SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549
                                     
                                 FORM 10-Q
                                     
              QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934
                                     
                   For Quarter Ended September 30, 1995
                                     
                       Commission File Number 1-6512
                                     
                       AIRBORNE FREIGHT CORPORATION
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)
                                     
                                 Delaware
                 ----------------------------------------
                 (State of incorporation or organization)
                                     
                                91-0837469
                     ---------------------------------
                     (IRS Employer Identification No.)

                            3101 Western Avenue
                               P.O. Box 662
                      Seattle, Washington 98111-0662
                      ------------------------------
                  (Address of Principal Executive Office)

Registrant's telephone number, including area code:    (206) 285-4600
                                                       --------------

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                         Yes: XXX       No:
                              ---            ---

Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the close of the period covered by this report.

     Common Stock, par value $1 per share

     Outstanding (net of 315,150 treasury shares)
        as of September 30, 1995                    21,050,336 shares
                                                    -----------------

<TABLE>
               AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF NET EARNINGS
               (Dollars in thousands except per share data)
                                (Unaudited)
                                     
<CAPTION>
                                          Three Months Ended             Nine Months Ended
                                             September 30                  September 30
                                          ------------------             -----------------
                                           1995        1994              1995        1994
                                           ----        ----              ----        ----
<S>                                     <C>         <C>               <C>         <C>
REVENUES:                                                                         
  Domestic                              $468,275    $415,417          $1,363,083  $1,219,958
  International                           92,290      74,327             273,338     220,880
                                        --------    --------          ----------  ----------
                                         560,565     489,744           1,636,421   1,440,838
                                                                                  
OPERATING EXPENSES:                                                               
  Transportation purchased               196,566     164,745             582,077     482,277
  Station and ground operations          171,649     147,915             507,575     438,056
  Flight operations and maintenance       81,738      73,046             239,110     204,282
  General and administrative              39,767      35,898             114,280     108,166
  Sales and marketing                     14,490      13,679              46,371      41,011
  Depreciation and amortization           36,134      34,763             105,782     101,837
                                        --------    --------          ----------  ----------
                                         540,344     470,046           1,595,195   1,375,629
                                        --------    --------          ----------  ----------
                                                                                  
     EARNINGS FROM OPERATIONS             20,221      19,698              41,226      65,209
INTEREST, NET                              7,343       6,212              21,032      18,222
                                        --------    --------          ----------  ----------
     EARNINGS BEFORE INCOME TAXES         12,878      13,486              20,194      46,987
                                                                                  
INCOME TAXES                               5,176       5,341               8,350      18,779
                                        --------    --------          ----------  ----------
     NET EARNINGS                          7,702       8,145              11,844      28,208
PREFERRED STOCK DIVIDENDS                     69         105                 208         792
                                        --------    --------          ----------  ----------
                                                                                  
     NET EARNINGS AVAILABLE TO COMMON   $  7,633    $  8,040          $   11,636  $   27,416
SHAREHOLDERS
                                        ========    ========          ==========  ==========
                                                                                  
NET EARNINGS PER COMMON SHARE           $    .36    $    .38          $      .55  $     1.31
                                        ========    ========          ==========  ==========
                                                                                  
DIVIDENDS PER COMMON SHARE              $   .075    $   .075          $     .225  $     .225
                                        ========    ========          ==========  ==========
<FN>
              See notes to consolidated financial statements.
</TABLE>

<TABLE>
               AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)
                                     
<CAPTION>                                   September 30   December 31
                                            ------------   -----------
                  ASSETS                        1995           1994
                  ------                        ----           ----
                                            (Unaudited)   
<S>                                        <C>            <C>
CURRENT ASSETS:                                           
  Cash                                     $   14,137     $   10,318
  Trade accounts receivable, less             239,576        221,788
allowance of $7,650 and $7,500
  Spare parts and fuel inventory               31,004         28,071
  Deferred income tax assets                   13,838         12,458
  Prepaid expenses                             21,958         20,701
                                           ----------     ----------
     TOTAL CURRENT ASSETS                     320,513        293,336
                                                          
PROPERTY AND EQUIPMENT, NET                   830,845        766,346
                                                          
EQUIPMENT DEPOSITS and OTHER ASSETS            21,675         18,824
                                           ----------     ----------
TOTAL ASSETS                               $1,173,033     $1,078,506
                                           ==========     ==========
                                                          
   LIABILITIES AND SHAREHOLDERS' EQUITY                   
   ------------------------------------                   
CURRENT LIABILITIES:                                      
  Accounts payable                         $  121,627     $  117,194
  Salaries, wages and related taxes            39,669         43,858
  Accrued expenses                             66,036         59,053
  Income taxes payable                          2,142            342
  Current portion of debt                       6,435          6,018
                                           ----------     ----------
     TOTAL CURRENT LIABILITIES                235,909        226,465
                                                          
LONG-TERM DEBT                                361,317        279,422
                                                          
SUBORDINATED DEBT                             115,000        118,580
                                                          
DEFERRED INCOME TAX LIABILITIES                32,548         30,402
                                                          
OTHER LIABILITIES                              28,656         31,239
                                                          
REDEEMABLE PREFERRED STOCK                      3,948          5,000
                                                          
SHAREHOLDERS' EQUITY:                                     
  Preferred Stock, without par value -                    
    Authorized 5,200,000 shares, no shares                
issued
  Common stock, par value $1 per share -                  
    Authorized 60,000,000 shares                          
    Issued 21,365,486 and 21,285,924           21,366         21,286
shares
  Additional paid-in capital                  185,647        184,369
  Retained earnings                           189,613        182,714
                                           ----------     ----------
                                              396,626        388,369
  Treasury stock, 315,150 shares, at cost        (971)          (971)
                                           ----------     ----------
                                              395,655        387,398
                                           ----------     ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,173,033     $1,078,506
                                           ==========     ==========
<FN>
              See notes to consolidated financial statements.
</TABLE>

<TABLE>
               AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollars in thousands)
                                (Unaudited)
<CAPTION>           
                                              Nine Months Ended
                                                 September 30
                                               ----------------
                                               1995         1994
                                               ----         ----
<S>                                        <C>          <C>
OPERATING ACTIVITIES:                                   
  Net Earnings                             $ 11,844     $ 28,208
  Adjustments to reconcile net earnings to              
net cash provided by operating activities:
     Depreciation and amortization           98,224       94,511
     Provision for aircraft engine            7,558        7,326
overhauls
     Deferred income taxes                      766        1,213
     Other                                   (2,470)      (2,316)
                                           --------     --------
  CASH PROVIDED BY OPERATIONS               115,922      128,942
                                                        
     Change in:                                         
       Receivables                          (17,788)     (14,795)
       Inventories and prepaid expenses      (4,190)       3,000
       Accounts payable                       4,433       16,442
       Accrued expenses, salaries and         4,594        3,755
taxes payable
                                           --------     --------
  NET CASH PROVIDED BY OPERATING            102,971      137,344
ACTIVITIES                                 
                                                        
INVESTING ACTIVITIES:                                   
  Additions to property and equipment      (167,541)    (125,861)
  Disposition of property and equipment         904          913
  Expenditures for engine overhauls          (6,060)      (3,064)
  Other                                         520         (653)
                                           --------     --------
  NET CASH USED IN INVESTING ACTIVITIES    (172,177)    (128,665)
                                                        
FINANCING ACTIVITIES:                                   
  Proceeds from bank note borrowings, net   (12,100)      37,100
  Proceeds from debt issuance               107,461           --
  Principal payments on debt                (17,693)     (39,578)
  Proceeds from common stock issuance           306        2,805
  Dividends paid                             (4,949)      (5,518)
                                           --------     --------
  NET CASH PROVIDED (USED) BY FINANCING      73,025       (5,191)
ACTIVITIES
                                           --------     --------
                                                        
NET INCREASE IN CASH                          3,819        3,488
                                                        
CASH AT JANUARY 1                            10,318        7,134
                                           --------     --------
CASH AT SEPTEMBER 30                       $ 14,137     $ 10,622
                                           ========     ========
<FN>
              See notes to consolidated financial statements.
</TABLE>

               AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            September 30, 1995
                                (Unaudited)


NOTE A--SUMMARY OF FINANCIAL STATEMENT PREPARATION:

     The consolidated financial statements included herein are unaudited
but include all adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position and results of
operations and cash flows for the interim periods reported.

     Certain amounts for prior periods have been reclassified to conform to
the 1995 presentation.

NOTE B--LONG-TERM DEBT:

<TABLE>
Long-term debt consists of the following:

<CAPTION>
                                            September 30   December 31
                                            ------------   ------------
                                                1995           1994
                                                ----           ----
                                                  (In thousands)
<S>                                        <C>            <C>
Senior debt:                                              
  Revolving bank credit                      $100,000       $135,000
  Notes payable                                39,900         17,000
  Senior notes                                200,000        100,000
  Revenue bonds                                13,200         13,200
  Other debt                                   11,072         16,670
                                             --------       --------
                                              364,172        281,870
Subordinated debt:                                        
  Senior subordinated notes                     3,580          7,150
  Convertible subordinated debentures         115,000        115,000
                                             --------       --------
                                              118,580        122,150
                                             --------       --------
Total long-term debt                          482,752        404,020
Less current portion                            6,435          6,018
                                             --------       --------
                                             $476,317       $398,002
                                             ========       ========
</TABLE>

NOTE C--EARNINGS PER COMMON SHARE:

     Primary earnings per common share are based upon the weighted average
number of common shares outstanding during the interim period plus dilutive
common equivalent shares applicable to the assumed exercise of outstanding
stock options.  Fully diluted earnings per share for the three and nine
months ended September 30, 1995 and 1994 are the same as primary earnings
per share.

<TABLE>
Average shares outstanding used in earnings per share computations were as
follows:
<CAPTION>
                              Three Months Ended   Nine Months Ended
                              ------------------   -----------------
                                 September 30      September 30
                                 ------------      ------------
                               1995       1994       1995       1994
                               ----       ----       ----       ----
<S>                          <C>        <C>        <C>        <C>
AVERAGE SHARES OUTSTANDING     21,196     21,288     21,186     20,955
                                                            
</TABLE>

                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               RESULTS OF OPERATIONS AND FINANCIAL CONDITION
                                     
RESULTS OF OPERATIONS:

     The Company's operating performance in the third quarter of 1995
resulted in significantly higher operating income and net earnings compared
to the first and second quarters of the year.  Operating results were
positively impacted by improving shipment yields and lower average costs
per shipment handled.  Shipment yields improved due to several factors: an
increase in the average weight per shipment in the latter part of the
quarter; stronger growth in the overnight express product; and, rate
increases imposed in specific customer segments.  Productivity gains were a
major contributor to the 4.6% improvement in the average cost per shipment
handled, when compared to last years third quarter.

     Net earnings available to common shareholders for the third quarter of
1995 were $7.6 million, or $.36 per share, compared to $8.0 million, or
$.38 per share for the third quarter of 1994.  Net earnings available to
common shareholders for the first nine months of 1995 were $.55 per share
compared to $1.31 per share for the comparable period of 1994.

<TABLE>
     The following table sets forth selected shipment and revenue data for
the comparative periods indicated:
<CAPTION>
                                Three Months Ended    Nine Months Ended
                                ------------------    ----------------
                                   September 30          September 30
                                   ------------          ------------
                                 1995       1994       1995       1994
                                 ----       ----       ----       ----
<S>                            <C>        <C>        <C>        <C>
Shipments (in thousands):                                       
   Domestic                                                     
     Overnight                                                  
       Letters                   9,393      8,571     27,540     25,545
       0-2 Lbs.                 12,689     11,128     36,910     32,918
       3-99 Lbs.                11,211      9,877     32,192     29,175
                               -------    -------    -------    -------
                                33,293     29,576     96,642     87,638
     Select Delivery Service                                    
       0-2 Lbs.                 14,933     10,808     43,394     30,506
       3-99 Lbs.                 8,310      6,475     24,129     18,281
                               -------    -------    -------    -------
                                23,243     17,283     67,523     48,787
       100 Lbs. and over            78         89        240        265
                               -------    -------    -------    -------
     Total Domestic             56,614     46,948    164,405    136,690
                               -------    -------    -------    -------
   International                                                
     Express                     1,037        891      2,986      2,554
     All Other                     140        120        412        354
                               -------    -------    -------    -------
   Total International           1,177      1,011      3,398      2,908
                               -------    -------    -------    -------
   Total Shipments              57,791     47,959    167,803    139,598
                               =======    =======    =======    =======
                                                                
Average Pounds per Shipment:                                    
   Domestic                        4.5        4.8        4.5        4.8
   International                  61.2       60.0       63.7       62.1
                                                                
Average Revenue per Pound:                                      
   Domestic                    $  1.80    $  1.83    $  1.81    $  1.87
   International               $  1.29    $  1.23    $  1.27    $  1.22
                                                                
Average Revenue per Shipment:                                   
   Domestic                    $  8.24    $  8.85    $  8.27    $  8.92
   International               $ 78.41    $ 73.52    $ 80.44    $ 75.96

</TABLE>

   Total shipments increased 20.2% in the first nine months of 1995
compared to 16.4% in the first nine months of 1994.  Total revenues
increased 13.6% in the first nine months of 1995 compared to 15.0% in 1994.

   Domestic shipments increased 20.3% in the first nine months of 1995
compared to 16.5% for the same period of 1994.  Domestic shipments
increased 20.6% in the third quarter of 1995 compared to 15.5% in 1994.
Domestic shipment growth during the first nine months of 1995 was
positively impacted by the higher growth rate for overnight shipments, than
in prior periods, particularly in the third quarter of 1995 when overnight
shipments increased 12.6% compared to 5.5% in the corresponding period of
1994.  Also growth in the Company's deferred service products which provide
next afternoon and second-day delivery service continues to aid domestic
growth.  For the first nine months of 1995, deferred service accounted for
over 41.1% of total domestic shipments, compared to 35.7% for the first
nine months of 1994.

   Domestic revenues increased 11.7% in the first nine months of 1995 and
12.7% in the third quarter of 1995 compared to 12.1% and 9.8% in the nine
month period and third quarter of 1994, respectively.  Third quarter 1995
domestic revenue growth was positively impacted by the significant growth
in higher yielding overnight shipments.  The Company also initiated a yield
enhancement program with rate increases on specific business segments being
initiated during the third quarter, with additional rate increases planned
for the fourth quarter and in 1996.  Furthermore, the average weight per
shipment was stable during the third quarter and actually increased during
the latter part of the quarter.  These factors all combined to produce a
more stable domestic yield environment in the third quarter compared to the
first and second quarters of 1995.

   International shipments increased 16.9% in the first nine months of 1995
compared to 11.2% in 1994, and 16.4% in the third quarter of 1995 compared
to 13.3% in the corresponding period of 1994.  The growth in international
shipments was aided by the relatively balanced growth in higher yielding
freight as well as express shipments.  International revenues increased
23.7% in the first nine months of 1995 compared to 34.0% in 1994 and for
the third quarter of 1995 and 1994 increased 24.2% and 32.9%, respectively.
International revenue per shipment and the average weight per shipment
increased during the first nine months of 1995 compared to the
corresponding 1994 period, as a result of the sustained growth in higher
yielding freight shipments.

   Operating expenses as a percentage of revenues were 97.5% for the first
nine months of 1995 compared to 95.5% in the first nine months of 1994 and
95.5% for all of 1994.  Operating cost per shipment handled decreased 3.5%
to $9.51 for the first nine months of 1995 compared to the corresponding
1994 period.  The operating cost per shipment for the third quarter of 1995
decreased 4.6% to $9.35, compared to the third quarter of 1994 and
decreased 2.7% from the second quarter of 1995.  The Company experienced a
7.0% improvement in productivity for the third quarter of 1995 as measured
by shipments handled per paid employee hour.  Comparisons of certain
operating expense components are discussed below.

   Transportation purchased increased as a percentage of revenues to 35.6%
in the first nine months of 1995 compared to 33.5% in 1994.  This increase
was primarily due to additional commercial airline costs resulting from the
growth in international freight shipments discussed above.

   Station and ground expense as a percentage of revenues in the first nine
months of 1995 was 31.0% compared to 30.4% in the first nine months of
1994.  Productivity gains helped offset inflationary pressures on costs.

   Flight operations and maintenance expense as a percentage of revenues
during the first nine months of 1995 was 14.6%, compared to 14.2% in the
first nine months of 1994.  The average aviation fuel price for the first
nine months of 1995 was $.59 per gallon, which was also the average price
per gallon in the corresponding period of 1994.  Aviation fuel consumption
increased to 103 million gallons in the first nine months of 1995, a 14.4%
increase compared to the first nine months of 1994.  The increase in fuel
consumption is a result of additional Company operated aircraft placed in
service since the third quarter of 1994.

   The increased number of aircraft in service also accounted for the
increase in depreciation and amortization expense which, as a percentage of
revenues in the first nine months of 1995 was 6.5%, compared to 7.1% for
the corresponding period in 1994.

   General and administrative and sales and marketing expenses on a
combined basis decreased as a percentage of revenues in the first nine
months of 1995 compared to 1994.  This was primarily the result of
continuing productivity gains and a strong focus on all discretionary
spending.

   Interest expense in the first nine months of 1995 was higher than the
corresponding period of 1994.  This increase was the result of higher
average outstanding borrowings combined with higher effective interest
rates.

   The Company's effective tax rate was 41.3% in the first nine months of
1995 compared to 40.0 in the first nine months of 1994 and 39.6% for all of
1994.  The higher effective tax rate for the first nine months of 1995 was
the result of certain taxes and nondeductible expenses that are not
directly related to the level of earnings.

LIQUIDITY AND CAPITAL RESOURCES:

   Capital expenditures and associated financing continue to be the primary
factors affecting the financial condition of the Company.  The Company
anticipates total capital expenditures to approximate $220 to $225 million
in 1995, of which a significant portion is related to the acquisition and
modification of aircraft.  During the first nine months of 1995, total
capital expenditures net of dispositions were $167 million.  The principal
sources of liquidity for financing capital expenditures during the first
nine months of 1995 were cash provided by operations and financing under
the Company's bank lines of credit.

   The Company's $250 million unsecured revolving bank credit agreement has
traditionally been used as a major source of liquidity for periods between
other financing transactions.  The Company also has available $65 million
under unsecured uncommitted money market lines of credit with several
banks, used in conjunction with the revolving credit agreement to
facilitate settlement and accommodate short-term borrowing fluctuations.
At September 30, 1995, a total of $139.9 million was outstanding under the
revolving bank credit and money market credit lines.

   In September, 1995 the Company issued $100 million of 7.35% notes due
September 15, 2005.  The net proceeds from this transaction were used to
pay down the Company's bank lines of credit, and replaced floating rate
debt with a fixed rate.

   In August, 1995 the Company's long term senior debt classification was
downgraded by Standard & Poor's from "BBB+" to "BBB", citing the pressure
on domestic yields as the primary factor.  Moody's rating of "Baa3"
remained unchanged.

   In management's opinion, the available capacity under the bank credit
agreements coupled with internally generated cash flow from remaining 1995
operations should provide adequate flexibility to finance anticipated
capital expenditures for the balance of 1995.
                                     
                        PART II. OTHER INFORMATION
                        --------------------------

Item 6.   Exhibits and Reports or Form 8-K.

          (a)  Exhibits
               Exhibit No. 27 - Financial Data Schedule

          (b)  Reports on Form 8-K - A Form 8-K dated September 18, 1995,
               has been duly filed.  The form included the following
               information:

               (1)  Provided notice that on September 18, 1995, Airborne
                    Freight Corporation sold $100,000,000 aggregate
                    principal amount of 7.35% Notes due September 15, 2005.

               (2)  Provided opinion of counsel regarding the legality of
                    issuance of $100,000,000 of notes of Airborne Freight
                    Corporation as well as guarantees of notes by certain
                    wholly-owned subsidiaries.

                                SIGNATURES
                                ----------

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized:

                                        AIRBORNE FREIGHT CORPORATION
                                        ----------------------------
                                                  (Registrant)

<TABLE>

<CAPTION>
<S>       <C>                             <C>
Date:                11/14/95             /s/Roy C. Liljebeck
                     --------             -------------------
                                          Roy C. Liljebeck
                                          Executive Vice President,
                                          Chief Financial Officer
                                          
Date:                11/14/95             /s/Lanny H. Michael
                     --------             -------------------
                                          Lanny H. Michael
                                          Senior Vice President,
                                          Treasurer and Controller
</TABLE>