SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                           --------------------------



                                    FORM 8-K

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

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)   DECEMBER 17, 1998   

                             AVIATION SALES COMPANY
--------------------------------------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

        DELAWARE                         1-11775                65-0665658
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION           (COMMISSION             (IRS EMPLOYER
OF INCORPORATION)                      FILE NUMBER)          IDENTIFICATION NO.)

                      6905 NW 25TH STREET, MIAMI, FL       33122
--------------------------------------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE      (305) 592-4055  

                                       N/A
--------------------------------------------------------------------------------
          (FORMER NAME OR FORMER ADDRESS; IF CHANGED SINCE LAST REPORT)

                               Page 1 of 9 pages.


<PAGE>



ITEM 5.           OTHER EVENTS.

GROUND BREAKING FOR NEW CORPORATE HEADQUARTERS AND CENTRAL WAREHOUSE FACILITY

         On January 4, 1999, the ground breaking for the construction of the
Company's new corporate headquarters and warehouse facility (the "New Facility")
took place. The New Facility, which will be located on a 41 acre parcel in the
City of Miramar, Florida, will contain approximately 630,000 square feet of
space and consist of two buildings. One building, which will contain
approximately 545,000 square feet, will consolidate the operations of the
Company's aircraft spare parts redistribution business, as well as serve as the
corporate headquarters for the Company's distribution services, maintenance,
repair and overhaul ("MR&O"), leasing and manufacturing businesses. The other
building, which will contain approximately 85,000 square feet, will be used as
office and warehouse space by the Company's subsidiary, Caribe Aviation, Inc.

DEVELOPMENT AND LEASING OF THE NEW FACILITY

         On December 17, 1998, the Company entered into a tax retention
operating lease for the New Facility (the "Lease") with First Security Bank,
National Association, as trustee (the "Trustee") of the Aviation Sales Trust
1998-1 (the "Trust"), as lessor. The Lease has an initial term of five years and
is a triple net lease with annual rent as provided in the Lease. The Lease
contains certain financial covenants regarding the financial performance of the
Company and certain other affirmative and negative covenants which the Company
will be obligated to comply with during the term of the Lease. Substantially all
of the Company's subsidiaries have guaranteed the Company's obligations under
the Lease. Additionally, the Company has an option to acquire the New Facility
at the end of the Lease for an option price as determined in the Lease.
Alternatively, if the Company does not purchase the New Facility at the end of
the Lease, the Company will be obligated to pay certain amounts as provided in
the Lease.

         The development of the New Facility has been financed through a $34.4
million operating lease facility provided by a syndicate of financial
institutions (the "TROL Financing"). Pursuant to the TROL Financing documents,
the Company is obligated to develop the New Facility on behalf of the Trust and
is responsible for the timely completion thereof within an established
construction budget. The Company and substantially all of its subsidiaries have
guaranteed the repayment of $31.2 million of the Trustee's obligations under a
credit agreement with certain lenders (the "Credit Agreement"). The Trust's
obligations under the Credit Agreement are secured by a lien on the real
property and improvements comprising the New Facility and on the fixtures
therein. Further, the Company has posted an irrevocable letter of credit in
favor of the Trustee in the amount of approximately $8.0 million to secure
both the Company's obligations under the Lease and the Trustee's obligations
under the Credit Agreement.

         The foregoing is a summary of certain information contained in the
above-referenced documents. Reference is made to the more detailed information
contained in such documents which are attached hereto as Exhibits 10.1-10.5.

                                        2


<PAGE>



AMENDMENT TO THE COMPANY'S SENIOR CREDIT FACILITY

         On December 15, 1998, the Company entered into an agreement amending
its existing senior credit facility pursuant to the terms of an Amendment No. 4
and Consent to Third Amended and Restated Credit Agreement dated as of October
17, 1997 (the "Fourth Amendment to Credit Facility Agreement"). Under the terms
of the Fourth Amendment to Credit Facility Agreement, the Company's existing
credit facility was amended to allow for the TROL Financing and to make other
non-substantive changes to the Company's amended credit facility.

         The foregoing is a summary of certain information contained in the
above-referenced document. Reference is made to the more detailed information
contained in such document, which is attached hereto as Exhibit 10.6.

IMPACT OF THE YEAR 2000

         Over the last year, the Company has been implementing new management
information ("MIS") systems in order to both allow that the Company's computer
systems, which are an important component of its businesses, to meet the
Company's needs into the foreseeable future and to mitigate the Year 2000 issues
which the Company's management believes could be inherent in the Company's
existing MIS systems. The Company has also grown rapidly over the last year, and
particularly over the last six months, and has expanded its operations beyond
the redistribution of aircraft spare parts into the MR&O of aircraft and
aircraft components and into the manufacturing of aircraft parts for sale to
original equipment manufacturers. Due to its rapid expansion, the Company
recently commenced an assessment of the MIS requirements in all of its
businesses.

         The Year 2000 issue is the potential for system and processing failures
of date-related data and the result of computer-controlled systems using two
digits rather than four to define the applicable year. The Company may be
affected by Year 2000 issues in its own non-compliant information technology
("IT") systems or non-IT systems, as well as by Year 2000 issues related to
non-compliant IT and non-IT systems operated by third parties.

         The following discussion contains forward-looking statements, which are
based upon the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the control of the Company. Should one
or more of these risks or uncertainties materialize, or should the assumptions
underlying these forward looking statements prove incorrect, actual results
could differ significantly and adversely from the results expressed or implied
in these forward looking

                                        3


<PAGE>



statements. The Company does not undertake any obligation to revise these
forward looking statements to reflect future events or circumstances. See also
the cautionary statements contained in the MD & A section of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.

         STATE OF READINESS

         The Company has substantially completed an assessment of its internal
and external (third-party) IT systems and non-IT systems. At this point in its
assessment, which the Company believes is approximately 75% complete (in the
aggregate), other than as described herein, the Company is not currently aware
of any Year 2000 problems relating to its systems or the systems operated by
third parties which would have a material effect on the Company's business,
results of operations or financial condition, without taking into account the
Company's efforts to avoid such problems, although there can be no assurance
thereof. In addition, the Company believes that it is approximately 25% and
15% complete (in the aggregate), respectively, with its Year 2000 remediation
and validation.

         The Company's IT systems consist of software licensed from third
parties and hardware purchased or leased from vendors. The Company is currently
implementing new MIS systems, which are primarily designed to service the
Company's distribution services and manufacturing businesses, including new
software and hardware, which management believes that, once fully implemented,
will be Year 2000 compliant and will meet the requirements of the Company's
distribution services and manufacturing businesses into the foreseeable future.
The Company anticipates the systems for each of the distribution services
operations and the manufacturing operations will be substantially implemented by
the end of the third quarter of 1999, although there can be no assurance
thereof.

         The Company has determined that the MIS system which is currently being
used by its distribution services business is not Year 2000 compliant. If the
implementation of the Company's new MIS system is delayed for any reason beyond
April 1999, the Company may decide to modify its existing MIS system to make it
Year 2000 compliant. The Company believes that such modifications would need to
commence no later than July 1999 for the Company to be in a position to
implement, remediate and validate its existing system, as modified, for Year
2000 compliance prior to January 1, 2000. While the Company has been informed by
its vendors that its existing MIS system can be brought into Year 2000
compliance on a timely basis, there can be no assurance of this fact.

         To date, the Company has determined that some of the MIS systems which
are currently being used by its MR&O businesses are not Year 2000 compliant.
Excluding its TIMCO Greensboro, Lake City and Macon facilities, the Company has
substantially completed its assessment of the hardware and software being used
by its non-heavy maintenance MR&O operations and believes that such systems can
be made Year 2000 compliant by the end of 1999. The Company is still in the
process of conducting an assessment of the Year 2000 compliance of the hardware
and software systems for its TIMCO Greensboro, Lake City and Macon facilities,
which were acquired in 1998. Until such time

                                        4


<PAGE>



as the Company substantially completes such assessment, the Company is unable to
determine the scope of remediation and validation work associated with the IT
and non-IT systems at such facilities.

         The Company has also determined that its MIS systems which are being
used by its manufacturing business are not Year 2000 compliant. The Company has
substantially completed its assessment of the hardware and software being used
by its manufacturing operations and believes that such systems can be made Year
2000 compliant either through replacement of the MIS systems or remediation of
the existing hardware and software of its various manufacturing operations. It
expects to complete such changes prior to the end of 1999.

         Excluding its TIMCO Greensboro, Lake City and Macon facilities, the
Company has further substantially completed an assessment of its non-IT systems
which the Company has identified as containing embedded chip systems for Year
2000 issues. At this point in its assessment, the Company is not currently aware
of any Year 2000 problems relating to these systems which would have a material
effect on the Company's business, results of operations, or financial condition,
without taking into account the Company's efforts to avoid such problems.

         Additionally, the Company is reviewing the efforts of its vendors and
customers to become Year 2000 compliant. Letters and questionnaires have been or
are in the process of being sent to all critical entities with which the Company
does business to assess their Year 2000 readiness. To date, the Company has
received responses from approximately 40% of such third parties, and
approximately 60% of the companies that have responded have provided assurances
to the Company that they have already addressed, or that they will address on a
timely basis, all of their known significant Year 2000 issues. The Company
anticipates that these activities will be on-going for all of 1999 and will
include follow-up telephone interviews, correspondence and on-site meetings as
considered necessary in the circumstances. Although this review is continuing,
the Company is not currently aware of any vendor or customer circumstances that
may have a material adverse impact on the Company. The Company will seek
alternative suppliers if circumstances warrant. The Company can provide no
assurance that Year 2000 compliance plans of its vendors and customers will be
completed on a timely manner.

         In that regard, the Company believes that issues relating to the Year
2000 compliance of aircraft spare parts in its inventory, if any, will
ultimately be the responsibility of the manufacturers of such parts, although
there can be no assurance. Further, it is unclear whether the Company's product
liability insurance would ultimately cover a claim based upon a Year 2000
problem in a part sold by the Company.

         The Company's IT systems and other business resources rely on IT
systems and non-IT systems provided by service providers and therefore may be
vulnerable to those service providers' failure to remediate their own Year 2000
issues. Such service providers include those for the Company's network and
e-mail services and landlords for the Company's currently occupied leased office
spaces. The Company has contacted these principal service providers and has been
notified that the IT and non-IT systems which they provide to the Company are
Year 2000 compliant.

                                        5


<PAGE>




         COSTS

         The Company believes that the cost of the new MIS system (i) for its
distribution services business will be approximately $13.5 million, of which
approximately $4.8 million has been expended to date and approximately $8.7
million of which it believes will be expended during 1999 and (ii) for its
manufacturing business will be approximately $2.1 million of which approximately
$947,000 has been spent to date and approximately $1.15 million will be expended
during 1999. At present, the Company is in the early stages of assessing the
Year 2000 compliance of its TIMCO Greensboro, Lake City and Macon facilities.
Until such assessment is substantially complete, the Company does not believe it
will be in a position to estimate the Year 2000 compliance costs for its MR&O
business. The costs of the Company's new MIS systems are being funded from the
Company's existing lines of credit. The $4.8 million and $976,000, respectively,
spent to date has related substantially to the cost of the new MIS systems and
not to bringing the Company's existing MIS systems into Year 2000 compliance.
Such cost estimates include both hardware and software costs, as well as the
anticipated costs of the use of consultant services, but do not include Company
internal costs associated with such efforts, which are not separately tracked
for Year 2000 compliance efforts. Such internal costs principally consist of the
payroll costs for Company employees working on such compliance efforts.

         If the Company determines that due to delays in the implementation of
its new MIS system for its distribution services business, it is in the
Company's best interest to update its existing MIS system for such business to
make it Year 2000 compliant, so that such system remains available for use in
the Company's business until the new MIS system for business becomes
operational, the cost of such update is expected to be approximately $3.5
million. Such cost, if incurred, would be in addition to the costs associated
with the development and implementation of the new MIS system for its
distribution services business as described above, and would not be recoverable
in connection with the development and implementation of the new MIS system for
such business.

         RISKS RELATING TO THE COMPANY'S FAILURE TO BECOME YEAR 2000 COMPLIANT

         To the extent that the Company's assessment is finalized without
identifying any additional material non-compliant IT systems operated by the
Company or by third parties, the most reasonably likely worst case Year 2000
scenario is that the Company will have to bring its existing MIS systems into
Year 2000 compliance; provided, however, that while the Company believes based
upon its assessments that its existing systems can be made Year 2000 compliant
prior to December 31, 1999, there can be no assurance of this fact. The Company
believes that it will be able to either bring its new MIS systems substantially
into operation or bring its existing systems into Year 2000 compliance by the
end of 1999, although there can be no assurance.

         The Company's failure to bring either its new MIS systems into
operation or bring its existing MIS systems into Year 2000 compliance by the end
of 1999 would likely have a material adverse effect on the Company, in that it
would make it very difficult for the Company to operate its business in the
ordinary course and would likely cause the Company to lose revenues, have
increased operating

                                        6


<PAGE>



costs and have business interruptions of a material nature (which would likely
not be covered by the Company's existing business interruption insurance) until
such systems were in place. In addition, there can be no assurance that the Year
2000 issues of other entities will not have a material adverse impact on the
Company's systems or results of operations.

         CONTINGENCY PLANS

         As discussed above, the Company is engaged in an ongoing Year 2000
assessment in order to determine the operational problems and costs (including
loss of revenues) that would be reasonably likely to result from the failure by
the Company and certain third parties to complete efforts necessary to achieve
Year 2000 compliance on a timely basis. The Company is currently continuing to
develop its new MIS systems for its distribution services business, and hopes to
be in a position by March 1999 to determine whether such system will be far
enough along in its development so that it can be made operational prior to the
end of 1999. Alternatively, unless by the end of April 1999 the Company has
determined that it is reasonably likely that it will be in a position to bring
its new MIS system for its distribution services business into operation prior
to the end of the year, the Company will likely opt to expend the costs
associated with bringing the Company's existing MIS system for its distribution
services business into Year 2000 compliance.

         The Company is currently considering what its contingency plans will be
in the event that the Company is not able to bring its existing MIS systems for
its TIMCO Greensboro, Lake City and Macon facilities into Year 2000 compliance
by the end of 1999. The Company currently plans to complete such contingency
plans by the end of March 1999.

FILING OF PAINEWEBBER LAWSUIT

         On January 8, 1999, PaineWebber Incorporated ("PaineWebber") filed in
the Supreme Court of the State of New York a complaint against the Company and
its subsidiary, Whitehall Corporation ("Whitehall") alleging breach of contract
claims and related claims against the Company and Whitehall and a tortious
interference with a contract claim against the Company in connection with the
Company's acquisition of TIMCO in September 1998. These claims primarily arose
based upon a 1997 agreement between Whitehall and PaineWebber relating to
certain investment banking services to be provided to Whitehall by PaineWebber
in connection with a proposed acquisition of TIMCO by Whitehall. PaineWebber is
seeking damages of approximately $1.0 million, plus costs, payment of
approximately $250,000 allegedly due relating to the failure of Whitehall to
honor an alleged right of first refusal in the 1997 agreement, and an unstated
amount of punitive damages.

         The Company believes that its acquisition of TIMCO was not within the
scope of the PaineWebber/Whitehall agreement and that claims brought under this
agreement against the Company and Whitehall are without merit. The Company
intends to vigorously defend these claims. Although no assurance can be given,
the Company believes that the ultimate outcome of this matter will not have a
material adverse effect on the financial condition of the Company.

                                        7


<PAGE>



ITEM 7.           EXHIBITS.

         (a)      Exhibits.

                                                                     SEQUENTIAL
EXHIBIT NO.    DESCRIPTION                                           PAGE NUMBER
-----------    -----------                                           -----------
    10.1       Credit Agreement dated as of December 17, 1998
               among First Security Bank, National Association,
               as owner trustee for the Aviation Sales Trust
               1998-1, as lessor, NationsBank, National
               Association, as administrative agent, and the
               several lenders parties thereto.

    10.2       Lease Agreement dated as of December 17, 1998
               between First Security Bank, National Association,
               as owner trustee under Aviation Sales Trust
               1998-1, as lessor, and the Company, as lessee.

    10.3       Guaranty Agreement (Series A Obligations) between
               the Company, substantially all of its subsidiaries
               and NationsBank, National Association, as agent
               for the Series A lenders, dated as of December 17,
               1998.

    10.4       Guaranty Agreement (Lease Obligations) between
               substantially all of the subsidiaries of the
               Company and First Security Bank, National
               Association, as owner trustee for the Aviation
               Sales Trust 1998-1, dated as of December 17, 1998.

    10.5       Participation Agreement between the Company as
               Construction Agent and Leases, First Security Bank,
               National Association, as Owner Trustee, the Various
               Banks and other lending institutions as the holders and
               lenders, and NationsBank, National Association, as
               Administrative Agent, dated as of December 17, 1998.

    10.6       Amendment No. 4 and Consent, dated December 15,
               1998, to Third Amended and Restated Credit Agreement.

                                        8


<PAGE>


                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, this 8th day of February, 1999.

                                AVIATION SALES COMPANY

                                By: /s/ DALE S. BAKER
                                    --------------------------------------------
                                    Dale S. Baker, President and CEO

                                        9


<PAGE>

                                 EXHIBIT INDEX

EXHIBIT NO.    DESCRIPTION                                          
-----------    -----------                                          
    10.1       Credit Agreement dated as of December 17, 1998
               among First Security Bank, National Association,
               as owner trustee for the Aviation Sales Trust
               1998-1, as lessor, NationsBank, National
               Association, as administrative agent, and the
               several lenders parties thereto.

    10.2       Lease Agreement dated as of December 17, 1998
               between First Security Bank, National Association,
               as owner trustee under Aviation Sales Trust
               1998-1, as lessor, and the Company, as lessee.

    10.3       Guaranty Agreement (Series A Obligations) between
               the Company, substantially all of its subsidiaries
               and NationsBank, National Association, as agent
               for the Series A lenders, dated as of December 17,
               1998.

    10.4       Guaranty Agreement (Lease Obligations) between
               substantially all of the subsidiaries of the
               Company and First Security Bank, National
               Association, as owner trustee for the Aviation
               Sales Trust 1998-1, dated as of December 17, 1998.

    10.5       Participation Agreement between the Company as
               Construction Agent and Leases, First Security Bank,
               National Association, as Owner Trustee, the Various
               Banks and other lending institutions as the holders and
               lenders, and NationsBank, National Association, as
               Administrative Agent, dated as of December 17, 1998.

    10.6       Amendment No. 4 and Consent, dated December 15,
               1998, to Third Amended and Restated Credit Agreement.
[{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 25896}]
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SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                           --------------------------

                                    FORM 8-K

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

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)   DECEMBER 17, 1998   

                             AVIATION SALES COMPANY
--------------------------------------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

        DELAWARE                         1-11775                65-0665658
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION           (COMMISSION             (IRS EMPLOYER
OF INCORPORATION)                      FILE NUMBER)          IDENTIFICATION NO.)

                      6905 NW 25TH STREET, MIAMI, FL       33122
--------------------------------------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE      (305) 592-4055  

                                       N/A
--------------------------------------------------------------------------------
          (FORMER NAME OR FORMER ADDRESS; IF CHANGED SINCE LAST REPORT)

                               Page 1 of 9 pages.
ITEM 5.           OTHER EVENTS.

GROUND BREAKING FOR NEW CORPORATE HEADQUARTERS AND CENTRAL WAREHOUSE FACILITY

         On January 4, 1999, the ground breaking for the construction of the
Company's new corporate headquarters and warehouse facility (the "New Facility")
took place. The New Facility, which will be located on a 41 acre parcel in the
City of Miramar, Florida, will contain approximately 630,000 square feet of
space and consist of two buildings. One building, which will contain
approximately 545,000 square feet, will consolidate the operations of the
Company's aircraft spare parts redistribution business, as well as serve as the
corporate headquarters for the Company's distribution services, maintenance,
repair and overhaul ("MR&O"), leasing and manufacturing businesses. The other
building, which will contain approximately 85,000 square feet, will be used as
office and warehouse space by the Company's subsidiary, Caribe Aviation, Inc.

DEVELOPMENT AND LEASING OF THE NEW FACILITY

         On December 17, 1998, the Company entered into a tax retention
operating lease for the New Facility (the "Lease") with First Security Bank,
National Association, as trustee (the "Trustee") of the Aviation Sales Trust
1998-1 (the "Trust"), as lessor. The Lease has an initial term of five years and
is a triple net lease with annual rent as provided in the Lease. The Lease
contains certain financial covenants regarding the financial performance of the
Company and certain other affirmative and negative covenants which the Company
will be obligated to comply with during the term of the Lease. Substantially all
of the Company's subsidiaries have guaranteed the Company's obligations under
the Lease. Additionally, the Company has an option to acquire the New Facility
at the end of the Lease for an option price as determined in the Lease.
Alternatively, if the Company does not purchase the New Facility at the end of
the Lease, the Company will be obligated to pay certain amounts as provided in
the Lease.

         The development of the New Facility has been financed through a $34.4
million operating lease facility provided by a syndicate of financial
institutions (the "TROL Financing"). Pursuant to the TROL Financing documents,
the Company is obligated to develop the New Facility on behalf of the Trust and
is responsible for the timely completion thereof within an established
construction budget. The Company and substantially all of its subsidiaries have
guaranteed the repayment of $31.2 million of the Trustee's obligations under a
credit agreement with certain lenders (the "Credit Agreement"). The Trust's
obligations under the Credit Agreement are secured by a lien on the real
property and improvements comprising the New Facility and on the fixtures
therein. Further, the Company has posted an irrevocable letter of credit in
favor of the Trustee in the amount of approximately $8.0 million to secure
both the Company's obligations under the Lease and the Trustee's obligations
under the Credit Agreement.

         The foregoing is a summary of certain information contained in the
above-referenced documents. Reference is made to the more detailed information
contained in such documents which are attached hereto as Exhibits 10.1-10.5.

                                        2
AMENDMENT TO THE COMPANY'S SENIOR CREDIT FACILITY

         On December 15, 1998, the Company entered into an agreement amending
its existing senior credit facility pursuant to the terms of an Amendment No. 4
and Consent to Third Amended and Restated Credit Agreement dated as of October
17, 1997 (the "Fourth Amendment to Credit Facility Agreement"). Under the terms
of the Fourth Amendment to Credit Facility Agreement, the Company's existing
credit facility was amended to allow for the TROL Financing and to make other
non-substantive changes to the Company's amended credit facility.

         The foregoing is a summary of certain information contained in the
above-referenced document. Reference is made to the more detailed information
contained in such document, which is attached hereto as Exhibit 10.6.

IMPACT OF THE YEAR 2000

         Over the last year, the Company has been implementing new management
information ("MIS") systems in order to both allow that the Company's computer
systems, which are an important component of its businesses, to meet the
Company's needs into the foreseeable future and to mitigate the Year 2000 issues
which the Company's management believes could be inherent in the Company's
existing MIS systems. The Company has also grown rapidly over the last year, and
particularly over the last six months, and has expanded its operations beyond
the redistribution of aircraft spare parts into the MR&O of aircraft and
aircraft components and into the manufacturing of aircraft parts for sale to
original equipment manufacturers. Due to its rapid expansion, the Company
recently commenced an assessment of the MIS requirements in all of its
businesses.

         The Year 2000 issue is the potential for system and processing failures
of date-related data and the result of computer-controlled systems using two
digits rather than four to define the applicable year. The Company may be
affected by Year 2000 issues in its own non-compliant information technology
("IT") systems or non-IT systems, as well as by Year 2000 issues related to
non-compliant IT and non-IT systems operated by third parties.

         The following discussion contains forward-looking statements, which are
based upon the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the control of the Company. Should one
or more of these risks or uncertainties materialize, or should the assumptions
underlying these forward looking statements prove incorrect, actual results
could differ significantly and adversely from the results expressed or implied
in these forward looking

                                        3
statements. The Company does not undertake any obligation to revise these
forward looking statements to reflect future events or circumstances. See also
the cautionary statements contained in the MD & A section of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.

         STATE OF READINESS

         The Company has substantially completed an assessment of its internal
and external (third-party) IT systems and non-IT systems. At this point in its
assessment, which the Company believes is approximately 75% complete (in the
aggregate), other than as described herein, the Company is not currently aware
of any Year 2000 problems relating to its systems or the systems operated by
third parties which would have a material effect on the Company's business,
results of operations or financial condition, without taking into account the
Company's efforts to avoid such problems, although there can be no assurance
thereof. In addition, the Company believes that it is approximately 25% and
15% complete (in the aggregate), respectively, with its Year 2000 remediation
and validation.

         The Company's IT systems consist of software licensed from third
parties and hardware purchased or leased from vendors. The Company is currently
implementing new MIS systems, which are primarily designed to service the
Company's distribution services and manufacturing businesses, including new
software and hardware, which management believes that, once fully implemented,
will be Year 2000 compliant and will meet the requirements of the Company's
distribution services and manufacturing businesses into the foreseeable future.
The Company anticipates the systems for each of the distribution services
operations and the manufacturing operations will be substantially implemented by
the end of the third quarter of 1999, although there can be no assurance
thereof.

         The Company has determined that the MIS system which is currently being
used by its distribution services business is not Year 2000 compliant. If the
implementation of the Company's new MIS system is delayed for any reason beyond
April 1999, the Company may decide to modify its existing MIS system to make it
Year 2000 compliant. The Company believes that such modifications would need to
commence no later than July 1999 for the Company to be in a position to
implement, remediate and validate its existing system, as modified, for Year
2000 compliance prior to January 1, 2000. While the Company has been informed by
its vendors that its existing MIS system can be brought into Year 2000
compliance on a timely basis, there can be no assurance of this fact.

         To date, the Company has determined that some of the MIS systems which
are currently being used by its MR&O businesses are not Year 2000 compliant.
Excluding its TIMCO Greensboro, Lake City and Macon facilities, the Company has
substantially completed its assessment of the hardware and software being used
by its non-heavy maintenance MR&O operations and believes that such systems can
be made Year 2000 compliant by the end of 1999. The Company is still in the
process of conducting an assessment of the Year 2000 compliance of the hardware
and software systems for its TIMCO Greensboro, Lake City and Macon facilities,
which were acquired in 1998. Until such time

                                        4
as the Company substantially completes such assessment, the Company is unable to
determine the scope of remediation and validation work associated with the IT
and non-IT systems at such facilities.

         The Company has also determined that its MIS systems which are being
used by its manufacturing business are not Year 2000 compliant. The Company has
substantially completed its assessment of the hardware and software being used
by its manufacturing operations and believes that such systems can be made Year
2000 compliant either through replacement of the MIS systems or remediation of
the existing hardware and software of its various manufacturing operations. It
expects to complete such changes prior to the end of 1999.

         Excluding its TIMCO Greensboro, Lake City and Macon facilities, the
Company has further substantially completed an assessment of its non-IT systems
which the Company has identified as containing embedded chip systems for Year
2000 issues. At this point in its assessment, the Company is not currently aware
of any Year 2000 problems relating to these systems which would have a material
effect on the Company's business, results of operations, or financial condition,
without taking into account the Company's efforts to avoid such problems.

         Additionally, the Company is reviewing the efforts of its vendors and
customers to become Year 2000 compliant. Letters and questionnaires have been or
are in the process of being sent to all critical entities with which the Company
does business to assess their Year 2000 readiness. To date, the Company has
received responses from approximately 40% of such third parties, and
approximately 60% of the companies that have responded have provided assurances
to the Company that they have already addressed, or that they will address on a
timely basis, all of their known significant Year 2000 issues. The Company
anticipates that these activities will be on-going for all of 1999 and will
include follow-up telephone interviews, correspondence and on-site meetings as
considered necessary in the circumstances. Although this review is continuing,
the Company is not currently aware of any vendor or customer circumstances that
may have a material adverse impact on the Company. The Company will seek
alternative suppliers if circumstances warrant. The Company can provide no
assurance that Year 2000 compliance plans of its vendors and customers will be
completed on a timely manner.

         In that regard, the Company believes that issues relating to the Year
2000 compliance of aircraft spare parts in its inventory, if any, will
ultimately be the responsibility of the manufacturers of such parts, although
there can be no assurance. Further, it is unclear whether the Company's product
liability insurance would ultimately cover a claim based upon a Year 2000
problem in a part sold by the Company.

         The Company's IT systems and other business resources rely on IT
systems and non-IT systems provided by service providers and therefore may be
vulnerable to those service providers' failure to remediate their own Year 2000
issues. Such service providers include those for the Company's network and
e-mail services and landlords for the Company's currently occupied leased office
spaces. The Company has contacted these principal service providers and has been
notified that the IT and non-IT systems which they provide to the Company are
Year 2000 compliant.

                                        5
COSTS

         The Company believes that the cost of the new MIS system (i) for its
distribution services business will be approximately $13.5 million, of which
approximately $4.8 million has been expended to date and approximately $8.7
million of which it believes will be expended during 1999 and (ii) for its
manufacturing business will be approximately $2.1 million of which approximately
$947,000 has been spent to date and approximately $1.15 million will be expended
during 1999. At present, the Company is in the early stages of assessing the
Year 2000 compliance of its TIMCO Greensboro, Lake City and Macon facilities.
Until such assessment is substantially complete, the Company does not believe it
will be in a position to estimate the Year 2000 compliance costs for its MR&O
business. The costs of the Company's new MIS systems are being funded from the
Company's existing lines of credit. The $4.8 million and $976,000, respectively,
spent to date has related substantially to the cost of the new MIS systems and
not to bringing the Company's existing MIS systems into Year 2000 compliance.
Such cost estimates include both hardware and software costs, as well as the
anticipated costs of the use of consultant services, but do not include Company
internal costs associated with such efforts, which are not separately tracked
for Year 2000 compliance efforts. Such internal costs principally consist of the
payroll costs for Company employees working on such compliance efforts.

         If the Company determines that due to delays in the implementation of
its new MIS system for its distribution services business, it is in the
Company's best interest to update its existing MIS system for such business to
make it Year 2000 compliant, so that such system remains available for use in
the Company's business until the new MIS system for business becomes
operational, the cost of such update is expected to be approximately $3.5
million. Such cost, if incurred, would be in addition to the costs associated
with the development and implementation of the new MIS system for its
distribution services business as described above, and would not be recoverable
in connection with the development and implementation of the new MIS system for
such business.

         RISKS RELATING TO THE COMPANY'S FAILURE TO BECOME YEAR 2000 COMPLIANT

         To the extent that the Company's assessment is finalized without
identifying any additional material non-compliant IT systems operated by the
Company or by third parties, the most reasonably likely worst case Year 2000
scenario is that the Company will have to bring its existing MIS systems into
Year 2000 compliance; provided, however, that while the Company believes based
upon its assessments that its existing systems can be made Year 2000 compliant
prior to December 31, 1999, there can be no assurance of this fact. The Company
believes that it will be able to either bring its new MIS systems substantially
into operation or bring its existing systems into Year 2000 compliance by the
end of 1999, although there can be no assurance.

         The Company's failure to bring either its new MIS systems into
operation or bring its existing MIS systems into Year 2000 compliance by the end
of 1999 would likely have a material adverse effect on the Company, in that it
would make it very difficult for the Company to operate its business in the
ordinary course and would likely cause the Company to lose revenues, have
increased operating

                                        6
costs and have business interruptions of a material nature (which would likely
not be covered by the Company's existing business interruption insurance) until
such systems were in place. In addition, there can be no assurance that the Year
2000 issues of other entities will not have a material adverse impact on the
Company's systems or results of operations.

         CONTINGENCY PLANS

         As discussed above, the Company is engaged in an ongoing Year 2000
assessment in order to determine the operational problems and costs (including
loss of revenues) that would be reasonably likely to result from the failure by
the Company and certain third parties to complete efforts necessary to achieve
Year 2000 compliance on a timely basis. The Company is currently continuing to
develop its new MIS systems for its distribution services business, and hopes to
be in a position by March 1999 to determine whether such system will be far
enough along in its development so that it can be made operational prior to the
end of 1999. Alternatively, unless by the end of April 1999 the Company has
determined that it is reasonably likely that it will be in a position to bring
its new MIS system for its distribution services business into operation prior
to the end of the year, the Company will likely opt to expend the costs
associated with bringing the Company's existing MIS system for its distribution
services business into Year 2000 compliance.

         The Company is currently considering what its contingency plans will be
in the event that the Company is not able to bring its existing MIS systems for
its TIMCO Greensboro, Lake City and Macon facilities into Year 2000 compliance
by the end of 1999. The Company currently plans to complete such contingency
plans by the end of March 1999.

FILING OF PAINEWEBBER LAWSUIT

         On January 8, 1999, PaineWebber Incorporated ("PaineWebber") filed in
the Supreme Court of the State of New York a complaint against the Company and
its subsidiary, Whitehall Corporation ("Whitehall") alleging breach of contract
claims and related claims against the Company and Whitehall and a tortious
interference with a contract claim against the Company in connection with the
Company's acquisition of TIMCO in September 1998. These claims primarily arose
based upon a 1997 agreement between Whitehall and PaineWebber relating to
certain investment banking services to be provided to Whitehall by PaineWebber
in connection with a proposed acquisition of TIMCO by Whitehall. PaineWebber is
seeking damages of approximately $1.0 million, plus costs, payment of
approximately $250,000 allegedly due relating to the failure of Whitehall to
honor an alleged right of first refusal in the 1997 agreement, and an unstated
amount of punitive damages.

         The Company believes that its acquisition of TIMCO was not within the
scope of the PaineWebber/Whitehall agreement and that claims brought under this
agreement against the Company and Whitehall are without merit. The Company
intends to vigorously defend these claims. Although no assurance can be given,
the Company believes that the ultimate outcome of this matter will not have a
material adverse effect on the financial condition of the Company.

                                        7
ITEM 7.           EXHIBITS.

         (a)      Exhibits.

                                                                     SEQUENTIAL
EXHIBIT NO.    DESCRIPTION                                           PAGE NUMBER
-----------    -----------                                           -----------
    10.1       Credit Agreement dated as of December 17, 1998
               among First Security Bank, National Association,
               as owner trustee for the Aviation Sales Trust
               1998-1, as lessor, NationsBank, National
               Association, as administrative agent, and the
               several lenders parties thereto.

    10.2       Lease Agreement dated as of December 17, 1998
               between First Security Bank, National Association,
               as owner trustee under Aviation Sales Trust
               1998-1, as lessor, and the Company, as lessee.

    10.3       Guaranty Agreement (Series A Obligations) between
               the Company, substantially all of its subsidiaries
               and NationsBank, National Association, as agent
               for the Series A lenders, dated as of December 17,
               1998.

    10.4       Guaranty Agreement (Lease Obligations) between
               substantially all of the subsidiaries of the
               Company and First Security Bank, National
               Association, as owner trustee for the Aviation
               Sales Trust 1998-1, dated as of December 17, 1998.

    10.5       Participation Agreement between the Company as
               Construction Agent and Leases, First Security Bank,
               National Association, as Owner Trustee, the Various
               Banks and other lending institutions as the holders and
               lenders, and NationsBank, National Association, as
               Administrative Agent, dated as of December 17, 1998.

    10.6       Amendment No. 4 and Consent, dated December 15,
               1998, to Third Amended and Restated Credit Agreement.

                                        8
SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, this 8th day of February, 1999.

                                AVIATION SALES COMPANY

                                By: /s/ DALE S. BAKER
                                    --------------------------------------------
                                    Dale S. Baker, President and CEO

                                        9
EXHIBIT INDEX

EXHIBIT NO.    DESCRIPTION                                          
-----------    -----------                                          
    10.1       Credit Agreement dated as of December 17, 1998
               among First Security Bank, National Association,
               as owner trustee for the Aviation Sales Trust
               1998-1, as lessor, NationsBank, National
               Association, as administrative agent, and the
               several lenders parties thereto.

    10.2       Lease Agreement dated as of December 17, 1998
               between First Security Bank, National Association,
               as owner trustee under Aviation Sales Trust
               1998-1, as lessor, and the Company, as lessee.

    10.3       Guaranty Agreement (Series A Obligations) between
               the Company, substantially all of its subsidiaries
               and NationsBank, National Association, as agent
               for the Series A lenders, dated as of December 17,
               1998.

    10.4       Guaranty Agreement (Lease Obligations) between
               substantially all of the subsidiaries of the
               Company and First Security Bank, National
               Association, as owner trustee for the Aviation
               Sales Trust 1998-1, dated as of December 17, 1998.

    10.5       Participation Agreement between the Company as
               Construction Agent and Leases, First Security Bank,
               National Association, as Owner Trustee, the Various
               Banks and other lending institutions as the holders and
               lenders, and NationsBank, National Association, as
               Administrative Agent, dated as of December 17, 1998.

    10.6       Amendment No. 4 and Consent, dated December 15,
               1998, to Third Amended and Restated Credit Agreement.