DELAWARE		94-1358276
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification Number)

				Page
PART I —		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Condensed Balance Sheets, September 30, 2002 (Unaudited) and December 31, 2001		3
		Condensed Statements of Operations (Unaudited), Three Months Ended September 30, 2002 and 2001		5
		Condensed Statements of Operations (Unaudited), Nine Months Ended September 30, 2002 and 2001		6
		Condensed Statement of Changes in Stockholders’ Deficiency (Unaudited), Nine months ended September 30, 2002		7
		Condensed Statements of Cash Flows (Unaudited), Nine months ended September 30, 2002 and 2001		8
		Notes to Condensed Financial Statements		9
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.		12
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		16
Item 4.		Controls and Procedures		16
PART II —		OTHER INFORMATION
Item 5.		Submission of Matters to a Vote of Securities Holders		16
Item 6.		Exhibits and Reports on Form 8-K		16

		September 30, 2002			December 31, 2001
		(unaudited)
CURRENT ASSETS
Cash and cash equivalents, including restricted cash of $784 at September 30, 2002 and $662 at December 31, 2001		$	28,762		$	19,540
Accounts receivable, less allowance for doubtful accounts of $1,066 at September 30, 2002 and $1,350 at December 31, 2001			28,518			25,219
Prepaid expenses and other current assets			6,278			5,641
Total current assets			63,558			50,400
EQUIPMENT AND PROPERTY
Flight and other equipment			75,236			74,292
Equipment under capital leases			9,463			9,463
			84,699			83,755
Less: accumulated depreciation and amortization			44,535			41,223
Net equipment and property			40,164			42,532
LONG-TERM OPERATING DEPOSITS			18,861			18,777
OTHER ASSETS AND DEFERRED CHARGES, NET			729			520
TOTAL ASSETS		$	123,312		$	112,229

		September 30,				December 31,
		2002				2001
		(unaudited)
CURRENT LIABILITIES
Notes payable		$	10,231			$	19,756
Current maturities of long-term obligations			749				1,787
Accounts payable			33,705				30,527
Accrued rent			22,307				11,362
Unearned revenue			1,202				3,400
Accrued maintenance			2,647				1,543
Accrued salaries and wages			9,153				7,850
Accrued taxes			3,234				3,158
Other accrued liabilities			314				1,090
Total current liabilities			83,542				80,473
LONG-TERM OBLIGATIONS, NET OF CURRENT MATURITIES			40,545				40,853
OTHER LIABILITIES
Deferred gain from sale-leaseback transactions, net of accumulated amortization of $13,574 at September 30, 2002 and $11,966 at December 31, 2001			4,488				6,096
Accrued post-retirement benefits			2,929				2,861
Deferred rent			13,931				13,050
Total other liabilities			21,348				22,007
TOTAL LIABILITIES			145,435				143,333
STOCKHOLDERS’ DEFICIENCY
Preferred stock, $.001 par value (5,000,000 shares authorized;
no shares issued or outstanding)			—				—
Common stock, $.001 par value (100,000,000 shares authorized;
12,158,341 shares issued; 11,077,098 shares outstanding at September 30,
2002 and 11,065,898 shares outstanding at December 31, 2001)			12				12
Additional paid-in capital			24,314				24,165
Accumulated deficit			(33,592	)			(42,424	)
Treasury stock, at cost (1,081,243 shares at September 30, 2002 and
December 31, 2001)			(12,857	)			(12,857	)
Total stockholders’ deficiency			(22,123	)			(31,104	)
COMMITMENTS AND CONTINGENCIES
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		$	123,312			$	112,229

OPERATING REVENUES		2002				2001
Flight operations		$	107,273			$	84,898
Other			650				289
Total operating revenues			107,923				85,187
OPERATING EXPENSES
Flight			34,483				29,247
Maintenance			17,086				12,483
Aircraft costs			22,598				19,932
Fuel			17,738				11,829
Flight operations subcontracted to other carriers			188				—
Commissions			4,085				3,348
Depreciation and amortization			1,132				1,196
Sales, general and administrative			7,840				8,842
Total operating expenses			105,150				86,877
OPERATING INCOME (LOSS)			2,773				(1,690	)
OTHER INCOME (EXPENSE)
Interest expense			(1,097	)			(1,206	)
Interest income			159				94
Other, net			49				487
Total other expense			(889	)			(625	)
NET EARNINGS (LOSS)		$	1,884			$	(2,315	)
BASIC EARNINGS (LOSS) PER SHARE
Net earnings (loss)		$	0.17			$	(0.21	)
Weighted average shares outstanding			11,077				10,920
DILUTED EARNINGS (LOSS) PER SHARE
Net earnings (loss)		$	0.17			$	(0.21	)
Weighted average shares outstanding			15,767				10,920

		2002				2001
OPERATING REVENUES
Flight operations		$	282,817			$	234,824
Other			1,544				711
Total operating revenues			284,361				235,535
OPERATING EXPENSES
Flight			86,257				78,788
Maintenance			38,855				45,212
Aircraft costs			64,649				56,694
Fuel			43,103				29,568
Flight operations subcontracted to other carriers			924				924
Commissions			12,343				10,955
Depreciation and amortization			3,506				4,730
Sales, general and administrative			22,619				26,133
Total operating expenses			272,256				253,004
OPERATING INCOME (LOSS)			12,105				(17,469	)
OTHER INCOME (EXPENSE)
Interest expense			(3,439	)			(4,748	)
Interest income			435				380
Other, net			(269	)			185
Total other expense			(3,273	)			(4,183	)
NET EARNINGS (LOSS)		$	8,832			$	(21,652	)