


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

             |X| Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                For the quarterly period ended December 31, 2000

             |_| Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                    For the transition period _____ to _____

                          Commission File Number 0-5232

                            OFFSHORE LOGISTICS, INC.
             (Exact name of registrant as specified in its charter)

                         DELAWARE                           72-0679819
              (State or other jurisdiction of           (IRS Employer
              incorporation or organization)          Identification Number)

                      224 RUE DE JEAN
            P. O. BOX 5C, LAFAYETTE, LOUISIANA             70505
         (Address of principal executive offices)       (Zip Code)

       Registrant's telephone number, including area code: (337) 233-1221


--------------------------------------------------------------------------------
(Former name,  former  address and former  fiscal  year,  if changed  since last
     report)


         Indicate  by check  mark  whether  the  registrant:  (1) has  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,  and (2) has been  subject to such
filing requirements for the past 90 days. Yes |X| No |_|


         Indicate the number shares  outstanding of each of the issuer's classes
of Common Stock, as of December 31, 2000.

                21,402,421 shares of Common Stock, $.01 par value






<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements



                    OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                (thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>


                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  DECEMBER 31,                    DECEMBER 31,
                                                            --------------------------    ---------------------------
                                                              2000            1999            2000           1999
                                                            -----------    -----------    -----------    ------------

 <S>                                                        <C>            <C>            <C>             <C>
GROSS REVENUE:
Operating revenue.........................................  $   122,101    $   103,371    $   355,935     $   314,766
Gain (loss) on disposal of assets.........................           15          1,795            548           3,322
                                                            -----------    -----------    -----------     -----------
                                                                122,116        105,166        356,483         318,088
OPERATING EXPENSES
Direct cost...............................................       91,801         81,331        266,687         254,117
Depreciation and amortization.............................        8,445          8,685         26,147          25,260
General and administrative................................        7,296          6,079         23,397          20,191
                                                            -----------    -----------    -----------     -----------
                                                                107,542         96,095        316,231         299,568
                                                            -----------    -----------    -----------     -----------

OPERATING INCOME..........................................       14,574          9,071         40,252          18,520

Earnings from unconsolidated entities.....................        2,122          1,067          4,021           3,254
Interest income...........................................        1,030            668          2,425           2,402
Interest expense..........................................        4,756          4,553         13,688          13,949
                                                            -----------    -----------    -----------     -----------

INCOME BEFORE PROVISION FOR INCOME
   TAXES AND MINORITY INTEREST............................       12,970          6,253         33,010          10,227

Provision for income taxes................................        4,015          1,935         10,231           3,170
Minority interest.........................................         (352)          (351)        (1,046)         (1,060)
                                                            -----------    -----------    -----------     -----------

NET INCOME................................................  $     8,603    $     3,967    $    21,733     $     5,997
                                                            ===========    ===========    ===========     ===========

Net income per common share:
Basic.....................................................  $     0.41     $      0.19    $      1.03     $      0.28
                                                            ==========     ===========    ===========     ===========
Diluted...................................................  $     0.37     $      0.19    $      0.97     $      0.28
                                                            ==========     ===========    ===========     ===========

</TABLE>
                                       2
<PAGE>


<TABLE>
<CAPTION>

                    OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                             (thousands of dollars)


                                                                                 DECEMBER 31,       MARCH 31,
                                                                                ---------------   ------------
                                                                                     2000              2000
                                                                                ---------------   ------------

<S>                                                                             <C>              <C>
ASSETS
Current Assets:
    Cash and cash equivalents...................................................$       42,222   $     37,935
    Accounts receivable.........................................................       110,123         96,387
    Inventories.................................................................        79,294         80,435
    Prepaid expenses............................................................         9,852          5,725
                                                                                --------------   ------------
       Total current assets.....................................................       241,491        220,482

Investments in unconsolidated entities..........................................        17,016         14,093
Property and equipment - at cost:
    Land and buildings..........................................................         9,863         11,005
    Aircraft and equipment......................................................       618,737        605,949
                                                                                --------------   ------------
                                                                                       628,600        616,954
Less:  accumulated depreciation and amortization................................      (167,091)      (142,931)
                                                                                --------------   ------------
                                                                                       461,509        474,023
Other assets....................................................................        28,598         34,576
                                                                                --------------   ------------

                                                                                $      748,614   $    743,174
                                                                                ==============   ============

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
    Accounts payable............................................................$       27,595   $     30,749
    Accrued liabilities.........................................................        62,324         52,082
    Deferred taxes..............................................................        18,386         18,443
    Current maturities of long-term debt........................................        16,492         16,540
                                                                                --------------   ------------
       Total current liabilities................................................       124,797        117,814

Long-term debt, less current maturities.........................................       212,170        224,738
Other liabilities and deferred credits..........................................         3,285          2,932
Deferred taxes..................................................................        97,769         96,739
Minority interest...............................................................        12,240         11,911

Stockholders' Investment:
    Common Stock,  $.01 par value,  authorized  35,000,000  shares;  outstanding
       21,402,421 and 21,105,921 at December 31
       and March 31, respectively (exclusive of 1,281,050 treasury shares)                 214            211
    Additional paid-in capital..................................................       119,668        116,074
    Retained earnings...........................................................       203,737        182,004
    Accumulated other comprehensive income (loss)...............................       (25,266)        (9,249)
                                                                                --------------   ------------
                                                                                       298,353        289,040
                                                                                --------------   ------------

                                                                                $      748,614   $    743,174
                                                                                ==============   ============
</TABLE>
                                       3
<PAGE>

                    OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                             (thousands of dollars)

<TABLE>
<CAPTION>

                                                                                       NINE MONTHS ENDED
                                                                                         DECEMBER 31,
                                                                                ----------------------------
                                                                                     2000            1999
                                                                                ------------    ------------
Cash flows from operating activities:
<S>                                                                             <C>             <C>
    Net income..................................................................$      21,733   $      5,997
Adjustments to reconcile net income to cash
provided by operating activities:
    Depreciation and amortization...............................................       26,147         25,260
    Increase (decrease) in deferred taxes.......................................        5,296          2,018
    Gain on asset dispositions..................................................         (548)        (3,322)
    Equity in earnings from unconsolidated entities
       over (under) dividends received..........................................       (1,339)        (3,659)
    Minority interest in earnings...............................................        1,046          1,060
    (Increase) decrease in accounts receivable..................................      (18,530)        (5,386)
    (Increase) decrease in inventories..........................................       (1,477)         3,001
    (Increase) decrease in prepaid expenses and other...........................           50         (4,213)
    Increase (decrease) in accounts payable.....................................       (1,521)           707
    Increase (decrease) in accrued liabilities..................................       11,719         (3,683)
    Increase (decrease) in other liabilities and deferred credits...............          350            376
                                                                                -------------   ------------
Net cash provided by operating activities.......................................       42,926         18,156
                                                                                -------------   ------------


Cash flows from investing activities:
    Capital expenditures........................................................      (31,528)       (54,312)
    Proceeds from asset dispositions............................................        2,012          9,236
    Investments.................................................................       (1,200)            --
                                                                                -------------   ------------
Net cash used in investing activities...........................................      (30,716)       (45,076)
                                                                                -------------   ------------

Cash flows from financing activities:
    Proceeds from borrowings....................................................        2,604          6,452
    Repayment of debt...........................................................      (13,185)        (7,360)
    Repurchase of common stock..................................................           --             --
    Issuance of common stock....................................................        3,597             --
                                                                                -------------   ------------
Net cash provided by (used in) financing activities.............................       (6,984)          (908)
                                                                                -------------   ------------

Effect of exchange rate changes in cash.........................................         (939)            35
                                                                                -------------   ------------

Net increase (decrease) in cash and cash equivalents............................        4,287        (27,793)
Cash and cash equivalents at beginning of period................................       37,935         70,594
                                                                                -------------   ------------

Cash and cash equivalents at end of period......................................$      42,222   $     42,801
                                                                                =============   ============

Supplemental  disclosure  of cash flow  information
 Cash paid during the period for:
    Interest....................................................................$      12,227   $     12,283
    Income taxes................................................................$       2,977   $      3,786

</TABLE>
                                       4
<PAGE>

                    OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE A - BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
information  and  footnotes  necessary  for a  fair  presentation  of  financial
position,  results of operations,  and cash flows in conformity  with accounting
principles   generally  accepted  in  the  United  States.  In  the  opinion  of
management,  any adjustments  considered  necessary for a fair presentation have
been  included.  Operating  results for the nine months ended December 31, 2000,
are not necessarily  indicative of the results that may be expected for the year
ending  March 31,  2001.  For  further  information,  refer to the  consolidated
financial  statements and footnotes  included in the Company's  Annual Report on
Form 10-K for the fiscal year ended March 31, 2000.

NOTE B - EARNINGS PER SHARE


         Basic earnings per common share were computed by dividing net income by
the weighted  average  number of shares of common stock  outstanding  during the
year.  Diluted  earnings per share for the three and nine months ended  December
31, 2000 excluded 311,065 and 311,355 stock options, respectively, at a weighted
average exercise price of $19.15,  which were outstanding during the periods but
were  anti-dilutive.  Diluted  earnings  per share for the three and nine months
ended December 31, 1999 excluded  3,976,928  shares  related to the  convertible
debt and 843,000 and 903,471 stock options,  respectively, at a weighted average
exercise price of $15.07 and $14.69, respectively, which were outstanding during
the  periods  but  were  anti-dilutive.  The  following  table  sets  forth  the
computation of basic and diluted net income per share:
<TABLE>
<CAPTION>

                                                                     THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                        DECEMBER 31,                   DECEMBER 31,
                                                                ----------------------------    --------------------------
                                                                    2000            1999           2000            1999
                                                                -----------      -----------    -----------    -----------

<S>                                                             <C>             <C>            <C>           <C>
Net income (thousands of dollars):
    Income available to common stockholders.................... $      8,603    $      3,967   $     21,733  $     5,997
    Interest on convertible debt, net of taxes.................          941              --          2,823           --
                                                                ------------    ------------   ------------  -----------
    Income available to common stockholders,
         plus assumed conversions.............................. $      9,544    $      3,967   $     24,556  $     5,997
                                                                ============    ============   ============  ===========

Shares:
    Weighted average number of common
    shares outstanding.........................................   21,211,888      21,103,421     21,144,019   21,103,421
    Options....................................................      364,717           8,393        253,040       12,936
    Convertible debt...........................................    3,976,928              --      3,976,928           --
                                                                ------------    ------------   ------------  -----------
    Weighted average number of common
         shares outstanding, plus assumed conversions..........   25,553,533      21,111,814     25,373,987   21,116,357
                                                                ============    ============   ============  ===========

Net income per share:
    Basic...................................................... $       0.41    $       0.19   $       1.03  $      0.28
                                                                ============    ============   ============  ===========
    Diluted.................................................... $       0.37    $       0.19   $       0.97  $      0.28
                                                                ============    ============   ============  ===========
</TABLE>
                                       5
<PAGE>



NOTE C - COMMITMENTS AND CONTINGENCIES

       On November 16, 1999, the Office and Professional Employees International
Union  ("OPEIU")  petitioned the National  Mediation Board ("NMB") to conduct an
election  among the mechanics and related  personnel  employed by Air Logistics,
L.L.C. and Air Logistics of Alaska, Inc. The election for Air Logistics,  L.L.C.
was held on March 13, 2000 with the  mechanics  voting in favor of the  Company.
The NMB dismissed the matter with respect to the  Alaska-based  group on January
24, 2000,  but due to  extraordinary  circumstances,  the NMB did accept another
representation  application covering the Air Logistics of Alaska, Inc. mechanics
and related  employees.  The Alaska  election was held on July 21, 2000 with the
mechanics  voting in favor of the  International  Union of  Operating  Engineers
("IUOE").  Negotiations  with the IUOE are in  progress.  The  Company  does not
believe that current organizing efforts will place it at a disadvantage with its
competitors and management  believes that pay scales,  benefits,  and work rules
will continue to be similar throughout the industry.

NOTE D - COMPREHENSIVE INCOME

     In 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 130,
"Reporting  Comprehensive Income". SFAS No. 130 requires an entity to report and
display  comprehensive  income and its  components.  Comprehensive  income is as
follows (thousands of dollars):
<TABLE>
<CAPTION>

                                                       THREE MONTHS ENDED          NINE MONTHS ENDED
                                                        DECEMBER 31,                 DECEMBER 31,
                                                    ------------------------    -----------------------
                                                         2000         1999          2000         1999
                                                    ----------    ----------    ----------   ----------

<S>                                               <C>           <C>           <C>          <C>
Net Income........................................$    8,603    $    3,967    $   21,733   $    5,997
Other Comprehensive Income:
    Currency translation adjustment...............     2,812        (5,173)      (16,017)         140
                                                   ----------    ----------    ----------   ----------
Comprehensive Income (Loss).......................$   11,415    $   (1,206)   $    5,716   $    6,137
                                                   ==========    ==========    ==========   ==========
</TABLE>


NOTE E - DERIVATIVE FINANCIAL INSTRUMENTS

       In June 1998, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging  Activities" which establishes  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that entities  recognize all  derivatives as either assets or liabilities in the
statements of financial  position and measure those  instruments  at fair value.
Changes in a derivative's fair value are to be recognized  currently in earnings
unless specific hedge accounting  criteria are met. The Company will be required
to adopt SFAS No.  133, as amended by SFAS No. 137, no later than April 1, 2001.
The  Company  does  not  use  derivative   instruments  or  hedging   activities
extensively  in its business and therefore the adoption of this new statement is
not expected to materially affect the Company's financial position or results of
operations.  The new statement could however cause  volatility in the components
of other comprehensive income.


                                       6
<PAGE>

NOTE F - SEGMENT INFORMATION

       The Company has adopted SFAS No. 131,  "Disclosures  about Segments of An
Enterprise and Related  Information",  which  requires that  companies  disclose
segment data based on how management makes decisions about allocating  resources
to segments and measuring their performance. The Company operates principally in
two business  segments:  Helicopter  activities  and  Production  management and
related  services.  The following shows reportable  segment  information for the
three  and  nine  months  ended  December  31,  2000  and  1999,  reconciled  to
consolidated   totals,   and  prepared  on  the  same  basis  as  the  Company's
consolidated financial statements (in thousands):
<TABLE>
<CAPTION>

                                                                  THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                     DECEMBER 31,                    DECEMBER 31,
                                                                -------------------------      ------------------------
                                                                  2000           1999             2000           1999
                                                                ----------    -----------      ----------    ----------

<S>                                                             <C>           <C>              <C>           <C>
Segment operating revenue from external customers:
     Helicopter activities..................................... $   107,050   $    90,180      $   312,030   $   278,103
     Production management and related services................      12,367        10,785           35,871        29,786
                                                                -----------   -----------      -----------   -----------
         Total segment operating revenue....................... $   119,417   $   100,965      $   347,901   $   307,889
                                                                ===========   ===========      ===========   ===========

Intersegment operating revenue:
     Helicopter activities..................................... $     3,513   $     3,027      $    10,306   $     8,625
     Production management and related services................          --            --               --            --
                                                                -----------   -----------      -----------   -----------
         Total intersegment operating revenue.................. $     3,513   $     3,027      $    10,306   $     8,625
                                                                ===========   ===========      ===========   ===========

Consolidated operating revenue reconciliation:
     Helicopter activities..................................... $   110,563   $    93,207      $   322,336   $   286,728
     Production management and related services................      12,367        10,785           35,871        29,786
     Corporate.................................................       2,684         2,406            8,034         6,877
     Intersegment eliminations.................................      (3,513)       (3,027)         (10,306)       (8,625)
                                                                -----------   -----------      -----------   -----------
         Total consolidated operating revenue.................. $   122,101   $   103,371      $   355,935   $   314,766
                                                                ===========   ===========      ===========   ===========

Consolidated operating income reconciliation:
     Helicopter activities..................................... $    14,060   $     6,214      $    39,314   $    13,234
     Production management and related services................         505           661            1,834         1,816
                                                                -----------   -----------      -----------   -----------
         Total segment operating income........................      14,565         6,875           41,148        15,050
     Gain (loss) disposal of assets............................          15         1,795              548         3,322
     Corporate.................................................          (6)          401           (1,444)          148
                                                                -----------   -----------      -----------   -----------
         Total consolidated operating income................... $    14,574   $     9,071      $    40,252   $    18,520
                                                                ===========   ===========      ===========   ===========


</TABLE>
                                       7
<PAGE>


NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

       In connection  with the sale of the Company's  $100 million 7 7/8% Senior
Notes  due  2008,   certain  of  the  Company's   subsidiaries  (the  "Guarantor
Subsidiaries")  jointly,  severally and  unconditionally  guaranteed the payment
obligations  under  the  Senior  Notes.  The  following  supplemental  financial
information sets forth, on a consolidating  basis, the balance sheet,  statement
of income  and cash flow  information  for  Offshore  Logistics,  Inc.  ("Parent
Company  Only"),  for the  Guarantor  Subsidiaries  and for Offshore  Logistics,
Inc.'s other subsidiaries (the  "Non-Guarantor  Subsidiaries").  The Company has
not presented separate financial statements and other disclosures concerning the
Guarantor  Subsidiaries  because management has determined that such information
is not material to investors.

       The supplemental condensed  consolidating  financial information has been
prepared  pursuant  to  the  rules  and  regulations  for  condensed   financial
information  and does not include all disclosures  included in annual  financial
statements, although the Company believes that the disclosures made are adequate
to make the information presented not misleading. Certain reclassifications were
made to conform all of the financial  information to the financial  presentation
on a consolidated basis. The principal eliminating entries eliminate investments
in subsidiaries, intercompany balances and intercompany revenues and expenses.

       The  allocation of the  consolidated  income tax provision was made using
the with and without allocation method.

                                       8
<PAGE>


NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED

              SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2000
<TABLE>
<CAPTION>
                                                Parent                         Non-
                                                Company       Guarantor     Guarantor
                                                 Only       Subsidiaries   Subsidiaries  Eliminations      Consolidated
                                             ----------     ------------   ------------  ------------     -------------
<S>                                         <C>             <C>            <C>            <C>             <C>
ASSETS
  Current assets:
    Cash and cash equivalents...............$     8,925     $     2,975    $    30,322    $        --     $      42,222
    Accounts receivable.....................        917          34,839         79,043         (4,676)          110,123
    Inventories.............................         --          41,772         37,522             --            79,294
    Prepaid expenses........................        170           2,053          7,629             --             9,852
                                            -----------     -----------    -----------    -----------     -------------
      Total current assets..................     10,012          81,639        154,516         (4,676)          241,491

  Intercompany investment...................    222,628              --             --       (222,628)               --
  Investments in unconsolidated entities....         --              --         17,016             --            17,016
  Intercompany note receivables.............    294,679              --             --       (294,679)               --

  Property and equipment--at cost:
    Land and buildings......................        135           3,654          6,074             --             9,863
    Aircraft and equipment..................      5,128         173,677        440,042           (110)          618,737
                                            -----------     -----------    -----------    -----------     -------------
                                                  5,263         177,331        446,116           (110)          628,600
  Less:  Accumulated depreciation
      and amortization......................     (2,558)        (81,092)       (83,441)            --          (167,091)
                                            -----------     -----------    -----------    -----------     -------------
                                                  2,705          96,239        362,675           (110)          461,509
  Other assets..............................     10,596          15,871          2,020            111            28,598
                                            -----------     -----------    -----------    -----------     -------------

                                            $   540,620     $   193,749    $   536,227    $  (521,982)    $     748,614
                                            ===========     ===========    ===========    ===========     =============

LIABILITIES AND STOCKHOLDERS' INVESTMENT
  Current liabilities:
    Accounts payable........................$       134     $     5,635    $    26,502    $    (4,676)    $      27,595
    Accrued liabilities.....................      6,883          16,084         39,483           (126)           62,324
    Deferred taxes..........................      1,004              --         17,382             --            18,386
    Current maturities of long-term debt....         --              --         16,492             --            16,492
                                            -----------     -----------    -----------    -----------     -------------
      Total current liabilities.............      8,021          21,719         99,859         (4,802)          124,797

  Long-term debt, less current maturities...    190,922              --         21,248             --           212,170
  Intercompany notes payable................      5,012          12,191        277,350       (294,553)               --
  Other liabilities and deferred credits....        270           2,245            770             --             3,285
  Deferred taxes............................     13,155          37,382         47,232             --            97,769
  Minority interest.........................     12,240              --             --             --            12,240

  Stockholders' investment:
  Common stock..............................        214           4,062             43         (4,105)              214
  Additional paid in capital................    119,667          53,168         13,499        (66,666)          119,668
    Retained earnings.......................    203,847          62,982         72,511       (135,603)          203,737
    Accumulated other comprehensive
      income (loss).........................    (12,728)             --          3,715        (16,253)          (25,266)
                                            -----------     -----------    -----------    -----------     -------------
                                                311,000         120,212         89,768       (222,627)          298,353
                                            -----------     -----------    -----------    -----------     -------------
                                            $   540,620     $   193,749    $   536,227    $  (521,982)    $     748,614
                                            ===========     ===========    ===========    ===========     =============

</TABLE>
                                       9
<PAGE>



NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED

            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
                       NINE MONTHS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>

                                               Parent                         Non-
                                              Company         Guarantor     Guarantor
                                                Only        Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                            ------------    ------------   ------------   ------------    -------------

<S>                                         <C>             <C>            <C>            <C>             <C>
GROSS REVENUE
Operating revenue...........................$       339     $   121,527    $   234,069    $        --     $     355,935
Intercompany revenue........................         --          10,701            218        (10,919)               --
Gain(loss) on disposal of equipment.........        (82)            (34)           774           (110)              548
                                            -----------     -----------    -----------    -----------     -------------
                                                    257         132,194        235,061        (11,029)          356,483
OPERATING EXPENSES
Direct cost.................................          9         101,995        164,683             --           266,687
Intercompany expense........................         --             218         10,701        (10,919)               --
Depreciation and amortization...............        330           7,469         18,348             --            26,147
General and administrative..................      5,732           6,121         11,544             --            23,397
                                            -----------     -----------    -----------    -----------     -------------
                                                  6,071         115,803        205,276        (10,919)          316,231
                                            -----------     -----------    -----------    -----------     -------------

OPERATING INCOME(LOSS)......................     (5,814)         16,391         29,785           (110)           40,252

Earnings from unconsolidated entities.......     16,898              --          4,021        (16,898)            4,021
Interest income.............................     24,441             158          1,882        (24,056)            2,425
Interest expense............................     10,589               9         27,146        (24,056)           13,688
                                            -----------     -----------    -----------    -----------     -------------

INCOME BEFORE PROVISION
  FOR INCOME TAXES AND MINORITY INTEREST....     24,936          16,540          8,542        (17,008)           33,010
Allocation of consolidated income taxes.....      2,047           5,537          2,647             --            10,231
Minority interest...........................     (1,046)             --             --             --            (1,046)
                                            -----------     -----------    -----------    -----------     -------------

NET INCOME..................................$    21,843     $    11,003    $     5,895    $   (17,008)    $      21,733
                                            ===========     ===========    ===========    ===========     =============
</TABLE>

                                       10
<PAGE>



NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                       NINE MONTHS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>

                                                Parent                          Non-
                                                Company      Guarantor       Guarantor
                                                 Only       Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                            -----------     -----------    ------------   ------------   --------------

<S>                                         <C>             <C>            <C>            <C>             <C>
Net cash provided by (used in)
  operating activities......................$    (8,723)    $    17,712    $    40,760    $    (6,823)    $      42,926
                                            -----------     -----------    -----------    -----------     -------------

Cash flows from investing activities:
  Capital expenditures......................       (486)        (17,087)       (13,955)            --           (31,528)
  Proceeds from asset dispositions..........         --              27          1,985             --             2,012
  Investments in subsidiaries...............         --              --         (1,200)            --            (1,200)
                                            -----------     -----------    -----------    -----------     -------------
Net cash provided by (used in)
  investing activities......................       (486)        (17,060)       (13,170)            --           (30,716)
                                            -----------     -----------    -----------    -----------     -------------

Cash flows from financing activities:
  Proceeds from borrowings..................         --              --          9,834         (7,230)            2,604
  Repayment of debt.........................         --              --        (27,238)        14,053           (13,185)
  Issuance of common stock..................      3,597              --             --             --             3,597
                                            -----------     -----------    -----------    -----------     -------------
Net cash provided by (used in)
 financing activities.......................      3,597              --        (17,404)         6,823            (6,984)
                                            -----------     -----------    -----------    -----------     -------------

Effect of exchange rate changes in cash.....         --              --           (939)            --              (939)
                                            -----------     -----------    -----------    -----------     -------------

Net increase (decrease) in cash and
  cash equivalents..........................     (5,612)            652          9,247             --             4,287

Cash and cash equivalents
  at beginning of period....................     14,537           2,323         21,075             --            37,935
                                            -----------     -----------    -----------    -----------     -------------

Cash and cash equivalents
   at end of period.........................$     8,925     $     2,975    $    30,322    $        --     $      42,222
                                            ===========     ===========    ===========    ===========     =============
</TABLE>

                                       11
<PAGE>


NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                 MARCH 31, 2000
<TABLE>
<CAPTION>
                                                Parent                         Non-
                                                Company      Guarantor      Guarantor
                                                 Only       Subsidiaries   Subsidiaries   Eliminations  Consolidated
                                            -----------     ------------   ------------   ------------  ------------
<S>                                         <C>             <C>            <C>            <C>           <C>
ASSETS
  Current assets:
    Cash and cash equivalents...............$    14,537     $     2,323    $    21,075    $        --   $    37,935
    Accounts receivable.....................        280          22,822         75,116         (1,831)       96,387
    Inventories.............................         --          38,023         42,412             --        80,435
    Prepaid expenses........................        227             558          4,940             --         5,725
                                            -----------     -----------    -----------    -----------    -----------
      Total current assets..................     15,044          63,726        143,543         (1,831)      220,482

  Intercompany investment...................    201,410              --             --       (201,410)           --
  Investments in unconsolidated entities....      1,108             229         12,756             --        14,093
  Intercompany note receivables.............    286,388              --          3,844       (290,232)           --

  Property and equipment--at cost:
    Land and buildings......................         --           3,220          7,785             --         11,005
    Aircraft and equipment..................      4,335         155,867        445,747             --        605,949
                                            -----------     -----------    -----------    -----------     ----------
                                                  4,335         159,087        453,532             --        616,954
  Less:  Accumulated depreciation
      and amortization......................     (2,939)        (75,943)       (64,049)            --       (142,931)
                                            -----------     -----------    -----------    -----------     ----------
                                                  1,396          83,144        389,483             --        474,023
  Other assets..............................     11,558          16,700          6,207            111         34,576
                                            -----------     -----------    -----------    -----------     ----------

                                            $   516,904     $   163,799    $   555,833    $  (493,362)    $  743,174
                                            ===========     ===========    ===========    ===========     ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
  Current liabilities:
    Accounts payable........................$       196     $     4,931    $    27,151    $    (1,529)    $   30,749
    Accrued liabilities.....................      6,074          10,028         36,286           (306)        52,082
    Deferred taxes..........................         --              --         18,443             --         18,443
    Current maturities of long-term debt....         --              --         16,540             --         16,540
                                            -----------     -----------    -----------    -----------     ----------
      Total current liabilities.............      6,270          14,959         98,420         (1,835)       117,814

  Long-term debt, less current maturities...    190,922              --         33,816             --        224,738
  Intercompany notes payable................      3,844             379        286,004       (290,227)            --
  Other liabilities and deferred credits....        272           2,223            437             --          2,932
  Deferred taxes............................      9,508          33,564         53,667             --         96,739
  Minority interest.........................     11,911              --             --             --         11,911

  Stockholders' investment:
    Common stock............................        211           4,048          1,384         (5,432)           211
    Additional paid in capital..............    116,074          52,567         15,928        (68,495)       116,074
    Retained earnings.......................    182,004          56,059         65,068       (121,127)       182,004
    Accumulated other comprehensive
      income (loss).........................     (4,112)             --          1,109         (6,246)        (9,249)
                                            -----------     -----------    -----------    -----------     ----------
                                                294,177         112,674         83,489       (201,300)       289,040
                                            -----------     -----------    -----------    -----------     ----------
                                            $   516,904     $   163,799    $   555,833    $  (493,362)    $  743,174
                                            ===========     ===========    ===========    ===========     ==========
</TABLE>
                                       12
<PAGE>


NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED


            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
                       NINE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>

                                               Parent                          Non-
                                               Company       Guarantor      Guarantor
                                                Only        Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                            -----------     ------------   ------------   ------------   --------------

<S>                                         <C>             <C>            <C>            <C>             <C>
GROSS REVENUE
Operating revenue...........................$       244     $    98,580    $   215,942    $        --     $     314,766
Intercompany revenue........................         --           5,907            216         (6,123)               --
Gain on disposal of equipment...............         12           3,136            174             --             3,322
                                            -----------     -----------    -----------    -----------     -------------
                                                    256         107,623        216,332         (6,123)          318,088
OPERATING EXPENSES
Direct cost.................................          3          80,474        173,640             --           254,117
Intercompany expense........................         --             217          5,906         (6,123)               --
Depreciation and amortization...............        131           7,493         17,636             --            25,260
General and administrative..................      3,899           4,481         11,811             --            20,191
                                            -----------     -----------    -----------    -----------     -------------
                                                  4,033          92,665        208,993         (6,123)          299,568
                                            -----------     -----------    -----------    -----------     -------------

OPERATING INCOME(LOSS)......................     (3,777)         14,958          7,339             --            18,520

Earnings from unconsolidated entities.......      1,284              --          3,254         (1,284)            3,254
Interest income.............................     22,186             259          1,038        (21,081)            2,402
Interest expense............................     10,669              --         24,361        (21,081)           13,949
                                            -----------     -----------    -----------    -----------     -------------

INCOME(LOSS) BEFORE PROVISION(BENEFIT)
  FOR INCOME TAXES AND MINORITY INTEREST....      9,024          15,217        (12,730)        (1,284)           10,227
Allocation of consolidated income taxes.....      2,019           5,098         (3,947)            --             3,170
Minority interest...........................     (1,008)             --            (52)            --            (1,060)
                                            -----------     -----------    -----------    -----------     -------------

NET INCOME(LOSS) ...........................$     5,997     $    10,119    $    (8,835)   $    (1,284)    $       5,997
                                             ===========     ===========    ===========    ===========     =============

</TABLE>


                                       13
<PAGE>


NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                       NINE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>


                                                Parent                          Non-
                                                Company      Guarantor      Guarantor
                                                 Only       Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                            -----------     ------------   ------------   ------------   ------------
<S>                                         <C>             <C>            <C>            <C>             <C>
Net cash provided by (used in)
  operating activities......................$    (7,031)    $     5,158    $    34,349    $   (14,320)    $    18,156
                                            -----------     -----------    -----------    -----------     -----------

Cash flows from investing activities:
  Capital expenditures......................       (110)        (12,766)       (41,436)            --         (54,312)
  Proceeds from asset dispositions..........         19           4,947          4,270             --           9,236
  Investments in subsidiaries...............      3,751          (3,751)            --             --              --
                                            -----------     -----------    -----------    -----------     -----------
Net cash provided by (used in)
  investing activities......................      3,660         (11,570)       (37,166)            --         (45,076)
                                            -----------     -----------    -----------    -----------     -----------

Cash flows from financing activities:
  Proceeds from borrowings..................         --              --          6,452             --           6,452
  Repayment of debt.........................    (14,320)             --         (7,360)        14,320          (7,360)
                                            -----------     -----------    -----------    -----------     -----------
Net cash used in financing activities.......    (14,320)             --           (908)        14,320            (908)
                                            -----------     -----------    -----------    -----------     -----------

Effect of exchange rate changes in cash.....         --              --             35             --              35
                                            -----------     -----------    -----------    -----------     -----------

Net increase (decrease) in cash and
  cash equivalents..........................    (17,691)         (6,412)        (3,690)            --         (27,793)

Cash and cash equivalents
  at beginning of period....................     34,775          10,584         25,235             --          70,594
                                            -----------     -----------    -----------    -----------     -----------

Cash and cash equivalents
 at end of period...........................$    17,084     $     4,172    $    21,545    $        --    $     42,801
                                            ===========     ===========    ===========    ===========    ============
</TABLE>
                                       14
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The Company,  through its Air Logistics'  subsidiaries  ("Air Log") and
with its investment in Bristow Aviation Holdings Limited ("Bristow"), is a major
supplier of helicopter transportation services to the worldwide offshore oil and
gas industry.  The Company also provides  production  management services to the
domestic  offshore  oil and gas industry  through its wholly  owned  subsidiary,
Grasso Production Management, Inc. ("GPM").

RESULTS OF OPERATIONS

         A summary of operating  results and other income statement  information
for the applicable periods is as follows (in thousands of dollars):
<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  DECEMBER 31,                   DECEMBER 31,
                                                            -------------------------     --------------------------
                                                               2000           1999            2000          1999
                                                            -----------   -----------     -----------    -----------

<S>                                                         <C>           <C>             <C>            <C>
Operating revenue.......................................... $   122,101   $   103,371     $   355,935    $   314,766
Gain on disposal of assets.................................          15         1,795             548          3,322
Operating expenses.........................................     107,542        96,095         316,231        299,568
                                                            -----------   -----------     -----------    -----------

Operating income...........................................      14,574         9,071          40,252         18,520

Earnings from unconsolidated entities......................       2,122         1,067           4,021          3,254
Interest income (expense), net.............................      (3,726)       (3,885)        (11,263)       (11,547)
                                                            -----------   -----------     -----------    -----------

Income before provision for income taxes...................      12,970         6,253          33,010         10,227
Provision for income taxes.................................       4,015         1,935          10,231          3,170
Minority interest..........................................        (352)         (351)         (1,046)        (1,060)
                                                            -----------   -----------     -----------    -----------

Net income................................................. $     8,603   $     3,967     $    21,733    $     5,997
                                                            ===========   ===========     ===========    ===========
</TABLE>


         The following  tables set forth certain  operating  information,  which
will form the basis  for  discussion  of each of the  Company's  two  identified
segments,  Helicopter Activities and Production Management and Related Services.
Beginning in fiscal year 2000, the Company has changed the basis of segmentation
within  its  Helicopter   Activities  segment.   The  respective   international
operations  of  Air  Log  (headquartered  in  the  United  States)  and  Bristow
(headquartered  in the United  Kingdom)  are managed and  reported as a separate
division.  The  International  division  encompasses  all helicopter  activities
outside of the United  States Gulf of Mexico and Alaska  (reported as "Air Log")
and the  United  Kingdom  and  Europe  Sectors  of the  North Sea  (reported  as
"Bristow").
<PAGE>
                                       15
<TABLE>
<CAPTION>

                                                                          THREE MONTHS ENDED
                                                                             DECEMBER 31,
                                                                  -----------------------------------
                                                                       2000                  1999
                                                                  ------------           ------------
                                                                  (in thousands, except flight hours)
<S>                                                               <C>                    <C>
Flight hours (excludes unconsolidated entities):
   Helicopter Activities:
      Air Log...............................................           30,485                 24,952
      Bristow...............................................           12,320                 11,210
      International.........................................           21,386                 14,795
                                                                  -----------            -----------
         Total..............................................           64,191                 50,957
                                                                  ===========            ===========

Operating revenues:
   Helicopter Activities:
       Air Log..............................................      $    32,175            $    23,998
       Bristow..............................................           44,897                 42,330
       International........................................           35,156                 27,324
       Less:  Intercompany..................................           (1,665)                  (445)
                                                                  -----------            -----------
         Total..............................................          110,563                 93,207
   Production management and related services...............           12,367                 10,785
   Corporate................................................            2,684                  2,406
   Less:  Intersegment......................................           (3,513)                (3,027)
                                                                  -----------            -----------
         Consolidated total.................................      $   122,101            $   103,371
                                                                  ===========            ===========

Operating income, excluding gain or loss on disposal of assets:
   Helicopter Activities:
       Air Log..............................................      $     4,820            $     3,450
       Bristow..............................................            2,100                   (831)
       International........................................            7,140                  3,595
                                                                  -----------            -----------
         Total..............................................           14,060                  6,214
   Production management and related services...............              505                    661
   Corporate................................................               (6)                   401
                                                                  -----------            -----------
         Consolidated total.................................      $    14,559            $     7,276
                                                                  ===========            ===========

Gross margin, excluding gain or loss on disposal of assets:
   Helicopter Activities:
       Air Log..............................................           15.0%                  14.4%
       Bristow..............................................            4.7%                  (2.0)%
       International........................................           20.3%                  13.2%
         Total..............................................           12.7%                   6.7%
   Production management and related services...............            4.1%                   6.1%
         Consolidated total.................................           11.9%                   7.0%


</TABLE>
                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                         NINE MONTHS ENDED
                                                                            DECEMBER 31,
                                                                  -----------------------------------
                                                                       2000                  1999
                                                                  ------------           ------------
                                                                  (in thousands, except flight hours)

<S>                                                               <C>                    <C>
Flight hours (excludes unconsolidated entities):
   Helicopter Activities:
      Air Log...............................................           87,253                 77,371
      Bristow...............................................           39,611                 41,672
      International.........................................           59,270                 41,572
                                                                  -----------            -----------
         Total..............................................          186,134                160,615
                                                                  ===========            ===========

Operating revenues:
   Helicopter Activities:
       Air Log..............................................      $    90,149            $    70,969
       Bristow..............................................          134,589                140,268
       International........................................          101,894                 76,092
       Less:  Intercompany..................................           (4,296)                  (601)
                                                                  -----------            -----------
         Total..............................................          322,336                286,728
   Production management and related services...............           35,871                 29,786
   Corporate................................................            8,034                  6,877
   Less:  Intersegment......................................          (10,306)                (8,625)
                                                                  -----------            -----------
         Consolidated total.................................      $   355,935            $   314,766
                                                                  ===========            ===========

Operating income, excluding gain or loss on disposal of assets:
   Helicopter Activities:
       Air Log..............................................      $    14,331            $     9,954
       Bristow..............................................            5,001                 (4,413)
       International........................................           19,982                  7,693
                                                                  -----------            -----------
         Total..............................................           39,314                 13,234
   Production management and related services...............            1,834                  1,816
   Corporate................................................           (1,444)                   148
                                                                  -----------            -----------
         Consolidated total.................................      $    39,704            $    15,198
                                                                  ===========            ===========

Gross margin, excluding gain or loss on disposal of assets:
   Helicopter Activities:
       Air Log..............................................           15.9%                 14.0%
       Bristow..............................................            3.7%                 (3.1)%
       International........................................           19.6%                 10.1%
         Total..............................................           12.2%                  4.6%
   Production management and related services...............            5.1%                  6.1%
         Consolidated total.................................           11.2%                  4.8%



</TABLE>


                                       17
<PAGE>


         HELICOPTER ACTIVITIES

         Air Log and Bristow conduct  helicopter  activities  principally in the
Gulf of Mexico and the North Sea,  respectively,  where they provide  support to
the  production,   exploration  and  construction  activities  of  oil  and  gas
companies.  Air Log also charters helicopters to governmental  entities involved
in regulating offshore oil and gas operations in the Gulf of Mexico and provides
helicopter  services to the Alyeska  Pipeline in Alaska.  Bristow also  provides
search and rescue work for the British Coast Guard.  International's  activities
include Air Log and Bristow's respective  operations in the following countries:
Australia, Brazil, China, Colombia, India, Kazakhstan,  Kosovo, Mexico, Nigeria,
Spain, The Maldives and Trinidad.  These international operations are subject to
local  governmental  regulations and to  uncertainties of economic and political
conditions  in those  areas.  International  also  includes  Air  Log's  service
agreements  with,  and equity  interests in,  entities that operate  aircraft in
Brazil, Egypt and Mexico ("unconsolidated entities").

     Operating revenues from helicopter  activities increased by 18.6% and 12.4%
during the three and nine months ended December 31, 2000, respectively, over the
prior year  comparable  periods,  with operating  expenses  increasing  3.5% and
10.9%,  respectively.  Higher levels of exploration  and development by domestic
oil companies and an increase in international contracts in the current year, as
compared to the fiscal year 2000 periods, led to the improvement, along with the
impact  in  fiscal  2000 of the loss of two  major  customers  in the  North Sea
effective  August 1, 1999.  Flight  activity  in the Gulf of Mexico and  certain
international markets began increasing during the fourth quarter of fiscal 2000,
and has continued this trend throughout fiscal year 2001.

     Air  Log's  flight  activity  for the three and  nine-month  periods  ended
December  31,  2000 is above the  similar  prior year levels by 22.2% and 12.8%,
respectively.  An increase in activity was  prevalent in both the Gulf of Mexico
market  and  Alaska.  Revenues  for  the  same  periods  were  up 34%  and  27%,
respectively.  The  disproportionate  increase  in revenue in relation to flight
hours was due to a shift in the mix of aircraft generating revenue, coupled with
rate increases of approximately 6% in the Gulf of Mexico, which went into effect
beginning February 1, 2000. Flight hours and revenue generated from larger, crew
change aircraft in the Gulf of Mexico increased 32% and 50%, respectively,  from
the  similar  quarter  in the prior  year,  while  smaller,  production  related
aircraft increased 20% and 22%,  respectively.  For the nine month period flight
hours and revenue  generated  from larger,  crew change  aircraft in the Gulf of
Mexico increased 28% and 44%, respectively,  over the prior year, while smaller,
production  related  aircraft  increased  10% and 16%,  respectively.  Air Log's
operating margin of 15.0% and 15.9% for the three and nine months ended December
31, 2000 has improved over the comparable prior year periods,  which had margins
of 14.4% and 14.0%, respectively.  Increased maintenance and other costs lowered
the operating margin for the quarter as compared to the year-to-date margin.

         During  October 2000,  Air Log was awarded a contract to provide all of
the  helicopter  services for a Gulf of Mexico  production  management  services
company.  The  contract,  which was fully phased in by late  November,  involves
eighteen (18) helicopters and generated  revenues of approximately  $2.4 million
during the current quarter. Previously, Air Log had five (5) aircraft contracted
to this customer.

         Bristow's  revenue for the three and nine-month  periods ended December
31, 2000 increased by 6.1% and decreased by 4.0%, respectively, from the similar
periods in the prior year.  Bristow's  flight hours for the three and nine-month
periods  ended  December  31,  2000  increased  by 9.9% and  decreased  by 4.9%,
respectively, from the similar periods in the prior year. The decrease in flight
activity and revenue for the  nine-month  period is the net result of a decrease
in North Sea flight hours,  primarily related to the cessation of contracts with
two major customers on August 1, 1999,  offset by an increase in flight hours in
Norway.  These  aforementioned  contracts accounted for $11.9 million of revenue
during the nine months  ended  December  31, 1999.  Bristow's  operating  margin
improved to 4.7% and 3.7% for the three and  nine-month  periods ended  December
31, 2000, from (2.0)% and (3.1)%,  respectively,  in the prior year periods.  At
September  30, 1999,  $5.0 million was reflected in that  quarter's  results for
restructuring  charges  for the  North Sea  operations.  Absent  these  charges,
Bristow's  operating  margin for the  nine-month  period ended December 31, 1999
would have increased to less than 1%. The  improvement in margin during the nine
months ended December 31, 2000,  after  considering  the  restructuring  charges
discussed  above, is due to increased flying on a spot basis, an increase in the
spot  rates  charged,  and  the  effect  of  cost  cutting  measures  previously
implemented.  The operating  margin for the nine months ended December 31, 2000,
is impacted by employee  severance costs of $1.5 million  recognized  during the
first  quarter  of  fiscal  2001.  These  severance  costs  were the  result  of
management's  continuing  review of Bristow's  North Sea  operations and support
functions elsewhere in the U.K. Absent these charges, Bristow's operating margin
for the nine months ended December 31, 2000, would have been 4.8%.

                                       18
<PAGE>

         Internationally,  flight  hours  increased  during  the  three and nine
months  ended  December  31, 2000,  by 44.5% and 42.6%,  respectively,  from the
similar periods in the prior year.  Revenues also increased  accordingly  during
the  three  and  nine  months  ended  December  31,  2000 by  28.7%  and  33.9%,
respectively,  from the  similar  periods  in the prior  year.  An  increase  in
activity was prevalent in Brazil, China, Mexico and Nigeria. In Nigeria revenues
were up 3% and 5% over the prior year three and  nine-month  periods as drilling
activities  in Nigeria  improved  during the past year.  During March 2000,  the
Company's  49% owned  affiliate  in Mexico was awarded a $75 million  three year
contract to provide helicopter  transportation  services to the Federal Electric
Commission  of  Mexico.  Most of the  aircraft  needed to fulfill  the  contract
requirements are being leased from the Company. The start up of the contract was
in phases over a two-month  period,  which began March 31, 2000,  and  generated
revenue of approximately  $3.0 and $8.0 million during the three and nine months
ended December 31, 2000. During the current year, the Company imported a seventh
aircraft  to Brazil to cover the  increased  ad hoc  flying  resulting  from the
international oil companies expanding into the Brazilian market. Also during the
current  year,  the Company  completed its $1.2 million  investment,  subject to
approval by relevant government authorities, in a local Brazilian operator. This
investment  will serve to secure Air Log's  presence  in Brazil and  enhance the
local operator's ability to do business with the international oil companies.

         PRODUCTION MANAGEMENT AND RELATED SERVICES

         Operating  revenues  for GPM  increased  by 14.7% and 20.4%  during the
three and nine-month periods ended December 31, 2000, as compared to the similar
periods in the prior year.  The increase in revenue is  primarily  due to higher
energy prices,  which resulted in increased  production  activity in the Gulf of
Mexico.  GPM was also awarded two significant  contracts,  which help to account
for higher  revenue for the  current  year.  GPM's  margin  declined  during the
current quarter primarily due to increased employee benefit costs.

         CORPORATE AND OTHER

         General  and  administrative  expense  increased  during the three- and
nine-month  periods  ended  December  31,  2000,   primarily  due  to  increased
compensation  costs  related  to  the  Company's   performance  based  incentive
compensation plan costs. Additionally, the nine-month period also included costs
incurred to review a potential  reorganization  of the Company's legal operating
structure.  Earnings  from  unconsolidated  subsidiaries  increased  during  the
current  quarter  primarily  due to the  resumption  of  distributions  from the
Company's  Mexican joint  venture.  For the nine months ended  December 31, 2000
earnings  from  unconsolidated  entities  increased  due  to  the  distributions
discussed  above offset by lower earnings  reported by Bristow's  training joint
venture.   The  effective  income  tax  rate  from  continuing   operations  was
approximately 31% for the nine months ended December 31, 2000 and 1999.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash  equivalents  were $42.2  million as of December  31, 2000, a
$4.3 million  increase from March 31, 2000.  Working  capital as of December 31,
2000 was $116.7  million,  a $14.0 million  increase from March 31, 2000.  Total
debt was $228.7 million as of December 31, 2000.

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<PAGE>

     As of December 31, 2000,  Bristow had a (pound)15  million ($22.4  million)
revolving  credit facility with a syndicate of United Kingdom banks that matures
on February 28, 2001. As of December 31, 2000,  Bristow had  (pound)0.6  million
($0.8 million) of letters of credit  utilized and no funds were drawn under this
credit  facility.  As of  December  31,  2000,  the  Company  had a $20  million
unsecured  working  capital line of credit with a bank that expires on September
30,  2001.  No funds were drawn under this  facility as of  December  31,  2000.
Management  believes that its normal  operations,  lines of credit and available
financing  will provide  sufficient  working  capital and cash flow to meet debt
service needs for the foreseeable  future.  Management also believes that credit
facilities  with similar terms will be obtained  before the  expiration of above
facilities.

     During the nine months  ended  December  31,  2000,  the  Company  received
proceeds of $2.0  million  primarily  from the sale of  non-aviation  assets and
purchased  two Bell 412's for $10.0  million,  two Bell 407's for $2.2  million,
three S76's for $3.5  million,  twelve  206L's for $4.7 million and seven 206B's
for $2.0  million to fulfill  customer  contract  requirements.  These  aircraft
acquisitions  were made with  existing  cash.  The Company has a  commitment  to
acquire  six-(6)  new  Bell  407  helicopters  for $9.0  million  with  delivery
scheduled during the first quarter of calendar 2001.

     During the nine months  ended  December  31,  1999,  the  Company  received
proceeds of $9.2 million from nine  separate  disposals of aircraft.  During the
same  period,  the Company  purchased  seven Bell 407's for $9.2  million,  four
S-61's for $11.0  million,  two S-76's for $4.5  million,  one Bell 412 for $4.3
million and three  Super  Puma's for $20.4  million.  In  addition,  the Company
placed $4.0 million into escrow,  included in other assets as of March 31, 2000,
for the purchase of three S-76 aircraft.  Of the S-76's,  only two were acquired
and the unused escrowed funds were returned to the Company during fiscal 2001.

LEGAL MATTERS

     The Company  has  received  notices  from the United  States  Environmental
Protection  Agency that it is one of approximately  160 potentially  responsible
parties ("PRP") at one Superfund site in Texas, one of over 300 PRPs at one site
in Louisiana and a PRP at one site in Rhode Island. The Company believes,  based
on presently  available  information,  that its potential liability for clean up
and other response costs in connection  with these sites is not likely to have a
material adverse effect on the Company's business or financial condition.

RECENT ACCOUNTING PRONOUNCEMENTS

     In December 1999, the  Securities  and Exchange  Commission  released Staff
Accounting Bulletin No. 101, Revenue  Recognition in Financial  Statements ("SAB
101"),  providing  the SEC's view with respect to the  application  of generally
accepted  accounting  principles  to selected  revenue  recognition  issues.  As
amended,  SAB 101 will become  effective for the fourth  quarter of fiscal 2001.
The Company is currently  assessing the impact of SAB 101 and currently believes
that the  effect,  if any,  will not have a  material  effect  on the  Company's
financial position or results of operations."

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities" which establishes  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that entities  recognize all  derivatives as either assets or liabilities in the
statements of financial  position and measure those  instruments  at fair value.
Changes in a derivative's fair value are to be recognized  currently in earnings
unless specific hedge accounting  criteria are met. The Company will be required
to adopt SFAS No.  133, as amended by SFAS No. 137, no later than April 1, 2001.
The  Company  does  not  use  derivative   instruments  or  hedging   activities
extensively  in its business and therefore the adoption of this new statement is
not expected to materially affect the Company's financial position or results of
operations.  The new statement could however cause  volatility in the components
of other comprehensive income.


                                       20
<PAGE>


FORWARD LOOKING STATEMENTS

     This report  contains  "forward-looking  statements"  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements
included  herein other than  statements of historical  fact are  forward-looking
statements.

     Although  the Company  believes  that the  expectations  reflected  in such
forward-looking  statements are  reasonable,  it can give no assurance that such
expectations will prove to be correct. Important factors that could cause actual
results  to  differ  materially  from the  Company's  expectations  ("Cautionary
Statements") may include,  but are not limited to, demand for Company  services,
worldwide  activity levels in oil and natural gas  exploration,  development and
production,  fluctuations  in oil and natural gas prices,  unionization  and the
response   thereto   by  the   Company's   customers,   currency   fluctuations,
international  political conditions and the ability to achieve reduced operating
expenses.   All   subsequent   written  and  oral   forward-looking   statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by the Cautionary Statements.

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       No material changes from the 2000 annual report disclosures.



                PART II - OTHER INFORMATION

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

  (b) Reports on Form 8-K:
      There were no Form 8-K filings during the quarter ended December 31, 2000.


                                       21
<PAGE>



                                   SIGNATURES


         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 thereunto duly authorized.

                            OFFSHORE LOGISTICS, INC.

                                  BY:/s/ GEORGE M. SMALL
                                     ----------------------------------
                                     GEORGE M. SMALL
                                     President and Chief Operating Officer

                                  DATE: February 14, 2001



                                      /s/ H. EDDY DUPUIS
                                  BY: ----------------------------------
                                      H. EDDY DUPUIS
                                      Vice President and Chief Financial Officer

                                  DATE: February 14, 2001

