Incorporated in the State of Washington		IRS Employer Identification
		Number 91-1273737

Class		Number of Shares Outstanding
Common Stock		12,233,451

				Page
PART 1—		FINANCIAL INFORMATION		2
Item 1.		Unaudited Condensed Consolidated Financial Statements		2
		Unaudited Condensed Consolidated Balance Sheets as of September 30, 2002 and June 30, 2002		2
		Unaudited Condensed Consolidated Statements of Operations for the three months ended September 30, 2002 and 2001		3
		Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2002 and 2001		4
		Notes to Unaudited Condensed Consolidated Financial Statements		5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.		Quantitative and Qualitative Disclosure about Market Risk		13
Item 4		Controls and Procedures		13
PART II—		OTHER INFORMATION
Item 1.		Legal Proceedings		14
Item 6.		Exhibits and Reports on Form 8-K		14

		September 30, 2002 (unaudited)				June 30, 2002
		(In thousands, except share data)
ASSETS
Cash and cash equivalents		$	574			$	2,694
Accounts receivable, net			14,610				13,802
Prepaid expenses and other current assets			908				464
Total current assets			16,092				16,960
Property, plant, and equipment, net of accumulated depreciation and amortization of $77,324 and $74,307, respectively			172,793				175,851
Goodwill, net of accumulated amortization of $4,553 and $4,553, respectively			20,294				20,294
Investment in Guigne, net			1,800				1,800
Other assets, net			6,343				5,921
Total assets		$	217,322			$	220,826
LIABILITIES AND STOCKHOLDERS’ EQUITY
Loans payable, current portion		$	169			$	169
Revolving loan payable			730				2,150
Accounts payable & accrued expenses			15,900				14,349
Accrued subcontracting services			2,827				3,043
Convertible notes payable to stockholder			2,577				1,827
Mortgage loan payable			2,082				2,039
Deferred revenue			13,012				15,405
Total current liabilities			37,297				38,982
Loans payable, net of current portion			6				49
Accrued expenses			552				438
Convertible notes payable to stockholder			677				2,039
Deferred revenue			9,616				9,560
Convertible subordinated notes payable			63,250				63,250
Mortgage loan payable			16,540				17,078
Other long term liability			1,843				1,010
Total liabilities			129,781				132,406
Commitments and contingencies
Minority interest in consolidated subsidiary			750				750
Stockholders’ equity
Preferred Stock, authorized 2,500,000 shares, issued and outstanding 1,333,334 shares			11,892				11,892
Common stock, no par value, authorized 30,000,000 shares, issued and outstanding 12,233,451 and 11,832,096 shares, respectively			83,254				83,204
Additional paid-in capital			16				16
Accumulated other comprehensive loss			(1,843	)			(1,010	)
Accumulated deficit			(6,528	)			(6,432	)
Total stockholders’ equity			86,791				87,670
Total liabilities and stockholders’ equity		$	217,322			$	220,826

		Three Months Ended September 30,
		2002				2001
		(In thousands, except share data)
Revenue		$	26,812			$	22,292
Costs of revenue			21,634				19,866
Gross profit			5,178				2,426
Operating expenses
Selling, general and administrative			3,414				4,936
Research and development			14				18
Total operating expenses			3,428				4,954
Income (loss) from operations			1,750				(2,528	)
Interest expense, net of capitalized interest			(1,859	)			(1,435	)
Interest and other income, net			9				1,141
Loss before income taxes			(100	)			(2,822	)
Income tax benefit (expense)			6				(28	)
Net loss		$	(94	)		$	(2,850	)
Loss per share
Net loss per share—basic and diluted		$	(0.01	)		$	(0.24	)
Shares used in computing net loss per share—basic and diluted			12,154,465				11,647,709

		Three Months Ended September 30,
		2002				2001
		(In thousands)
Operating activities
Net loss		$	(94	)		$	(2,850	)
Adjustments to reconcile net loss to net cash provided by operating activities
Gain on sale of property and equipment			—				(1,096	)
Depreciation and amortization			3,141				3,427
Changes in assets and liabilities
(Increase) in accounts receivable			(808	)			(2,375	)
(Increase) in prepaid expenses and other current assets			(445	)			(276	)
(Increase) in other assets			(550	)			(28	)
(Decrease) increase in deferred flight revenue			(2,111	)			3,563
Increase (decrease) in accounts payable and accrued expenses			1,479				(693	)
(Decrease) increase in accrued subcontracting services			(216	)			600
Net cash provided by operating activities			396				272
Investing activities
Payments for flight assets under construction			(109	)			(971	)
Payments for building under construction			—				(5,868	)
Purchases of property, equipment and leasehold improvements			(11	)			(36	)
Proceeds received from sale of property and equipment			125				583
Decrease in restricted cash			549				—
Net cash provided by (used for) investing activities			554				(6,292	)
Financing activities
Payment of loan payable			(42	)			(3,861	)
Payment of note payable under credit agreement			—				(333	)
Proceeds from issuance of common stock			47				349
Repayment of revolving loan payable, net			(1,420	)			(922	)
Proceeds from mortgage loan			—				11,719
Repayment of mortgage loan			(494	)			—
Payment of note payable to stockholder			(612	)			—
Proceeds from sale of minority interest in consolidated subsidiary			—				750
Net cash (used for) provided by financing activities			(2,521	)			7,702
Net change in cash and cash equivalents			(1,571	)			1,682
Cash and cash equivalents at beginning of period			2,145				34
Cash and cash equivalents at end of period		$	574			$	1,716