Company extended the maturity date of the Facility to
July 1, 2005. There have been no significant changes in the Company's
commitments under operating leases since that disclosed in the Company's Annual
Report on Form 10-K for the year ended January 31, 2003.


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

The Company's Canadian operations utilize the Canadian dollar as their
functional currency, while the Company's Asian operation utilizes the U.S.
dollar as its functional currency. The Company has transactions denominated in
Canadian dollars and Philippine pesos. Foreign currency transaction exposure
arises principally from the transfer of foreign currency to and/or from US
dollars from one subsidiary to another within the FAvS group, and from foreign
currency denominated trade receivables. Currency transaction and translation
exposures are not hedged. Foreign currency transaction gains and losses are
included in earnings. They have not been significant. Unrealized currency
translation gains and losses are recognized as other comprehensive income or
loss upon translation of foreign subsidiaries' balance sheets to U.S. dollars.
The Company does have risk principally relating to the translation of accounts
in which the Canadian dollar is the functional currency.

Item 4. Controls and Procedures
-------------------------------

The Company's management evaluated, with the participation of the Company's
principal executive and principal financial officers, the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), as of July 31, 2003. Based on their evaluation, the Company's principal
executive and principal financial officers concluded that the Company's
disclosure controls and procedures were effective as of July 31, 2003.

There has been no change in the Company's internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
that occurred during the Company's fiscal quarter ended July 31, 2003, that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                           PART II - OTHER INFORMATION
                           ---------------------------

Item 1. Legal Proceedings
-------------------------

The Company's  business  exposes it to possible claims for personal injury,
death or  property  damage  that may  result  from a failure  of  certain  parts
serviced  by the  Company  or  spare  parts  and  components  sold by it,  or in
connection  with the  provision of its supply  chain  management  services.  The
Company takes what it believes to be adequate  precautions to ensure the quality
of the  work  it  performs  and  the  traceability  of the  aircraft  parts  and
components that it sells. The original equipment  manufacturers that manufacture
the parts,  components  and  supplies  that the Company  sells  carry  liability
insurance on the products they manufacture.  In addition,  the Company maintains
what it believes is adequate liability insurance to protect it from any claims.

In the normal conduct of its business, the Company also is involved in various
claims and lawsuits, none of which, in the opinion of the Company's management,
will have a material, adverse impact on the Company's consolidated financial
position. The Company maintains what it believes is adequate liability and other
insurance to protect it from such claims. However, depending on the amount and
timing, unfavorable resolution of any of these matters could have a material
effect on the Company's consolidated financial position, results of operations
or cash flows in a particular period.


                                       13
<PAGE>

Item 2. Changes in Securities and Use of Proceeds
-------------------------------------------------

NONE

Item 3. Defaults Upon Senior Securities
---------------------------------------

NONE

Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

The Company's Annual Meeting of Stockholders was held on June 10, 2003, in
Memphis, Tennessee, for the purpose of (i) electing two Class I Directors for a
term to expire at the Annual Meeting of Stockholders in the year 2006, (ii)
ratifying the appointment of Ernst & Young LLP, as independent auditors for the
year ending January 31, 2004 and (iii) to approve an amendment to the First
Aviation Services Inc. Stock Incentive Plan. Proxies were solicited from holders
of 7,251,370 outstanding shares of Common Stock as of the close of business on
May 9, 2003, as described in the Company's Proxy Statement dated May 15, 2003.
Stanley J. Hill and Aaron P. Hollander, both of management's nominees for
directors, were elected, the appointment of Ernst & Young LLP was ratified, and
the proposed amendment to the First Aviation Services Inc. Stock Incentive Plan
was approved by the following votes:
<TABLE>
<CAPTION>

         (1)  To elect two directors for a three-year term to expire at the
              Annual Meeting of Shareholders in the year 2006.

              <S>                               <C>                   <C>                   <C>
                                               Votes                  Votes                Broker
              Name                              FOR                   WITHHELD             Non-votes
              ----                           ---------                ---------            ---------
              Stanley J. Hill                4,856,027                 57,400                 -0-
              Aaron P. Hollander             4,856,027                 57,400                 -0-
              Nelson Obus                    2,291,594                    -0-                 -0-

              Michael C. Culver, Robert L. Kirk, and Joseph J. Lhota continue to serve as directors
              of the Company after the Annual Meeting of Stockholders.

</TABLE>
<TABLE>
<CAPTION>
         (2)  To ratify the appointment of Ernst & Young LLP as the Company's
              independent auditors for the fiscal year ending January 31, 2004.
                           <S>                        <C>                <C>               <C>
                           Votes                     Votes               Votes             Broker
                           FOR                       AGAINST           ABSTAINED           Non-votes
                          ---------                  -------           ---------           ---------
                          7,201,421                   3,100                500               -0-

         (3)  To approve the proposed amendment to the First Aviation Services
              Inc. Stock Incentive Plan.

                           Votes                     Votes               Votes              Broker
                           FOR                       AGAINST           ABSTAINED            Non-votes
                          ---------                  -------           ---------           ---------
                          4,842,547                  117,480             2,244,994           -0-
</TABLE>

Item 5. Other Information
-------------------------

NONE



                                       14
<PAGE>


Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

3.1      Restated Certificate of Incorporation of the Company (filed as Exhibit
         3.1  to  the  Company's   Registration  Statement  on  Form  S-1  (No.
         333-18647),  as amended,  filed on December 23, 1996, and incorporated
         herein by reference).

3.3      Certificate of Correction to the Restated Certificate of Incorporation.

10.19    Fifth  Amendment to Commercial  Revolving Loan and Security  Agreement
         dated as of July 31, 2003,  between  Hudson  United Bank and Aerospace
         Products International, Inc.

10.20    Fifth  Reaffirmation  of Guaranty  dated as of July 31, 2003, by First
         Aviation Services Inc. and in favor of Hudson United Bank.

10.21    Amendment No. 3 to the First Aviation Services Inc. Stock Incentive
         Plan.

31.1     Certification of Chief Executive Officer required by Rule 13a-14(a).

31.2     Certification of Chief Financial Officer required by Rule 13a-14(a).

32.1     Certification  of Chief Executive  Officer  required by Rule 13a-14(b)
         and 18 U.S.C. Section 1350 (furnished herewith).

32.2     Certification  of Chief Financial  Officer  required by Rule 13a-14(b)
         and 18 U.S.C. Section 1350 (furnished herewith).

(b) Reports on Form 8-K.

      Current Report on Form 8-K dated July 11, 2003, announcing, under Item 5,
      revised, final voting results from the Company's June 10, 2003 Annual
      Meeting of Stockholders.




                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   First Aviation Services Inc.
                                               (Registrant)


Date: September 12, 2003           /s/ Michael C. Culver
                                   -------------------------------------------
                                   Michael C. Culver,
                                   President, Chief Executive Officer and
                                   Director (Principal Executive Officer)


Date: September 12, 2003           /s/ Michael D. Davidson
                                   -------------------------------------------
                                   Michael D. Davidson,
                                   Chief Financial Officer (Principal Financial
                                   and Accounting Officer)


                                       15
<PAGE>
<TABLE>
<CAPTION>


                                INDEX TO EXHIBITS


  Exhibit No.                               Description
  -----------                               -----------
    <S>                                     <C>

     3.1                                    Restated Certificate of Incorporation of the Company (filed as Exhibit
                                            3.1  to  the  Company's   Registration  Statement  on  Form  S-1  (No.
                                            333-18647),  as amended,  filed on December 23, 1996, and incorporated
                                            herein by reference).

     3.3                                    Certificate of Correction to the Restated Certificate of
                                            Incorporation.

     10.19                                  Fifth Amendment to Commercial Revolving Loan and Security Agreement
                                            dated as of July 31, 2003, between Hudson United Bank and Aerospace
                                            Products International, Inc.

     10.20                                  Fifth Reaffirmation of Guaranty dated as of July 31, 2003, by First
                                            Aviation Services Inc. and in favor of Hudson United Bank.

     10.21                                  Amendment No. 3 to the First Aviation Services Inc. Stock Incentive
                                            Plan.

     31.1                                   Certification of Chief Executive Officer required by Rule 13a-14(a).

     31.2                                   Certification of Chief Financial Officer required by Rule 13a-14(a).

     32.1                                   Certification of Chief Executive Officer required by Rule 13a-14(b)
                                            and 18 U.S.C. Section 1350 (furnished herewith).

     32.2                                   Certification of Chief Financial Officer required by Rule 13a-14(b)
                                            and 18 U.S.C. Section 1350 (furnished herewith).

</TABLE>


                                       16
<PAGE>