In this paper, we present a model-based observer for inertial navigation of quadrotors and other multirotor aircraft. We include in our model a Coriolis term that has been neglected in prior work. Doing so allows us to estimate the entire velocity vector in the quadrotor's frame of reference|including along the z-axis of this frame|with data only from a low-cost inertial measurement unit (IMU): something that has not been demon- strated previously. An observability analysis predicts that our proposed observer will perform well. Experimental results over 110 flight trials verify this prediction, showing that our proposed observer achieves lower root mean square error than three other state- of-the-art model-based observers.