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 April 30, 2002
                                                 --------------

                  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__

The number of shares outstanding of the registrant's common stock as of June 7,
2002 is 7,218,346 shares.

                                       1
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                          First Aviation Services Inc.

                                      Index

                         Part I - Financial Information


Item 1.  Financial Statements  (Unaudited):

<S>                                                                                                              <C>
         Consolidated Condensed Balance Sheets....................................................................3
         Consolidated Condensed Statements of Operations..........................................................4
         Consolidated Condensed Statements of Cash Flows..........................................................5
         Notes to Consolidated Condensed Financial Statements...................................................6-7

Item 2.  Management's Discussion and Analysis of Financial Condition, Results of Operations and
         Liquidity and Capital Resources.......................................................................8-11

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



                   Part II - Other Information and Signatures

Other Information and Signatures.................................................................................12
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                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                          First Aviation Services Inc.

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


                                                                                April 30,         January 31,
                                                                                  2002               2002
                                                                            ----------------------------------
                                                                               (unaudited)             *
Assets
Current assets:
<S>                                                                              <C>               <C>
      Cash and cash equivalents                                                  $ 32,147          $ 31,113
      Trade receivables, net of allowance for doubtful                             14,166            15,396
         accounts of $714 and $707, respectively
      Inventory, net of allowance for obsolete and slow moving                     21,741            23,016
         inventory of $928 and $885, respectively
      Prepaid expenses, deferred income taxes and other                             4,466             3,034
                                                                            --------------    --------------

Total current assets                                                               72,520            72,559

Plant and equipment, net                                                            4,223             4,100
Goodwill and other intangibles, net                                                    30             3,885
                                                                            --------------    --------------

                                                                                 $ 76,773          $ 80,544
                                                                            ==============    ==============

Liabilities and stockholders' equity
Current liabilities:
      Accounts payable                                                           $ 11,397          $ 11,464
      Accrued compensation and related expenses, and                                1,992             2,748
          other accrued liabilities
      Income taxes payable                                                          1,343             1,293
      Obligations under capital leases                                                122               180
                                                                            --------------    --------------

Total current liabilities                                                          14,854            15,685

      Revolving line of credit                                                     14,500            14,800
      Minority interest in subsidiary                                               1,041             1,041
                                                                            --------------    --------------

Total liabilities                                                                  30,395            31,526

Stockholder's equity:

      Common stock, $0.01 par value, 25,000,000 shares authorized,                     91                91
          7,217,695 and 7,213,753 shares outstanding, respectively
      Additional paid-in capital                                                   38,495            38,516
      Retained earnings                                                            18,071            20,728
      Accumulated other comprehensive loss                                           (196)             (193)
                                                                            --------------    --------------

                                                                                   56,461            59,142
      Less:  Treasury stock, at cost                                              (10,083)          (10,124)
                                                                            --------------    --------------

Total stockholders' equity                                                         46,378            49,018
                                                                            --------------    --------------

Total liabilities and stockholders' equity                                       $ 76,773          $ 80,544
                                                                            ==============    ==============

See accompanying notes.

* Balances were derived from the audited balance sheet as of January 31, 2002.
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                          First Aviation Services Inc.

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



                                                                                            Three months ended
                                                                                                 April 30,
                                                                                           2002            2001
                                                                                       --------------  --------------
<S>                                                                                         <C>             <C>
Net sales                                                                                   $ 24,998        $ 25,571
Cost of sales                                                                                 19,378          20,362
                                                                                       --------------  --------------

Gross profit                                                                                   5,620           5,209
Selling, general and administrative expenses                                                   4,960           4,735
Corporate expenses                                                                               554             535
Litigation expense                                                                                 -              45
                                                                                       --------------  --------------

Income (loss) from operations                                                                    106            (106)
Net interest income and other                                                                     32             213
Minority interest in subsidiary                                                                  (10)            (10)
                                                                                       --------------  --------------

Income before income taxes                                                                       128              97
Provision for income taxes                                                                        50              10
                                                                                       --------------  --------------

Income before cumulative effect of accounting change                                              78              87
Cumulative effect of accounting change, net                                                   (2,735)              -
                                                                                       --------------  --------------

Net income (loss)                                                                           $ (2,657)           $ 87
                                                                                       ==============  ==============


Basic net income (loss) per common share, and net income (loss) per common share
     - assuming dilution:

     Income before cumulative effect of accounting change                                     $ 0.01          $ 0.01
     Cumulative effect of accounting change, net                                               (0.38)              -
                                                                                       --------------  --------------

Basic net income (loss) per common share, and net income (loss)                              $ (0.37)         $ 0.01
     per common share - assuming dilution                                              ==============  ==============

Weighted average common shares outstanding - basic                                         7,214,107       7,186,454
                                                                                       ==============  ==============

Weighted average common shares outstanding - assuming dilution                             7,230,763       7,191,651
                                                                                       ==============  ==============


See accompanying notes.

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                          First Aviation Services Inc.

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



                                                                                         Three months ended
                                                                                             April 30,
                                                                                        2002            2001
                                                                                     -----------     -----------
<S>                                                                                     <C>                <C>
Cash flows from operating activities
Net income (loss)                                                                       $(2,657)           $ 87
Adjustments to reconcile net income (loss) to net
     cash from operating activities:
      Cumulative effect of accounting change, net                                         2,735               -
      Depreciation and amortization                                                         334             348
      Stock compensation                                                                     19              24
Changes in assets and liabilities:
      Trade receivables                                                                   1,243            (720)
      Inventory                                                                           1,285           1,332
      Other assets                                                                         (254)             23
      Accounts payable                                                                      (70)         (2,652)
      Accrued compensation and related expenses, and other accrued liabilities             (809)           (307)
      Income taxes payable                                                                   31               -
                                                                                     -----------     -----------

Net cash provided by (used in) operating activities of continuing operations              1,857          (1,865)
Net cash (used in) operating activities of discontinued operations                            -            (166)
                                                                                     -----------     -----------
Net cash provided by (used in) operating activities                                       1,857          (2,031)

Cash flows from investing activities
Purchases of plant and equipment and other assets                                          (465)           (226)
                                                                                     -----------     -----------

Net cash used in investing activities                                                      (465)           (226)

Cash flows from financing activities
Net repayments on revolving line of credit                                                 (300)              -
Principal payments on capital lease obligations and other                                   (58)            (65)
                                                                                     -----------     -----------

Net cash used in financing activities                                                      (358)            (65)
                                                                                     -----------     -----------

Net increase (decrease) in cash and cash equivalents                                      1,034          (2,156)

Cash and cash equivalents at beginning of period                                         31,113          31,855
                                                                                     -----------     -----------

Cash and cash equivalents at end of period                                             $ 32,147        $ 29,699
                                                                                     ===========     ===========


Supplemental cash flow disclosures:
      Interest paid                                                                        $ 17            $ 67
                                                                                     ===========     ===========
      Income taxes paid                                                                    $ 75             $ -
                                                                                     ===========     ===========


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See accompanying notes.

                                       5

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                          First Aviation Services Inc.

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

                                 April 30, 2002



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 leading suppliers of aircraft
parts and components to the aviation industry worldwide, and is a provider of
supply chain management services, including third party logistics and inventory
management services, to the aerospace industry. The Company also performs
overhaul and repair services for brakes and starter/generators, and builds
custom hose assemblies. Customers of the Company include original equipment
manufacturers, passenger and cargo airlines, fleet operators, corporate aircraft
operators, 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 generally
accepted accounting principles 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 by generally accepted
accounting principles 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
months ended April 30, 2002 are not necessarily indicative of the results that
may be expected for the full fiscal year ending January 31, 2003. 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, 2002.


2.  Weighted Average Shares Outstanding - Assuming Dilution

The following sets forth the denominator used in the computation of net income
(loss) per common share - assuming dilution:

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                                                                                 Three months ended
                                                                                      April 30,
                                                                              2002                 2001
                                                                        -----------------     ----------------
     Denominator:
       Denominator for basic net income (loss)
<S>                                                                         <C>                 <C>
          per common share - weighted average shares                        7,214,107           7,186,454

       Effect of dilutive employee stock options                               16,656               5,197
                                                                        -----------------     ----------------

       Denominator for net income (loss) per common share - assuming dilution -
          adjusted weighted average
          shares and assumed dilutions                                      7,230,763           7,191,651
                                                                        =================     ================
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                                       6
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3. Acquisition and Discontinued Operations

On August 10, 2001 the Company completed the acquisition of the distribution
business of Superior Air Parts, Inc. ("Superior"). Pursuant to the terms of the
acquisition, the Company acquired the distribution business of Superior,
including four distribution centers and certain inventory and equipment, and was
named a worldwide distributor for Superior's product line of replacement parts
for certain aircraft engines. In addition, the Company entered into a service
agreement with Superior whereby the Company provides Superior with a variety of
third party logistics and inventory management services for a fee based upon the
scope of the services provided. In connection with the acquisition, the Company
recorded approximately $543 of accruals to cover the estimated costs to complete
the acquisition and implement a plan to streamline operations, consolidate
facilities, and close the distribution centers. During the three months ended
April 30, 2002 approximately $85 of the accruals were paid, leaving a balance of
approximately $62 at April 30, 2002. The remaining accruals will be utilized
during the remainder of the fiscal year.

As reported previously, the Company in prior years sold its former wholly owned
subsidiary, National Airmotive Corporation ("NAC"), and, in a separate
transaction, discontinued AeroV Inc. ("AeroV"), its former wholly owned
e-commerce subsidiary. Pursuant to these transactions the Company accrued for
certain costs directly related to the respective transaction. During the three
months ended April 30, 2002 and 2001, respectively, approximately $57 and $49 of
the accruals relating to NAC were paid. There were no accruals remaining related
to the sale of NAC at April 30, 2002. During the three months ended April 30,
2002 and 2001, respectively, approximately $28 and $166 of the accruals relating
to AeroV were paid. The balance of the accruals related to AeroV at April 30,
2002 was $28.


4.  Accounting Change

During the first quarter, as required, the Company adopted Financial Accounting
Standards Board Pronouncement No. 142, "Goodwill and Other Intangible Assets",
("FAS 142"). Under FAS 142 goodwill no longer is amortized but is tested
periodically for impairment using discounted cash flows and other fair value
methodologies. The application of the non amortization provision of FAS 142 did
not have a significant impact on results for the three months ended April 30,
2002. Upon adoption of FAS 142 the Company was required to perform impairment
tests relating to API's goodwill and other intangibles existing at the date of
adoption. As a result, the Company took a non-cash charge of $2,735, net of
applicable income tax benefit of $922, or $0.38 per share, to write-off the
carrying value of its goodwill. No charge was required under previous generally
accepted accounting principles, which were based upon undiscounted cash flows.

The adoption of FAS 142 represented a change in accounting principle, and the
cumulative effect, net of the income tax benefit, was shown on a separate line
in the Consolidated Condensed Statements of Operations. The effective rate of
the income tax benefit of the charge was approximately 25%. The difference
between the effective income tax rate and the statutory rate was due to
differences in book and income tax bases of the assets.

                                       7

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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.

Information included in this Quarterly Report on Form 10-Q may contain
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. In evaluating such statements, as well as the future prospects of
the Company, specific consideration should be given to various factors,
including the Company's ability to obtain parts and components from its
principal suppliers on a timely basis, 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 to obtain and service supply chain
management contracts, the ability to consummate suitable acquisitions, 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 discussed in this Quarterly Report on
Form 10-Q.

General

The Company is one of the leading suppliers of aircraft parts and components to
the aviation industry worldwide, and is a provider of supply chain management
services, including third party logistics and inventory management services, to
the aerospace industry. The Company also performs overhaul and repair services
for brakes and starters/generators, and builds custom hose assemblies.

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.firstaviation.com. The Company can be
reached via e-mail at first@firstaviation.com.

Results for the three months ended April 30, 2002 continue to be adversely
impacted by the general slowdown in the aviation industry that began last year
and increased after the terrorist acts that occurred on September 11, 2001 and
the repercussions that followed. Recovery in the industry has been slow, and the
aerospace industry overall is experiencing a significant decline, especially in
the general aviation and commercial airline sectors.

Results of Operations

Net Sales

The Company's net sales consist of sales of parts and components, component
overhaul and repair services, and the provision of supply chain management
services. Net sales are recorded when parts, components and overhauled and
repaired items are shipped and title transfers to the customer, or when supply
chain management services have been provided. Shipping and handling costs billed
to customers are included in net sales.

Net sales for the three months ended April 30, 2002 decreased $0.6 million, or
2.2%, to $25.0 million from $25.6 million for the three months ended April 30,
2001. Net sales during the three months ended April 30, 2002 decreased compared
to the prior year as a result of the downturn in the aviation industry that
resulted in a decrease in net sales in the Company's traditional distribution
business, partially offset by an increase in revenues from the Superior
distribution business and logistics contract. Revenues from logistics services,
while not significant to overall net sales, continue to grow as planned relative
to the Company's traditional distribution business.

                                       8
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Cost of Sales

Cost of sales for the three months ended April 30, 2002 decreased $1.0 million,
or 4.8%, to $19.4 million from $20.4 million for the three months ended April
30, 2001. As a percentage of net sales, cost of sales decreased to 77.5%
compared to 79.6% for the comparable period of the prior year. For explanation
of the changes from the prior year, see Net Sales and Gross Profit.

Gross Profit

Gross profit for the three months ended April 30, 2002 increased $0.4 million,
or 7.9%, to $5.6 million from $5.2 million for the three months ended April 30,
2001. Gross profit as a percentage of net sales increased to 22.5% from 20.4%.

Gross profit increased during the three months ended April 30, 2002 compared to
the prior year principally due to a combination of new distribution sales from
the Superior product line, favorable changes in product mix, and new logistics
services sales. Logistics services contracts generally are structured based upon
a fee relative to the value of the customer's product shipped through our
system, as well as other services provided on our customers' behalf. The Company
leverages its existing facilities, personnel and systems to provide services at
less cost to the customer. These services generally are more profitable than
traditional distribution.

The value of product shipped through our facilities increased approximately 20%
this year over the same quarter last year. The Company expects this trend to
continue.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended April
30, 2002 increased $0.3 million, or 4.8%, to $5.0 million from $4.7 million for
the three months ended April 30, 2001. Selling, general and administrative
expenses increased over the prior year principally due to increased freight
costs as a result of higher shipping rates, higher advertising and
promotional costs, increased insurance costs and new business related costs.

Corporate Expenses

Corporate expenses for the three months ended April 30, 2002 effectively were
flat from the amount incurred during the three months ended April 30, 2001.
Increased costs for insurance and franchise taxes incurred during the three
months ended April 30, 2002 compared to the same period of the prior year were
offset by a reduction in personnel related costs.

Litigation Expense

Litigation expense for the three months ended April 30, 2001 related to the
Company's litigation against Gulf Insurance Company. This litigation was settled
in the last quarter of the prior fiscal year. No expenses relating to this
litigation were incurred during the three months ended April 30, 2002.

Net Interest Income and Other

Net interest income and other for the three months ended April 30, 2002
decreased $0.2 million for the three months ended April 30, 2001. The decrease
in net interest income and other during the three months ended April 30, 2002
was due to a marked decrease in interest rates from the first quarter of the
prior year to the current fiscal year.

Provision for Income Taxes

The effective income tax rate for the three months ended April 30, 2002 was 39%.
Management  expects that the effective income tax rate will approximate 39% for
the full year ended  January 31,  2003.  The  effective  income tax rate for the
three months ended April 30, 2001 was 10%. The difference  between the statutory
income tax rate and the Company's effective income tax rate for the three months
ended  April 30, 2001 was due  principally  to a  reduction  in certain  accrued
income tax exposures as a result of changes in estimates.

                                       9
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Income before Cumulative Effect of Accounting Change

For the  three  months  ended  April  30,  2002  and  2001  the  Company  earned
approximately  $0.1  million.  An  increase  in gross  profit as a result of new
business and favorable changes in product mix compared to that of the prior year
were offset by higher freight,  advertising and promotion  costs,  less interest
income due to the decrease in interest rates and a higher  effective  income tax
rate. The overall result was that income before  cumulative effect of accounting
change was flat compared to that of the prior year.

Cumulative Effect of Accounting Change, Net

During the first quarter, as required, the Company adopted FAS 142. Under FAS
142 goodwill no longer is amortized but is tested periodically for impairment
using discounted cash flows and other fair value methodologies. Upon adoption of
FAS 142 the Company took a non-cash charge of $2,735, net of applicable income
tax benefit of $922, or $0.38 per share, to write-off the carrying value of its
goodwill. No charge was required under previous generally accepted accounting
principles, which were based upon undiscounted cash flows. The application of
the non amortization provision of FAS 142 did not have a significant impact on
results for the three months ended April 30, 2002.

The adoption of FAS 142 represented a change in accounting principle, and the
cumulative effect, net of the income tax benefit, was shown on a separate line
in the Consolidated Condensed Statements of Operations. The effective rate of
the income tax benefit of the charge was approximately 25%. The difference
between the effective income tax rate and the statutory rate was due to
differences in book and income tax bases of the assets.

Net Income (Loss) and Net Income (Loss) per Common Share

The Company incurred a net loss of $2.7 million, or $0.37 per common share for
the three months ended April 30, 2002, compared to net income of $0.1 million,
or $0.01 per common share for the three months ended April 30, 2001. The
decrease in net income was due to the reasons described in the preceding
sections.

Liquidity and Capital Resources

The Company's liquidity requirements arise principally from its working capital
needs, which have increased due to growth and expansion. In addition, the
Company has liquidity requirements to fund capital expenditures to support its
growth and expansion, and maintain its current operations. 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 reduce
its interest expense.

The Company invests its cash and cash equivalents in certificates of deposit and
commercial paper with maturities when purchased of three months or less.

For the three months ended April 30, 2002 the Company generated $1.9 million of
cash from operating activities, compared to a net use of cash of $2.0 million
for the three months ended April 30, 2001. The increase in cash generated
compared to the prior year was due to the Company's continued focus on
increasing cash collections on receivables, reducing inventory and managing its
overall working capital. The Company has been reducing its inventory levels
since the third quarter of the prior fiscal year when the Company acquired
Superior and a significant amount of inventory. Inventory levels at April 30,
2002 are less than they were before the Superior acquisition. Cash used in
investing activities was $0.5 million and $0.2 million during the three months
ended April 30, 2002 and 2001, respectively. The increase in cash used in
investing activities was due to the timing of capital expenditures incurred to
support new growth initiatives. The Company expects that its capital
requirements for the year ended January 31, 2003 will be approximately $1.0
million. Net cash used in financing activities during the three months ended
April 30, 2002 was $0.4 million, compared to $0.1 million for the three months
ended April 30, 2001. Net cash used in financing activities during the three
months ended April 30, 2002 increased over the prior year due to repayments on
the Company's borrowings.

                                       10
<PAGE>

In June 2001, API extended its $20 million commercial revolving loan and
security agreement to July 1, 2003. Borrowings under this credit 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 credit
agreement 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.
The credit agreement also requires API to maintain minimum levels of net worth
and specified interest expense coverage ratios, and restricts the payment of
dividends on API's common stock. Substantially all of API's domestic assets are
pledged as collateral under this credit facility, and First Aviation guarantees
all borrowings under the facility. Borrowings under the facility totaled $14.5
million at April 30, 2002, at an interest rate of approximately 3.38%.
Approximately $3.2 million was available under the facility at April 30, 2002.
This agreement replaced a prior agreement that contained substantially the same
terms and conditions.

The Company has not declared or paid any cash dividends or distributions on its
common stock since its inception in 1997. The Company anticipates that for the
foreseeable future, all earnings will be retained for use in the Company's
business and no cash dividends will be paid on its common stock. API's current
credit facility prohibits the payment of cash dividends to First Aviation,
except with the lender's consent, and contains other covenants and restrictions.
Any payment of cash dividends in the future on the common stock will be
dependent upon the Company's financial condition, 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 other
factors that the Board of Directors deems relevant.

In conjunction with the Company's acquisition of API, 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.

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 its cash flow from operations, combined with cash on hand and borrowings
under its line of credit, will be sufficient to meet its current and anticipated
cash operating requirements for the foreseeable future, including scheduled
interest and principal payments, capital expenditures, minority interest
requirements and working capital needs. In addition, the Company may use its
cash on hand to pursue potential acquisitions.

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 primarily from the transfer of foreign currency from one subsidiary to
another within the FAvS group, and to foreign currency denominated trade
receivables. Currency transaction and translation exposures are not hedged.
Foreign currency transaction gains and losses are included in earnings, and 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
relating to the translation of accounts in which the Canadian dollar is the
functional currency.

                                       11
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

NONE

Item 2. Changes in Securities

NONE

Item 3. Defaults Upon Senior Securities

NONE

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

NONE

Item 5. Other Information

NONE

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

NONE

(b) Reports on Form 8-K.

NONE


                                   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: June 14, 2002             /s/ Michael C. Culver
                                -------------------------------------------
                                Michael C. Culver,
                                President, Chief Executive Officer and
                                Director (Principal Executive Officer)


Date: June 14, 2002             /s/ Michael D. Davidson
                                -------------------------------------------
                                Michael D. Davidson,
                                Chief Financial Officer (Principal Financial
                                and Accounting Officer)

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