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, 2004
                                                 _____________

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

                  For the transition period from___________ to ____________

                         Commission File 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 1, 2004 is 7,304,332 shares.

<PAGE>


                          First Aviation Services Inc.

                                      Index

                         Part I - Financial Information
                         ------------------------------
<TABLE>
<CAPTION>
Item 1.  Financial Statements  (Unaudited):

<S>                                                                                                              <C>
         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..................................................7-10

Item 2.  Management's Discussion and Analysis of Financial Condition, Results of Operations and
         Liquidity and Capital Resources......................................................................10-16

Item 3.  Quantitative and Qualitative Disclosures about Market Risks.............................................16

Item 4.  Controls and Procedures.................................................................................16



                                            Part II - Other Information

Item 1.   Legal Proceedings......................................................................................17

Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.......................17

Item 3.   Defaults Upon Senior Securities........................................................................17

Item 4.   Submission of Matters to a Vote of Security Holders.................................................17-18

Item 5.   Other Information .....................................................................................18

Item 6.   Exhibits and Reports on Form 8-K.......................................................................18
</TABLE>


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

                          First Aviation Services Inc.

                      Consolidated Condensed Balance Sheets
                      (in thousands, except share amounts)
<TABLE>
<CAPTION>


                                                                                                      July 31, January 31,
                                                                                                        2004      2004
                                                                                                    ----------- ---------
                                                                                                    (unaudited)    *
Assets
Current assets:
<S>                                                                                                    <C>      <C>
      Cash and cash equivalents                                                                        $23,288  $25,144
      Trade receivables, net of allowance for doubtful
         accounts of $1,098 and $1,418, respectively                                                    16,024   13,499
      Inventory, net of allowance for slow moving and obsolete
         inventory of $1,237 and $1,013, respectively                                                   21,915   22,344
      Prepaid expenses and other                                                                           831    1,032
                                                                                                    ----------- --------

Total current assets                                                                                    62,058   62,019

Plant and equipment, net                                                                                 2,920    2,963
                                                                                                    ----------- --------

Total Assets                                                                                           $64,978  $64,982
                                                                                                    =========== ========

Liabilities and stockholders' equity
Current liabilities:
      Accounts payable                                                                                 $10,184   $9,561
      Accrued compensation and related expenses                                                            863    1,116
      Other accrued liabilities                                                                          2,025    1,260
      Income taxes payable                                                                                 921      939
                                                                                                    ----------- --------

Total current liabilities                                                                               13,993   12,876

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

Total liabilities                                                                                       29,534   28,417

Stockholders' equity:

      Common stock, $0.01 par value, 25,000,000 shares authorized,
          9,135,699 shares issued                                                                           91       91
      Additional paid-in capital                                                                        38,347   38,375
      Retained earnings                                                                                  6,310    7,554
      Accumulated other comprehensive income                                                               271      238
                                                                                                    ----------- --------

                                                                                                        45,019   46,258
      Less:  Treasury stock, at cost, 1,831,367 and 1,851,606
          shares, respectively                                                                          (9,575)  (9,693)
                                                                                                    ----------- --------

Total stockholders' equity                                                                              35,444   36,565
                                                                                                    ----------- --------

Total liabilities and stockholders' equity                                                             $64,978  $64,982
                                                                                                    =========== ========

See accompanying notes.

* Balances were derived from the audited balance sheet as of January 31, 2004.
</TABLE>


                                       3
<PAGE>

                          First Aviation Services Inc.

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

<TABLE>
<CAPTION>


                                                                                                    Three months ended
                                                                                                         July 31,
                                                                                                        2004       2003
                                                                                                   ---------- ----------

<S>                                                                                                  <C>        <C>
Net sales                                                                                            $31,072    $25,278
Cost of sales                                                                                         26,303     20,471
                                                                                                   ---------- ----------

Gross profit                                                                                           4,769      4,807
Selling, general and administrative expenses                                                           4,759      4,323
Corporate expenses                                                                                       845        748
                                                                                                   ---------- ----------

Loss from operations                                                                                    (835)      (264)
Net interest income (expense) and other                                                                   36         (1)
Minority interest in subsidiary                                                                          (11)       (10)
                                                                                                   ---------- ----------

Loss before income taxes                                                                                (810)      (275)
Benefit (provision) for income taxes                                                                     (23)        55
                                                                                                   ---------- ----------

Net loss                                                                                               $(833)     $(220)
                                                                                                   ========== ==========


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

Basic net loss per share, and net loss
     per share - assuming dilution                                                                    $(0.11)    $(0.03)
                                                                                                   ========== ==========

Weighted average shares outstanding - basic                                                        7,298,069  7,261,145
                                                                                                   ========== ==========

Weighted average shares outstanding - assuming dilution                                            7,298,069  7,261,145
                                                                                                   ========== ==========



See accompanying notes.
</TABLE>



                                       4
<PAGE>

                          First Aviation Services Inc.

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

<TABLE>
<CAPTION>


                                                                                                     Six months ended
                                                                                                         July 31,
                                                                                                      2004       2003
                                                                                                   ---------- ----------

<S>                                                                                                  <C>        <C>
Net sales                                                                                            $61,287    $50,883
Cost of sales                                                                                         50,906     41,201
                                                                                                   ---------- ----------

Gross profit                                                                                          10,381      9,682
Selling, general and administrative expenses                                                           9,749      8,589
Corporate expenses                                                                                     1,775      1,238
                                                                                                   ---------- ----------

Loss from operations                                                                                  (1,143)      (145)
Net interest income (expense) and other                                                                  (46)        89
Minority interest in subsidiary                                                                          (21)       (21)
                                                                                                   ---------- ----------

Loss before income taxes                                                                              (1,210)       (77)
Provision for income taxes                                                                               (33)       (22)
                                                                                                   ---------- ----------

Net loss                                                                                             $(1,243)      $(99)
                                                                                                   ========== ==========


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

Basic net loss per share, and net loss
     per share - assuming dilution                                                                    $(0.17)    $(0.01)
                                                                                                   ========== ==========

Weighted average shares outstanding - basic                                                        7,294,102  7,256,331
                                                                                                   ========== ==========

Weighted average shares outstanding - assuming dilution                                            7,294,102  7,256,331
                                                                                                   ========== ==========



See accompanying notes.
</TABLE>

                                       5
<PAGE>

                          First Aviation Services Inc.

           Consolidated Condensed Statements of Cash Flows (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                                       Six months ended
                                                                                                           July 31,
                                                                                                          2004     2003
                                                                                                       -------- --------
Cash flows from operating activities
<S>                                                                                                    <C>         <C>
Net loss                                                                                               $(1,243)    $(99)
Adjustments to reconcile net loss to net
     cash from operating activities - non-cash charges:
      Depreciation and amortization                                                                        455      606
      Compensation paid through issuance of stock                                                           90       60
(Increase) decrease in current assets:
      Trade receivables                                                                                 (2,533)   1,051
      Inventory                                                                                            430    1,090
      Prepaid and other                                                                                    207      (31)
Increase (decrease) in current liabilities:
      Accounts payable                                                                                     624     (690)
      Accrued compensation and related expenses, and other accrued liabilities                             517      (46)
      Income taxes payable                                                                                   6      (13)
                                                                                                       -------- --------

Net cash provided by (used in) operating activities                                                     (1,447)   1,928

Cash flows from investing activities
Purchases of plant and equipment                                                                          (415)    (187)
Proceeds from disposals of plant and equipment                                                               3        -
                                                                                                       -------- --------

Net cash used in investing activities                                                                     (412)    (187)

Cash flows from financing activities
Borrowings on revolving line of credit                                                                  27,150   29,000
Repayments on revolving line of credit                                                                 (27,150) (29,000)
Principal payments on capital lease obligations and other                                                    -       (2)
                                                                                                       -------- --------

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

Net increase (decrease) in cash and cash equivalents                                                    (1,859)   1,739

Effect of exchange rates on cash                                                                             3      130

Cash and cash equivalents at beginning of period                                                        25,144   26,013
                                                                                                       -------- --------

Cash and cash equivalents at end of period                                                             $23,288  $27,882
                                                                                                       ======== ========

Supplemental cash flow disclosures:
      Interest paid                                                                                        $19      $14
      Income taxes paid                                                                                    $41      $38


See accompanying notes.
</TABLE>


                                       6
<PAGE>

                          First Aviation Services Inc.

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

                                  July 31, 2004

1.  Basis of Presentation

First Aviation Services Inc. ("First Aviation"), together with its wholly
owned subsidiaries Aircraft Products International, Ltd. ("API Ltd.") and API
Asia Pacific Inc. ("API Asia Pacific"), and its majority-owned subsidiary,
Aerospace Products International, Inc. ("API"), (collectively, the "Company"),
is one of the premier suppliers of services to the aviation industry worldwide.
The services the Company provides the aviation industry include the sale of
aircraft parts and components, the provision of supply chain management
services, overhaul and repair services for brakes and starter/generators, and
the assembly of custom hoses. The Company's principal executive offices are
located at 15 Riverside Avenue, Westport, Connecticut 06880. 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 U.S 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 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, 2004 are not necessarily indicative of the results that may be
expected for the full fiscal year ending January 31, 2005. 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, 2004.


2.  Weighted Average Shares Outstanding - Assuming Dilution

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


                                                           Three months ended                  Six months ended
                                                                July 31,                           July 31,
                                                          2004             2003             2004              2003
                                                      -------------     ------------    -------------     -------------
   Denominator:
<S>                                                     <C>               <C>             <C>               <C>
     Denominator for basic net income (loss)
        per share - weighted average shares             7,298,069         7,261,145       7,294,102         7,256,331

     Effect of dilutive employee stock options                n/a               n/a             n/a               n/a
                                                      -------------     ------------    -------------     -------------

     Denominator for net income (loss) per
        share - assuming dilution, adjusted
           weighted average shares and assumed
           dilutions                                   7,298,069         7,261,145       7,294,102         7,256,331
                                                      =============     ============    =============     =============
</TABLE>

                                       7
<PAGE>


3.  Stock Options Issued to Employees

In lieu of cash, the Company's directors elect to receive their
compensation in the form of the Company's stock. The value of stock issued is
equivalent to the compensation expense, and the number of shares issued is based
upon the fair market value per share at the date issued. For the three months
ended July 31, 2004 and July 31, 2003, the Company issued 6,128 and 14,927
shares respectively, to directors in lieu of board fees. For the six months
ended July 31, 2004 and July 31, 2003, the Company issued 18,995 and 15,807
shares respectively, to directors in lieu of board fees.

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. No compensation expense was recognized during the
three and six months ending July 31, 2004 and 2003 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. 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.

The fair value of each option issued was estimated at the date of grant
using the following assumptions for the six months ended July 31 (all options
were issued during the three months ended April 30, 2004 and 2003):
<TABLE>
<CAPTION>

                                                           2004                 2003
                                                     -----------------     ---------------

<S>                                                       <C>                   <C>
        Expected dividend yield                           0.0%                  0.0%

        Risk-free interest rate                           3.6%                  2.0%

        Expected volatility                              31.9%                 37.8%

        Expected life of option                           5.0 years             5.0 years

        Weighted-average fair value of
           options granted                            $  1.56               $  0.99
</TABLE>

                                       8
<PAGE>




Using the above noted assumptions and the weighted-average fair value of
each option granted, the net income (loss) and earnings (loss) per share that
would have been recorded if the estimated fair value of options granted had been
recorded as an expense was:

<TABLE>
<CAPTION>

                                                              Three months ended               Six months ended
                                                                   July 31,                        July 31,
                                                            2004             2003            2004            2003
                                                         ------------    -------------    ------------    ------------

<S>                                                      <C>             <C>              <C>             <C>
Net income (loss) as reported                            $    (833)      $    (220)       $  (1,243)      $     (99)
Pro forma net compensation expense for issuance of
  stock options                                                  12              32               31              61
                                                         ------------    -------------    ------------    ------------

Pro forma net income (loss)                              $    (845)           (252)       $  (1,274)           (160)
                                                         ============    =============    ============    ============

Basic net income (loss) per share, and net income
(loss) per share - assuming dilution as reported
                                                         $   (0.11)      $   (0.03)       $   (0.17)      $   (0.01)

Pro forma basic net income (loss) per share, and
net income (loss) per share - assuming dilution
                                                         $   (0.12)      $   (0.03)       $   (0.17)      $   (0.02)
                                                         ============    =============    ============    ============
</TABLE>

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 in comprehensive income during the three and six
months ended July 31, 2004 was due to a decrease in the value of the U.S. dollar
relative to the Canadian dollar. Comprehensive income (loss) for the periods
shown was as follows:
<TABLE>
<CAPTION>

                                                         Three months ended                 Six months ended
                                                              July 31,                          July 31,
                                                        2004            2003             2004             2003
                                                     -----------    -------------     ------------    -------------

<S>                                                  <C>            <C>               <C>             <C>
Net income (loss) as reported                        $    (833)     $    (220)        $  (1,243)      $     (99)

Net impact of foreign currency
  translation adjustments - gain (loss)                      60             42                33             222
                                                     -----------    -------------     ------------    -------------

Net comprehensive income (loss)                      $    (773)     $    (178)        $  (1,210)      $      123
                                                     ===========    =============     ============    =============
</TABLE>


5.  Income Taxes

The Company recorded a provision for income taxes related to foreign income
tax expense estimates for operations in Canada and the Philippines. The Company
does not record a tax benefit for U.S. tax purposes on any operating losses
incurred due to the deferred tax valuation allowance recorded and the
uncertainty involving the future use of these tax benefits. If the Company did
not record the deferred tax valuation allowance, the effective income tax rate
(benefit) for the three and six months ended July 31, 2004 and 2003 would be
39%.


                                       9
<PAGE>


6.  Extension of Revolving Line of Credit

Effective July 31, 2004, API extended the maturity of its $20 million
Commercial Revolving Loan and Security Agreement to July 1, 2006, from July 1,
2005. 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.

7.  Related Parties

The Company and First Equity Development Inc. ("First Equity"), the
wholly-owned subsidiary of First Equity Group, Inc., the majority stockholder of
the Company, have an advisory agreement on a month-to-month basis effective
February 1, 2004. Pursuant to the terms of this agreement, First Equity provides
the Company with investment and financial advisory services relating to
potential acquisitions and other financial transactions. The agreement can be
terminated by either party upon 30 days written notice to the other party.
During each of the three and six month periods ended July 31, 2004 and 2003, the
Company paid First Equity retainer fees of $90 and $180, respectively and no
Success Fee.

The Company and First Equity have entered into an arrangement whereby First
Equity provides the Company with various additional services to assist the
Company. These services are not part of the advisory agreement, described above,
but derive from the work First Equity performs under the agreement. Therefore,
First Equity does not charge the Company additional fees in connection with the
provision of such services. These services include (i) detailed financial
modeling for new business proposals, (ii) Board of Directors presentation
analysis, (iii) investor relations marketing and presentations, (iv) various
analysis for API, including benchmarking, financial analysis, and competitive
market analyses, and (v) other financial analyses for the Company, including
stock buy-back, valuations, and capital structure analyses. The Company's CEO
and CFO have unlimited access to these resources when requested.

The Company subleases from First Equity approximately 3,000 square feet of
office space in Westport, Connecticut. The leased space is utilized by the
Company as its corporate headquarters. First Equity also utilizes space in the
same premises. The sublease, which became effective April 21, 1997, is for a
period of ten years, and is cancelable by either party with six months notice.
The Company has the option to renew the sublease for two additional five-year
periods. Lease payments under this sublease totaled approximately $20, for the
three months ended July 31, 2004, and 2003, while payments for the six months
ended July 31, 2004 and 2003 were $40.

The Company and First Equity share certain common expenses that arise from
sharing office space in Westport, CT. The amounts are included in the Company's
corporate expenses, and include expenses such as telephone, computer consulting,
office cleaning, office supplies and utilities. The allocations are reviewed by
the Company's CFO and the Controller of First Equity each month. In addition, a
member of the Company's audit committee reviews the allocation of expenses
quarterly. In addition, the amounts reimbursed by the Company are the actual
costs incurred for the expense. The Company reimbursed First Equity, $16, for
the three months ended July 31, 2004, and 2003, and $26 and $31, for the six
months ended July 31, 2004 and 2003, respectively.

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 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

                                       10
<PAGE>

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, 2004. We disclaim 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

First Aviation Services Inc. ("First Aviation"), together with its wholly
owned subsidiaries, Aircraft Parts International, Ltd. ("API Ltd."), and API
Asia Pacific Inc. ("API Asia Pacific"), and its majority-owned subsidiary,
Aerospace Products International, Inc. ("API"), (collectively, the "Company"),
is one of the premier suppliers of services to the aviation industry worldwide.
The services the Company provides the aviation industry include the sale of
aircraft parts and components, the provision of supply chain management
services, overhaul and repair services for brakes and starter/generators, and
the assembly of custom hoses.

The Company's principal executive offices are located at 15 Riverside
Avenue in Westport, Connecticut 06880. Certain filings that First Aviation makes
with the U.S. Securities and Exchange Commission are available on First
Aviation's corporate website at www.favs.com. These public filings also can be
obtained by calling our investor relations department, or by e-mail at
first@firstaviation.com.

Critical Accounting Policies

There have been no significant changes in those accounting policies, other
than mentioned below, 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, 2004.

During the three months ended July 31, 2004, as a result of normal review
procedures the Company adjusted the methodology for estimating the Allowance for
Slow Moving and Obsolete Inventory that makes the estimate more objective, and
efficient to calculate, by applying percentages based on historical experiences
of inventory in various age classifications, and eliminating the practice of
making adjustments based on historical and projected sales, or other inventory
movements due to new product lines and product return allowances. See Cost of
Sales, below.

Results of Operations

Net Sales

The Company's net sales consist of sales of services to the aviation
industry, including parts and components supply services, 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.

Net sales for the three months ended July 31, 2004 increased $5.8 million,
or 22.9%, to $31.1 million from $25.3 million for the three months ended July
31, 2003. During the three months ended July 31, 2004, net sales increased in


                                       11
<PAGE>

all of the customer sectors the Company serves, compared to the comparable
period of the prior year, with airline, independent airline maintenance, repair
and overhaul facilities, and general aviation largely contributing to the
increase. The sales increases were partially offset by a charge against revenues
of $269,000, representing a price adjustment the Company gave to a large
customer, as settlement for a contract dispute. The sales increases are
attributable to a recovery in global air traffic in the latter half of 2003 and
2004 from depressed levels, as well as an improving overall economy, leading to
increases in maintenance and repairs, and the corresponding parts and services
the Company provides. Sales to airlines, while rebounding from previously low
levels, are still affected by difficult industry conditions, including continued
additional security measures, requiring the Company to cautiously maintain
restrictive credit policies that especially affect the commercial airline
sector.

Net sales for the six months ended July 31, 2004 increased $10.4 million,
or 20.5%, to $61.3 million from $50.9 million for the six months ended July 31,
2003. The reasons for the increase in net sales for the six months ended July
31, 2004, compared to the comparable period of the prior year, was due to the
same reasons described above, in addition to the increase in sales for the three
months ended April 30, 2004.

Sales to Original Equipment Manufacturers (OEM's) for the three and six
month periods ended July 31, 2004 increased over the three and six month periods
ended July 31, 2003, as the Company added marginally to its existing customer
sales.

Sales increased, on both a three and six months basis, in all the
geographic regions the Company serves. Sales in Canada for the three and six
months ended July 31, 2004, improved primarily in the general aviation customer
sector, over the six month period ended July 31, 2003. Sales in Asia improved
for the three and six months ended July 31, 2004 over the similar periods ended
July 31, 2003. Increases in general aviation and airlines sales, resulted
primarily due to improving market conditions for general aviation, and more
airline activity in the Asia region, than existed in the prior year period.
Sales in Europe for the three month period ended July 31, 2004 improved in the
customer sector for airlines, compared to the three month period ended July 31,
2003. Sales in Europe for the six month period ended July 31, 2004 increased in
customer sectors for general aviation and large corporate maintenance, repair
and overhaul, over the prior year period. The Company's sales in the Latin
America region also increased in the airline customer sector for both the three
and six month periods ended July 31, 2004 over the same periods ended July 31,
2003. The Company continues to be cautious with respect to providing credit to
customers in the Latin American region, and this has a negative impact on sales.

Freight revenue is a component of net sales and represents freight billed
to customers. Freight revenue for the three and six months ended July 31, 2004
decreased 18.2%, to $512,000 from $626,000 for the prior year three month period
ended July 31, 2003, and decreased 7.6%, to $1.1 million from $1.2 million for
the comparable six month period. This decrease was primarily due to increases in
customer incentives resulting from promotional activities and industry
competition.

Cost of Sales

Cost of sales consists of costs of inventory sold, direct costs to overhaul
and repair parts and components, and direct costs of providing services. Freight
costs for parts and components sold are also included in cost of sales.

Cost of sales for the three months ended July 31, 2004 increased $5.8
million, or 28.5%, to $26.3 million from $20.5 million for the three months
ended July 31, 2003. During the three month period ended July 31, 2004, the
Company added $300,000 to inventory reserves, increasing cost of sales for the
period. This increase in inventory reserves was a change in the Company's
estimate due to a change in the reserve methodology as a result of a normal
review procedure, as discussed in the section on Critical Accounting Policies.
Cost of sales for the six months ended July 31, 2004 increased $9.7 million, or
23.6%, to $50.9 million from $41.2 million in the prior year period ended July
31, 2003. Apart from these items, cost of sales for the three and six months
ended July 31, 2004 increased compared to the prior year principally due to the
increase in net sales, and an increase in freight expense for products delivered
to customers.

As a percentage of net sales, cost of sales increased for the periods ended
July 31, 2004, to 84.7% from 81.0%, and 83.1% from 81.0%, for the three and six
months, respectively, over the three and six month periods ended July 31, 2003.
The increase in the percentage of cost of sales compared to net sales for the
three and six months ended July 31, 2004 compared to the three and six months
ended July 31, 2003, was due to the reasons described above, and higher growth
in sales of products and components supply services versus supply chain
management services contracts, the latter representing a larger share of the mix
in the prior year period versus the current year period.

                                       12
<PAGE>

Gross Profit

Gross profit for the three months ended July 31, 2004 of $4.8 million was
flat compared to gross profit for the three months ended July 31, 2003. With the
increase in sales in the current year quarter versus the prior year quarter,
gross profit as a percentage of net sales decreased to 15.3% for the three
months ended July 31, 2004, from 19.0% for the three months ended July 31, 2003,
due to the period charges described above in the discussion of cost of sales for
an increase in the inventory reserve, as well as an increase in the mix in sales
of parts and components supply services which have a lower gross profit margin
relative to supply chain management services contracts.

Gross profit for the six months ended July 31, 2004 of $10.4 million was
increased by $700,000, or 7.2% compared to gross profit for the six months
ended July 31, 2003. Gross profit as a percentage of net sales decreased to
16.9% for the six months ended July 31, 2004, from 19.0% for the six months
ended July 31, 2003. Gross profit margin for the six months ended July 31, 2004
decreased compared to the comparable period of the prior year principally due to
the accrual for an increase in the inventory reserves, as mentioned above in
cost of sales, as well as an increase in the mix in sales of parts and
components supply services which have a lower gross profit margin relative to
supply chain management services contracts.

Gross profit is also impacted by net freight expense, which represents
freight expense recorded in cost of sales, less freight billed to customers in
net sales. Net freight expense decreased gross profit by 6.4% and 4.9%,
respectively for the three and six months ended July 31, 2004, compared to
decreases of 3.2% and 2.9% respectively in the comparable 2003 periods. These
decreases were due primarily to increased customer incentives from promotional
activities offering customers reduced freight on shipments.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended
July 31, 2004 increased $0.4 million, or 10.1% to $4.8 million from $4.3 million
for the three months ended July 31, 2003. The increases for the three months
ended July 31, 2004, over the comparable prior year periods, is due to increases
in salaries and payroll costs related to increases in sales personnel, higher
sales commissions, expiration of property tax incentives, and increased legal
costs associated with general legal matters and an ongoing lawsuit. Other
items contributing to the increase in expenses for the three months ended July
31, 2004 over the prior year period, include a settlement of a lawsuit
requiring the Company to make an accrual for $73,000, as well as sales related
travel expenses, and relocation expenses for new personnel, which were offset by
a $261,000 credit to bad debt expense from a reduction in the reserves for
accounts receivable. The reduction in the accounts receivable reserves, that
resulted during normal review procedures, was due to a change in the Company's
estimate for bad debt resulting from changes in estimated collections based on
improving customer payment trends, and the overall improving economy.

Selling, general and administrative expenses for the six months ended July
31, 2004 of $9.7 million increased $1.2 million, or 13.5% from $8.6 million in
the prior year period. The increases for the six months ended July 31, 2004,
over the comparable periods of the prior year, is due to the reasons described
above, and expenses incurred for the implementation of a new customer initiative
requiring additional temporary warehouse personnel.

Corporate Expenses

Corporate expenses for the three months ended July 31, 2004 increased
$97,000, or 13.0%, to $845,000, from the $748,000 incurred during the three
months ended July 31, 2003. For the three months ended July 31, 2004 over the
prior year quarter, the Company incurred an additional $116,000 in legal
expenses related to updating our corporate governance policies under new SEC and
NASDAQ exchange rules, activities in connection with a proxy contest, and for
the 2004 annual meeting. Other increases in the current year quarter ended July
31, 2004 over the prior year quarter ended July 31, 2003 related to insurance,
travel expense, and consulting services related to changes in management, which
were offset by lower expenses in other categories.

Corporate expenses for the six months ended July 31, 2004 increased
$537,000, or 43.4%, to $1.8 million, from the $1.2 million incurred during the
six months ended July 31, 2003. For the six months ended July 31, 2004 versus



                                       13
<PAGE>

the prior year, the Company incurred an additional $324,000 in legal expenses
related to updating our corporate governance policies under new SEC and NASDAQ
exchange rules, responding to a dissident shareholder's proposal, activities in
connection with a proxy contest, and for the 2004 annual meeting. Other
increases in the six months ended July 31, 2004 versus the six months ended July
31, 2003 related to salary and payroll expenses, travel expenses, insurance
charges, and consulting services related to changes in management, which were
partially offset by lower expenses in other categories.

Net Interest Income (Expense) and Other

During the three months ended July 31, 2004, interest income from investing the
Company's cash in short term investments, increased by $4,000 to $12,000 in the
current year quarter due to a balance adjustment made in the prior year period.
Other income increased $37,000 in the three months ended July 31, 2004, as a
result of a gain on foreign currency transactions in the quarter, due primarily
to a strengthening Canadian dollar that is used as the functional currency of
the Canadian subsidiary. Interest expense for the three months ended July 31,
2004 was $13,000 or $10,000 higher than the amounts recorded in the three months
ended July 31, 2003.

During the six months ended July 31, 2004, interest income from investing the
Company's cash in short term investments, decreased by $67,000 to $22,000 in the
current year over the comparable prior year period. The decrease was due in part
to an adjustment to invested cash equivalent balances in the year ended July 31,
2003. In addition, the decrease was also due to lower cash balances to invest,
lower interest rates, and a revised investment strategy minimizing market risk
for the current year ended July 31, 2004 over the six month period ended July
31, 2003. Other expense increased $55,000 in the six months ended July 31, 2004,
as a gain on foreign currency exchange of $20,000, in the six months ended July
31, 2003, moved to a loss on foreign currency exchange of $39,000, due primarily
to a weakening Canadian dollar that is used as the functional currency of the
Canadian subsidiary. Interest expense for the six months ended July 31, 2004
increased by $13,000 in the current six month period versus the prior year
period.

Provision for Income Taxes

The Company recorded a provision for income taxes related to foreign income
tax expense estimates for operations in Canada and the Philippines. The Company
does not record a tax benefit for U.S. tax purposes on any operating losses
incurred due to the deferred tax valuation allowance recorded and the
uncertainty involving the future use of these tax benefits.

If the Company did not record the deferred tax valuation allowance, the
effective income tax rate (benefit) for the three and six months ended July 31,
2004 would be 39.0%. Management will evaluate the Company's income tax position
as the year progresses and expects to adjust the rate as necessary.

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

The Company had a net loss of ($0.8) million, or $(0.11) per share for the
three months ended July 31, 2004, compared to a net loss of ($0.2) million, or
($0.03) per share for the three months ended July 31, 2003 and a net loss of
($1.2) million, or $(0.17) per share for the six months ended July 31, 2004,
compared to a net loss of ($99,000), or ($0.01) per share for the comparable
prior year period ended July 31, 2003. The increase in net loss 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. 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, 2004 the Company used $1.4 million in
cash for operating activities, compared to $1.9 million cash provided by
operating activities for the six months ended July 31, 2003. The use of cash in
the six months ended July 31, 2004 versus the cash generated in the prior year



                                       14
<PAGE>

six month period was due to the net loss for the period, an increase in
receivables on the increase in sales for the six months ended July 31, 2004,
partially offset by increases in cash due to inventory reductions during the
current year as inventory levels were reduced to more optimal operating levels,
and increases in accounts payable and accrued expenses due to the increased
sales activity in the current year. The Company continues to focus on managing
its overall working capital. Cash used in investing activities was $0.4 million
and $0.2 million during the six months ended July 31, 2004 and 2003,
respectively, due primarily to purchases of plant and equipment. The Company
expects that its aggregate capital expenditure requirements for the year ending
January 31, 2005 will range from approximately $0.9 million to $1.0 million.
Management expects to fund these requirements from cash on hand, cash flows from
operations, and from borrowings. Net cash used in financing activities during
the six months ended July 31, 2004 was nil, comparable to the financing activity
for the six months ended July 31, 2003. API has a $20 million revolving line of
credit through a Commercial Revolving Loan and Security Agreement (the
"Facility"). Borrowings under this Facility bear interest equal to LIBOR 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. At July 31, 2004, borrowings under
the Facility totaled $14.5 million, at an interest rate of approximately 2.9%.
This amount represented a draw on the Facility just prior to July 31, 2004, and
shortly after the quarter end, the Company repaid all of the borrowings that
were outstanding at quarter-end. The Company regularly draws down on the
Facility just prior to quarter end, holds this cash, and then repays the amount
drawn shortly after the quarter end. The purpose of these draw downs is to
indicate that the Company has access to cash for potential acquisitions or other
investment opportunities that may arise. Approximately $3.0 million was
available under the Facility at July 31, 2004. The Facility was scheduled to
expire July 1, 2005, however, effective July 31, 2004, the Facility was extended
to July 1, 2006, on substantially the same terms and conditions, therefore,
borrowings under the Facility are classified as long term. Management believes
that the carrying amount of the Company's borrowings approximates fair market
value because the interest rate is variable and resets frequently.

On January 6, 2003, the Company announced that its Board of Directors, in
light of the Company's cash position, had approved a special cash dividend of
$1.00 per share. The dividend was paid on January 30, 2003. The total paid to
the stockholders was $7.3 million. The Company previously had 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.

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.

                                       15
<PAGE>

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

As of July 31, 2004, there have been no material changes outside the ordinary
course of the Company's business in the Company's specified contractual
obligations disclosed in the Company's Annual Report on Form 10-K for the year
ended January 31, 2004.


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
principally arises from the transfer of foreign currency to and/or from U.S.
dollars from one subsidiary to another within the Company, 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, and gains or losses will increase in significance with the
growth of the Canadian operations. Unrealized currency translation gains and
losses resulting from the translation of foreign subsidiaries balance sheets to
U.S. dollars are not recorded as income or expense, but are recognized in the
Balance Sheet as other comprehensive income or loss as a component of
Stockholder's Equity. The Company does have risk principally relating to the
translation of accounts in which the Canadian dollar is the functional currency.
During the three months ended July 31, 2004, the Company experienced a
comprehensive gain of $60,000, due to an increase in the value of the Canadian
dollar relative to the U.S. dollar. During the six months ended July 31, 2004
the Company experienced a comprehensive gain of $33,000, due to an increase in
the value of the Canadian dollar relative to the U.S. dollar.

Borrowings of the Company are denominated in U.S. dollars. Management
believes that the carrying amount of the Company's borrowings approximates fair
value because the interest rates are variable and reset frequently.


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, 2004. 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, 2004.

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, 2004, that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                                       16
<PAGE>

                           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.

The Company previously disclosed a lawsuit, filed on June 28, 2000, by BE
Aerospace (formerly known as SMR Technologies, Inc.), as plaintiff, against API
in the U.S. District Court for the Western District of Tennessee, Western
Division at Memphis, alleging breach of a distribution agreement. This lawsuit
was dismissed in March 2004 for lack of subject matter jurisdiction. The
plaintiff filed for breach of contract on June 28, 2000 and was awarded partial
summary judgment in the amount of $77,000 plus interest, totaling approximately
$94,000. The plaintiff was then granted permission in April 2003 to amend its
pleadings for damages to sue for approximately $13.1 million. In March 2004, the
entire lawsuit was dismissed, and API subsequently filed a motion to recover its
costs. On June 2, 2004, the plaintiff re-filed its lawsuit in the Circuit Court
of Tennessee for Shelby County, Tennessee, against API, claiming unspecified
damages for breach of a distribution agreement, and $77,295 for parts delivered
to API, plus interest.

In July 2004, the Company agreed to settle the lawsuit with BE Aerospace
for $150,000, including the $77,295 for parts delivered to API that were not
paid for by API during the dispute, plus interest.


Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of
----------------------------------------------------------------------
Equity Securities
-----------------

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 15, 2004, in
Memphis, Tennessee, for the purpose of (i) electing two Class II Directors for a
term to expire at the Annual Meeting of Stockholders in the year 2007, (ii)
ratifying the appointment of Ernst & Young LLP, as independent auditors for the
year ending January 31, 2005 and (iii) to vote on the stockholder proposal
regarding cumulative voting for director elections. Proxies were solicited from
holders of 7,296,960 outstanding shares of Common Stock as of the close of
business on May 11, 2004, as described in the Company's Definitive Proxy
Statement dated May 17, 2004. The Inspectors of Election, IVS Associates Inc.,
certified the election results for the Annual Meeting. Michael C. Culver and
Robert L. Kirk, both of management's nominees for directors, were elected, the
appointment of Ernst & Young LLP was ratified, and the stockholder proposal
regarding cumulative voting for director elections was defeated by the following
votes:

          (1)  To elect two directors for a three-year term to expire at the
               Annual Meeting of Shareholders in the year 2007.

                                       17
<PAGE>
<TABLE>
<CAPTION>

                                               Votes               Votes                  Broker
              Name                              FOR               WITHHELD               Non-votes
              ----                              ---               --------               ---------

<S>                                          <C>                      <C>                      <C>
              Michael C. Culver              4,024,877                127,481                 -0-
              Robert L. Kirk                 4,024,591                127,767                 -0-
              Nelson Obus                    2,604,347                  2,000                 -0-
</TABLE>

              Aaron P. Hollander, Stanley J. Hill, and Joseph J. Lohta continue
              to serve as directors of the Company after the Annual Meeting of
              Stockholders.

          (2)  To ratify the appointment of Ernst & Young LLP as the Company's
               independent auditors for the fiscal year ending January 31, 2005.
<TABLE>
<CAPTION>

                          Votes                   Votes              Votes                 Broker
                           FOR                   AGAINST           ABSTAINED             Non-votes
                           ---                   -------           ---------             ---------

<S>                       <C>                       <C>                  <C>                  <C>
                          6,639,605                 117,300              1,800               -0-
</TABLE>

          (3)  To approve the shareholder proposal regarding cumulative voting
               for director elections.
<TABLE>
<CAPTION>

                          Votes                   Votes             Votes                Broker
                           FOR                   AGAINST           ABSTAINED             Non-votes
                           ---                   -------           ---------             ---------

<S>                       <C>                  <C>                     <C>                  <C>
                          2,699,189            3,953,833               105,683             -0-
</TABLE>

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

NONE

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

     10.28 Sixth Amendment to Commercial Revolving Loan and Security Agreement
           dated as of July 31, 2004, between Hudson United Bank and Aerospace
           Products International Inc.

     10.29 Sixth Reaffirmation of Guaranty dated as of July 31, 2004, by First
           Aviation Services Inc. and in favor of Hudson United Bank.

     10.30 Amendment dated May 14, 2004 to the Relocation Agreement dated
           February  16, 2004 between Aerospace Products International Inc.
           and Paul J. Fanelli.

     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.

      NONE


                                       18
<PAGE>




                                   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 14, 2004            /s/ Michael C. Culver
                                    --------------------------------------------
                                    Michael C. Culver,
                                    President, Chief Executive Officer and
                                    Director (Principal Executive Officer)


Date: September 14, 2004            /s/ Robert G. Costantini
                                    --------------------------------------------
                                    Robert G. Costantini,
                                    Chief Financial Officer (Principal Financial
                                    and Accounting Officer)


                                       19
<PAGE>


                                INDEX TO EXHIBITS


Exhibit No.                                 Description
-----------                                 -----------

     10.31 Sixth Amendment to Commercial Revolving Loan and Security Agreement
           dated as of July 31, 2004, between Hudson United Bank and Aerospace
           Products International Inc.

     10.32 Sixth Reaffirmation of Guaranty dated as of July 31, 2004, by First
           Aviation Services Inc. and in favor of Hudson United Bank.

     10.33 Amendment dated May 14, 2004 to the Relocation Agreement dated
           February 16, 2004 between Aerospace Products International Inc.
           and Paul J. Fanelli.

     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).


                                       20