UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

 [ ]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended _________________

                                       OR

 [X]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934

For the transition period from January 1, 1998 to April 3, 1998

Commission file number      0-27100

                          FIELDS AIRCRAFT SPARES, INC.
                          ----------------------------
        (Exact name of small business issuer as specified in its charter)

           UTAH                                       95-4218263
------------------------------                     ------------------
State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization                      Identification No.)

                2251-A Ward Avenue, Simi Valley, California 93005
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (805) 583-0080
                ------------------------------------------------
                (Issuer's telephone number, including area code)

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

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 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 X No


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
          of common equity, as of the latest practicable date.

      Class of Stock                                Amount Outstanding
----------------------------                   ------------------------
$.05 par value Common Shares                   2,383,648 Common Shares
                                                      at May 12, 1998

            TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one):
                                 Yes _____ No X


<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

                                TABLE OF CONTENTS

                                                                      Page No.

Part I - Financial Information

         Item 1.  Consolidated Financial Statements

                           Balance Sheet....................................3
                           Statement of Operations..........................4
                           Statement of Cash Flows..........................5
                           Statement of Shareholders' Equity................6
                           Notes to Financial Statements....................7


         Item 2.  Management's Discussion and Analysis of
                           Financial Condition and Results of
                           Operations......................................20


Part II. - Other Information

         Item 1.  Legal Proceedings........................................23
         Item 2.  Changes in Securities....................................23
         Item 3.  Defaults upon Senior Securities..........................23
         Item 4.  Submission of Matters to a Vote
                           of Security Holders.............................23
         Item 5.  Other Information........................................24
         Item 6.  Exhibits and Reports on Form 8-K.........................24


                                        2
<PAGE>
<TABLE>
<CAPTION>

                          FIELDS AIRCRAFT SPARES, INC.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS
                    AS OF APRIL 3, 1998 AND DECEMBER 31, 1997

                                   A S S E T S
                                                                              1998                    1997
                                                                              ----                    ----
CURRENT ASSETS:
<S>                                                                     <C>                       <C>        
     Cash and cash equivalents                                          $   3,720,000             $ 6,071,000
     Accounts receivable, less allowance for doubtful
         accounts of $160,000 in 1998 and $100,000
         in 1997                                                            3,641,000               1,955,000
     Inventory                                                             12,319,000              11,058,000
     Prepaid expeses                                                          239,000                 191,000
                                                                         ------------             -----------
                  Total current assets                                   $ 19,919,000             $19,275,000
                                                                         ------------             -----------

LAND, BUILDING AND EQUIPMENT:
     Land                                                                $    210,000             $   210,000
     Building and building improvements                                     1,079,000               1,065,000
     Furniture and equipment                                                1,798,000                 565,000
                                                                         ------------             -----------
                  Totals                                                 $  3,087,000             $ 1,840,000
     Less accumulated depreciation and amortization                         1,293,000                 830,000
                                                                         ------------             -----------
                      Land, building and equipment, net                  $  1,794,000             $ 1,010,000
                                                                         ------------             -----------

OTHER ASSETS:
     Debt issuance costs, net of accumulated
         amortization                                                    $  1,145,000             $ 1,267,000
     Goodwill, net of accumulated amortization                              2,715,000
     Other assets                                                              43,000                 629,000
                                                                         ------------             -----------
                  Total other assets                                     $  3,903,000             $ 1,869,000
                                                                         ------------             -----------
                      Total assets                                       $ 25,616,000             $22,181,000
                                                                         ============             ===========

                                          LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                    $  1,844,000             $ 1,239,000
     Other accrued liabilities                                                638,000                 241,000
     Current portion of notes and capital
         leases payable                                                        40,000                  55,000
                                                                         ------------             -----------
                  Total current liabilities                              $  2,522,000             $ 1,535,000
                                                                         ------------             -----------

LONG-TERM LIABILITIES                                                    $ 16,188,000             $15,047,000
                                                                         ------------             -----------

SHAREHOLDERS= EQUITY:
     Common stock                                                        $    362,000             $   351,000
     Additional paid-in capital                                             8,145,000               6,959,000
     Retained deficit                                                      (1,601,000)             (1,711,000)
                                                                         ------------             -----------
                  Total shareholders' equity                             $  6,906,000             $ 5,599,000
                                                                         ------------             -----------
                      Total liabilities and shareholders'
                         equity                                          $ 25,616,000             $22,181,000
                                                                         ============             ===========
</TABLE>
                                       3
<PAGE>
<TABLE>
<CAPTION>

                                               FIELDS AIRCRAFT SPARES, INC.

                                      UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                FOR THE THREE MONTHS ENDED APRIL 3, 1998 AND MARCH 31, 1997




                                                                                1998                      1997
                                                                                ----                      ----

<S>                                                                        <C>                       <C>             
SALES                                                                      $     5,596,000           $      2,089,000
COST OF SALES                                                                    3,775,000                  1,235,000
                                                                           ---------------           ----------------

GROSS PROFIT                                                               $     1,821,000           $        854,000
OPERATING EXPENSES                                                               1,235,000                    844,000
                                                                           ---------------           ----------------
INCOME FROM OPERATIONS                                                     $       586,000           $         10,000
 INTEREST EXPENSE, NET                                                             473,000                    664,000
                                                                           ---------------           ----------------

INCOME (LOSS) BEFORE PROVISION FOR
    INCOME TAXES                                                           $       113,000           $       (654,000)

PROVISION FOR INCOME TAXES                                                           3,000                   -
                                                                           ---------------           ----------------

NET INCOME (LOSS)                                                          $       110,000           $       (654,000)
                                                                           ===============           ================

NET INCOME (LOSS) PER SHARE (fully-diluted
    basis)                                                                 $           .06           $           (.29)
                                                                           ===============           ================

NET INCOME (LOSS) PER SHARE (primary basis)                                $           .04           $           (.29)
                                                                           ===============           ================
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>

                                            FIELDS AIRCRAFT SPARES, INC.

                                     UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE THREE MONTHS ENDED APRIL 3, 1998 AND MARCH 31, 1997


                                                                                       1998                   1997
                                                                                       ----                   ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>                      <C>             
     Net income (loss)                                                       $        110,000         $      (654,000)
     Adjustments to reconcile net income (loss) to net
        cash (used in) provided by  operating activities:
     Depreciation and amortization                                                     71,000                  31,000
     Amortization of goodwill and debt issuance costs                                 167,000                 230,000
     (Increase) decrease in accounts receivable                                    (1,686,000)                129,000
     Increase in inventory                                                         (1,261,000)               (289,000)
     (Increase) decrease in prepaid expenses                                          (48,000)                 19,000
     Increase in other assets                                                         (15,000)
     Increase in accounts payable                                                     605,000                 526,000
     Increase in other accrued liabilities                                            397,000                 343,000
                                                                              ---------------         ---------------

        Net cash (used in) provided by operating activities                   $    (1,660,000)        $       335,000
                                                                              ---------------         ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment                                                    $      (855,000)        $        (1,000)
     Acquisition of goodwill                                                       (2,760,000)
                                                                              ---------------         ---------------

        Net cash used in investing activities                                 $    (3,615,000)        $        (1,000)
                                                                              ---------------         ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings (payments) on line of credit                              $     1,041,000         $       (89,000)
     Principal payments on notes and capital leases
        payable                                                                       (50,000)                (35,000)
     Costs associated with issuance of notes payable                                                         (115,000)
     Borrowing on notes and capital leases payable                                    135,000
     Proceeds from issuance of common stock                                         2,055,000                  81,000
     Costs associated with the issuance of common stock                              (257,000)               (132,000)
                                                                              ---------------         ---------------

        Net cash provided by (used in) financing activities                   $     2,924,000         $      (290,000)
                                                                              ---------------         ---------------

NET (DECREASE) INCREASE IN CASH                                               $    (2,351,000)        $        44,000

CASH AND CASH EQUIVALENTS, December 31, 1997
   and 1996                                                                         6,071,000                  88,000
                                                                              ---------------         ---------------

CASH AND CASH EQUIVALENTS, April 3, 1998 and
   March 31, 1997                                                             $     3,720,000         $       132,000
                                                                              ===============         ===============
</TABLE>

                                       5
<PAGE>
<TABLE>
<CAPTION>

                                              FIELDS AIRCRAFT SPARES, INC.

                                      UNAUDITED STATEMENTS OF SHAREHOLDERS' EQUITY
                               FOR THE THREE MONTHS ENDED APRIL 3, 1998 AND MARCH 31, 1997




                                                  COMMON STOCK

                                          NUMBER OF                              ADDITIONAL                             TOTAL
                                           SHARES                                 PAID-IN           RETAINED        SHAREHOLDERS'
                                         OUTSTANDING            AMOUNT            CAPITAL            DEFICIT            EQUITY
                                         -----------            ------            -------            -------            ------
<S>                                      <C>              <C>              <C>               <C>                  <C>         
BALANCES, December 31, 1997                2,079,571        $  351,000       $  6,959,000      $  (1,711,000)       $  5,599,000

Issuance of common stock                     210,664            11,000          1,186,000                              1,197,000

Net income                                                                                           110,000             110,000
                                           ---------        ----------       ------------      -------------        ------------

BALANCES, April 3, 1998                    2,290,235        $  362,000       $  8,145,000      $  (1,601,000)       $  6,906,000
                                           =========        ==========       ============      =============        ============


BALANCES, December 31, 1996                1,302,137        $  312,000       $  5,065,000      $  (1,564,000)       $  3,813,000

Issuance of common stock                      10,781             1,000           (101,000)                              (100,000)

Net loss                                                                                            (654,000)           (654,000)
                                           ---------        ----------       ------------      -------------        ------------

BALANCES, March 31, 1997                   1,312,918        $  313,000       $  4,964,000      $  (2,218,000)       $  3,059,000
                                           =========        ==========       ============      =============        ============
</TABLE>
                                       6
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies

         a.       Principles of consolidation and company background

                  The  consolidated  Group  financial   statements  include  the
accounts of Fields Aircraft Spares,  Inc. (FASI),  a Utah  corporation,  and its
wholly-owned   subsidiaries  Fields  Aircraft  Spares  Incorporated   (FASC),  a
California  corporation,  Flightways  Manufacturing,  Inc. (FMI) and Fields Aero
Management,  Inc. All significant  intercompany  accounts and activity have been
eliminated.

                  The Group distributes new aircraft parts and equipment for use
on international and domestic commercial and military aircraft and purchases and
sells parts on a brokerage basis.

         b.       Concentration of credit risk

                  Substantially  all of the Group's trade  accounts  receivables
are due from companies in the aviation  industry  located  throughout the United
States and  internationally.  The Group performs periodic credit  evaluations of
its  customers'  financial  condition  and does not require  collateral.  Credit
losses  relating to customers in the airline  industry  have  consistently  been
within management's expectations.

         c.       Concentration of sales

                  The Group had sales to foreign  companies that amounted to 14%
and 17% of total  sales for the three  months  ended April 3, 1998 and March 31,
1997, respectively.

                  For the  three  months  ended  April 3,  1998,  two  customers
accounted for sales of $582,000 and  $768,000.  For the three months ended March
31, 1997, two customers accounted for sales of $273,000 and $135,000.

          d.       Cash and cash equivalents

                  For  purposes  of the  statement  of  cash  flows,  the  Group
considers all highly liquid  investments  purchased with an original maturity of
three months or less to be a cash equivalent.

                  The Group  currently  maintains cash in bank deposit  accounts
which exceeds  federally  insured  limits.  The Company has not  experienced any
losses in such accounts and believes it is not exposed to any significant  risks
on  cash  in  bank  deposit  accounts.  Uninsured  balances  were  approximately
$2,888,000 as of April 3, 1998.

                                       7
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

         e.       Inventory

                  Inventory is valued at the lower of cost or market value using
the first-in,  first-out method.  Where a group of parts were purchased together
as a lot,  the  cost  of the  lot  was  allocated  to the  individual  parts  by
management  pro  rata  to the  list  selling  price  at the  time  of  purchase.
Consistent with industry  practice,  inventory is carried as a current asset but
all inventory is not expected to be sold within one year.

                  Inventory  consisted of the  following as of April 3, 1998 and
December 31, 1997:

                                          1998                        1997
                                          ----                        ----

         Raw materials             $          389,000        $
         Work-in-process                      218,000
         Finished goods                    11,712,000               11,058,000
                                         ------------               ----------

                      Totals       $       12,319,000        $      11,058,000
                                    =================               ==========

         f.       Land, building and equipment

                  Land,   building   and   equipment   are   recorded  at  cost.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets which range from 3 to 25 years.

                  The cost and related accumulated depreciation and amortization
of assets sold or  otherwise  retired are  eliminated  from the accounts and any
gain or loss is included in the statement of operations. The cost of maintenance
and repairs is charged to income as incurred,  whereas significant  renewals and
betterments  are  capitalized.  Depreciation  expense for the three months ended
April 3, 1998 and March 31, 1997 amounted to $71,000 and $31,000, respectively.

                  Long-term  assets of the Company are  reviewed  annually as to
whether their  carrying  value has income  impaired,  pursuant to the guidelines
established  in Statement of Financial  Accounting  Standards  ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived  Assets and Long-Lived Assets to be
Disposed Of".  Management  considers assets to be impaired if the carrying value
exceeds the future projected cash flows from related operations. Management also
re-evaluates the periods of amortization to determine whether  subsequent events
and circumstances warrant revised estimates of useful lives. As of April 3, 1998
management expects these assets to be fully recoverable.

                                       8
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

         g.       Debt issuance costs

                  Gross debt issuance costs of $1,459,000  less  amortization of
$314,000 at April 3, 1998 relate to the issuance of new financing.  Amortization
of debt  issuance  costs for the three  months ended April 3, 1998 and March 31,
1997  amounted to $122,000 and $230,000,  respectively.  The costs are amortized
using the straight-line method over the life of the respective loans.

         h.       Revenue recognition

                   The Group  recognizes  revenue  from all types of sales under
the accrual method of accounting  when title  transfers.  Title transfers at the
Group's facility.

         i.       Earnings per share

                  In March  1995,  FASI's  shareholders  authorized  the reverse
split of its  common  stock on the basis of fifty old  shares for one new share.
This reverse split was effective as of November 1995.  All references  herein to
the number of shares are after the reverse split.

                  Fully-diluted  earnings per share was computed using 3,506,323
and  2,249,589  shares for the three  months  ended  April 3, 1998 and March 31,
1997, respectively.

         j.       Income taxes

                  The Group  files  consolidated  income tax  returns.  Deferred
income taxes relate to temporary  differences  between  financial  statement and
income tax reporting of certain  accrued  expenses,  bad debts,  inventory,  and
depreciation.

                  The Group adopted Statement of Financial  Accounting Standards
No. 109,  "Accounting  for Income Taxes".  SFAS 109 requires the  recognition of
deferred tax liabilities and assets for the expected future tax  consequences of
temporary  differences between tax basis and financial reporting basis of assets
and liabilities.  The income tax effect of the temporary differences as of April
3, 1998 and December 31, 1997 consisted of the following:

                                                         1998          1997
        Deferred tax liability resulting from
            taxable temporary differences for
            accounting for inventory                $  (314,000)   $  (314,000)
        Deferred tax liability resulting from
            taxable temporary differences for
            accounting for depreciation                 (19,000)

                                       9
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



1.       Summary of significant accounting policies (continued)

         j.       Income taxes (continued)


                                                          1998         1997
                         ----
        Deferred tax asset resulting from
          deductible temporary differences
          for allowance for doubtful accounts        $   32,000     $    6,000
        Deferred tax asset resulting from
          deductible temporary differences for
          product warranty costs                          3,000
        Deferred tax asset resulting from deductible
          temporary differences for accrued
          expenses                                        5,000
        Deferred tax asset resulting from
          deductible temporary differences
          for utilization of net operating loss
          carryforwards for income tax purposes       1,078,000      1,078,000
        Valuation allowance resulting from the
          potential nonutilization of net operating
          loss carryforwards for income tax
          purposes                                     (785,000)      (770,000)
                                                     ----------     ----------

                Total deferred income taxes          $     -        $     -
                                                     ==========     ==========

         k.       Employee benefit plan

                  FASC has a 401(k) Plan under  Section  401(k) of the  Internal
Revenue Code.  The Plan allows all employees who are not covered by a collective
bargaining agreement to defer up to 25% of their compensation on a pre-tax basis
through  contributions  to the  Plan.  Contributions  to the  Plan by  FASC  are
discretionary  and are  determined by the Board of Directors.  No  contributions
were made to the Plan during the three  months ended April 3, 1998 and March 31,
1997.

         l.       Use of estimates

                  The  preparation  of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Management believes that the estimates utilized in preparing
its financial statements are reasonable and prudent. Actual results could differ
from these estimates.

                                       10
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

          m. Change in accounting period

                  In March  1998,  the Company  elected to change its  reporting
year to a 52-53 week year ending on the Friday which  includes the last business
day in  December,  with  each  quarter  being  reported  in a  similar  fashion.
Accordingly,  this  financial  statement  includes the  activities for the first
quarter of 1998 ending on April 3.


2.       Shareholders' equity

                  FASI has  50,000  shares  authorized  of its  $.001  par value
preferred stock. At April 3, 1998 and December 31, 1997, there were no shares of
preferred stock issued or outstanding.

                  FASI has the following common  stock as of  April 3,  1998 and
December 31, 1997:
                                                         1998           1997
                                                         ----           ----

                  Authorized                          5,000,000      5,000,000
                  Issued and outstanding              2,290,235      2,079,571
                  Par value                                $.05           $.05

                  In  February  1995,  the Group owed  $7,658,000  to  McDonnell
Douglas  Corporation  (MDC). MDC canceled the debt in exchange for $850,000 plus
586,862 shares of Series A convertible preferred stock of FASC. This constituted
full and complete  satisfaction of the MDC debt. The agreement  provided for the
mandatory  exchange of the Series A preferred stock of FASC for 25% of the total
outstanding  common stock of FASI within 10 days  following  the date the common
stock is  approved  for  quotation  on, and is quoted for trading on, the Nasdaq
Stock Market.

                  FASI's  common shares began  quotation on the Nasdaq  SmallCap
Market  on  March  26,  1997.  On April 4,  1997  the MDC  Series A shares  were
exchanged by MDC for 564,194 common shares of FASI.

                  In 1996,  FASI sold 317,785 shares of common stock and 158,893
warrants.  Each warrant  allows the holder to purchase one share of common stock
for $6.25.  The net proceeds were  $1,654,000  after deducting costs of $481,000
for underwriting and issuance.

                                       11
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


2.       Shareholders' equity (continued)

                  In April 1997, the Group's  wholly-owned  subsidiaries entered
into separate Loan and Security Agreements for an aggregate of up to $10,000,000
with NationsCredit  Commercial Funding  ("NationsCredit") at an interest rate of
prime plus 3%. In connection with the NationsCredit  loan facility,  FASI issued
NationsCredit  an option to acquire  40,000  common shares of FASI at a price of
$6.25 per share.

                  In addition,  during 1997, FASI issued 31,574 shares of common
stock and 41,128 warrants.  Each warrant allows the holder to purchase one share
of  common  stock for  $6.25.  FASI  issued  another  15,000 of common  stock in
association with the issue of $10,000,000 at 8.50% subordinated debentures.

                  In September 1997,  FASI closed the sale of these  $10,000,000
Subordinated  Redeemable  Debentures  due 2000 issued  under an  Indenture  with
Etablissement  Pour le Placement  Prive as Trustee.  The Securities were sold in
reliance  on  Regulation  S of the  Securities  Act of  1933 to  entities  which
represented to FASI to be accredited non-U.S. persons.

                  The  Debenture  holders  have a  one-time  right  at any  time
between December 29, 1997 and September 27, 2000, subject to prior redemption or
repurchase,  to  convert  up to 30% of the  principal  amount  of such  holder's
Debentures into Common Shares at a conversion  price equal to 85% of the average
closing price of the Common Shares  during the  20-trading  day period ending on
the date of notice of conversion, but in no event less than $12.00 per share. In
the event that during any 20-day trading  period,  the average  closing price of
the Common  Shares  equals or exceeds  $12.00 per share,  FASI may  require  the
conversion of up to 20% of the principal amount of outstanding Debentures at the
Conversion  Price.  Pursuant  to this,  in  November  1997,  FASI  required  the
conversion  of $2,000,000 of Debentures in exchange for 166,666 of common shares
at $12.00 per share.

                  The  Debentures  are  redeemable,  in whole or in part, at the
option  of the  Group,  at any time on or after  March  31,  1999 at 100% of the
principal amount plus accrued interest.

                  In  February  1998,  the  Group  entered  into a  Supplemental
Indenture  to the  Indenture  with  Etablissement  Pour le  Placement  Prive  as
trustee,  relating to the 8.5% Subordinated  Redeemable  Debenture due 2000. The
Supplemental  Indenture  provides that the Debenture  holders have the following
additional rights: at any time between February 20, 1998 and June 30, 1998, each
holder  may  convert  20% of the  original  principal  amount  of such  holder's
Debentures  into Common Shares at a conversion  price of $9.75 per share; at any
time between February 20, 1998 and September 30, 1998, each holder may convert

                                       12
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS




2.       Shareholders' equity (continued)

an additional 20% of the original  principal amount of such holder's  Debentures
into  Common  Shares at a  conversion  price of $11.00  per  share;  at any time
between  February 20, 1998 and  December  31,  1998,  each holder may convert an
additional 20% of the original principal amount of such holder's Debentures into
Common Shares at a conversion price of $13.00 per share.

                  In February 1998, the Group received and accepted subscription
agreements  for the sale of 210,664  shares of common stock and 52,666  warrants
for  approximately  $2,055,000.  Each warrant  allows the holder to purchase one
share of common  stock for  $13.00.  The  Securities  were sold in  reliance  on
Regulation S of the Securities Act of 1933 to entities which represented to FASI
to be accredited non-U.S. persons.


3.       Notes and capital leases payable

                  The notes and  capital  leases  payable  at April 3,  1998 and
December 31, 1997 consisted of the following:
<TABLE>
<CAPTION>

                                                                                       1998               1997
                                                                                       ----               ----
<S>                                                                                 <C>                <C>
Subordinated debenture with fixed interest at 8.50%
    per annum, payable semi-annually, due 2000                                      $   8,000,000      $   8,000,000
Note payable to NationsCredit, secured by all
    assets of the Group, interest at prime plus 3.0%
    (11.5% at March 31, 1998 and December 31, 1997),
    payable monthly, due 2000                                                           8,088,000          7,047,000
Capital lease payable, secured by equipment, monthly
    payments of $841 including interest at 16.6%, due
    May 2002                                                                               31,000
Capital lease payable, secured by equipment, monthly
    payments of $1,176 including interest at 9.5%, due
    June 2001                                                                              40,000
Capital lease payable, secured by equipment, monthly
    payments of $1,313 including interest at 9.6%, due
    August 2002                                                                            56,000
Other notes payable                                                                        13,000             55,000
                                                                                    -------------      -------------
             Total notes and capital leases payable                                 $  16,228,000      $  15,102,000
Less current portion                                                                       40,000             55,000
                                                                                    -------------      -------------

                Notes and capital leases payable, net of
                     current portion                                                $  16,188,000      $  15,047,000
                                                                                    =============      =============
</TABLE>


                                       13
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


3.       Notes and capital leases payable (continued)

                  Principal  payment  requirements on all notes payable based on
terms explained above are as follows:

                  YEAR ENDING
                    MARCH 31,                           AMOUNT

                       1999                      $      40,000
                       2000                         16,119,000
                       2001                             34,000
                       2002                             27,000
                       2003                              8,000
                       Thereafter                         -


                  Total  interest  expense  including the  amortization  of debt
issuance  costs  for the three  months  ended  April 3, 1998 and March 31,  1997
amounted to $481,000 and  $664,000,  respectively.  Total  interest paid for the
three  months  ended April 3, 1998 and March 31, 1997  amounted to $525,000  and
$434,000, respectively.


4.       Provision for income taxes

                  The  provision  for income  taxes for the three  months  ended
April 3, 1998 and March 31, 1997 consisted of the following:


                                                        1998            1997
          CURRENT:
             State                              $       3,000      $      -
                                                -------------      -----------
                  Total provision for income
                       taxes                    $       3,000      $      -
                                                =============      ===========


                  Total  income  taxes paid in 1998 and 1997  amounted to $3,000
each year.  The Group has net  operating  loss  carryovers  available  to offset
future taxable  income.  The amount and expiration date of the carryovers are as
follows:

                                       14
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


4.       Provision for income taxes (continued)


                  YEAR ENDING
                  DECEMBER 31,           FEDERAL                STATE

                         1998           $                    $   750,000
                         1999                                    580,000
                         2000                                    126,000
                         2001                                    110,000
                         2008                942,000              70,000
                         2009              1,161,000
                         2010                255,000
                         2011                225,000
                         2012                140,000

5.       Commitments

                  The Group  leases  facilities  and  vehicles  under  operating
leases and  subleases a facility to a third party.  The minimum  lease  payments
required under the leases as of April 3, 1998 are as follows:

             YEAR ENDING            OPERATING LEASES       OPERATING LEASES
                MARCH 31,                EXPENSE                 INCOME

                    1999              $   789,000             $  156,000
                    2000                  900,000                 78,000
                    2001                  900,000
                    2002                  900,000
                    2003                  756,000

                  Lease  expense  for the three  months  ended April 3, 1998 and
March 31, 1997 was $73,000 and $34,000, respectively. Lease income for the three
months ended April 3, 1998 was $39,000.


6.       Related party transactions

                  The Group leases a small overseas  office  facility on a month
to month basis from an entity owned by certain officers of the Group.

                                       15
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


 7.       Stock option plans

                  In November 1995, FASI adopted a Management  Stock Option Plan
("Management  Plan") and Employee Stock Option Plan ("Employee Plan").  Pursuant
to the Management Plan, FASI has issued options to five individuals  involved in
the  management  of FASI to  acquire  up to  69,025  common  shares of FASI at a
purchase  price of $3.00  per  share  subject  to  vesting  requirements,  which
includes FASI  obtaining  sales during a 12-month  period of  $7,500,000  and an
average  closing  price for FASI's  Common  Shares for a  three-month  period of
$6.00,  $9.00 and $12.00,  respectively,  for each  one-third  of the options to
vest. The options must vest by November 1998 and must be exercised  within three
years of vesting.  Pursuant to the  Employee  Plan,  FASI has issued  options to
acquire 13,500 common shares of FASI to 20 employees of FASI at a purchase price
of $3.00 per share subject to vesting requirements, which include FASI obtaining
sales during a 12-month  period of  $7,500,000  and at least one year  continued
employment after the grant of the option. The options must vest by November 1998
and must be exercised within two years of vesting.

                  In April 1997,  FASI issued  options to employees of the Group
to acquire up to 100,000 common shares of FASI at an exercise price of $6.25 per
share.  Half of the options will vest in April 1998 and the remaining  half will
vest in April 1999. The options expire in April 2000.

                  In August 1997,  FASI issued options to employees of the Group
to acquire up to 270,000  common  shares of FASI at an exercise  price of $10.00
per share.  The options will vest if the Group meets the  following  conditions;
the Group must raise at least  $7,500,000 in additional  debt or equity  capital
and the Group must have sales of at least  $14,000,000  in any 12-month  period.
Half of the  options  will vest no earlier  than August 1998 with the other half
vesting no earlier than August,  1999.  The  conditions  must be met by June 30,
1999 and the options will expire three years after the vesting date.

                  In August 1997,  FASI issued options to employees of the Group
to acquire up to 89,500 common shares of FASI at an exercise  price of $8.25 per
share.  Half of the options will vest in August 1998 and the remaining half will
vest in August 1999. The options expire in August 2002.

                  The Company granted share options to certain key employees and
executives on the following dates:

                                       16
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


 7.       Stock option plans (continued)

                  On January 16, 1998,  Group A: 10,000 common shares at a price
of $8.35 per share.  Half of the  options  will vest on January 15, 1999 and the
remainder  will vest on January 14, 2000.  The options  will expire  January 16,
2003 and Group B: 40,000  common shares at a price of $8.35 per share subject to
certain vesting requirements. Subject to satisfaction of performance conditions,
half of the options vest on January 15, 1999,  and the remainder vest on January
15, 2000. The options expire three years after vesting.

                  On February  13,  1998,  119,600  common  shares at a price of
$10.00 per share subject to vesting  requirements.  Subject to  satisfaction  of
performance  conditions,  half of the options vest on February 12, 1999, and the
remainder vest on February 11, 2000. The options expire on February 13, 2003.

                  On March 16, 1998,  5,000  options of which half vest on March
15, 1999 and the remainder vest on March 15, 2000,  subject to  performance  and
expire March 16, 2003.

                  The Group  accounts for stock  options  under the provision of
APB Opinion 25  "Accounting  for Stock  Issued to  Employees".  Accordingly,  no
compensation  cost  has  been  recognized  for  its  stock  option  grants.  Had
compensation  cost for the Group's stock option grants been determined  based on
the fair value at the grant dates  consistent  with the method of FASB Statement
123  "Accounting  for  Stock-Based  Compensation",  the  Group's  net income and
earnings  per share would have been reduced to the pro forma  amounts  indicated
below for the three  months  ended April 3, 1998 (March 31, 1997 amounts are not
affected):


                  Net income (loss)         As reported         $  110,000
                                                                ==========

                                            Pro forma           $ (330,000)
                                                                ==========
                  Primary earnings
                     per share              As reported         $      .04
                                                                ==========

                                            Pro forma           $     (.11)
                                                                ==========
                  Fully-diluted earnings
                     per share              As reported         $      .06
                                                                ==========

                                            Pro forma           $     (.07)
                                                                ==========

                                       17
<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


 7.       Stock option plans (continued)

                  The fair value of each option grant was  estimated on the date
of grant  using  the  Black-Scholes  option-pricing  model  with  the  following
assumptions  for the April  1997,  August 7, 1997 and  August 28,  1997  grants,
respectively: risk-free interest rates of 6.4%, 5.7% and 6.0%; expected lives of
two years for all three grants;  and volatility of 78% for all three grants. For
all the 1998 grants,  risk-free  interest  rates  ranging from 5.3% to 5.6% were
used, with expected lives of two years and volatility of 73% for all grants.

                  The first  condition  for vesting of the August 7, 1997 option
grant was met in September  1997. The Group met the second vesting  condition of
sales of $14,000,000 in any 12-month  period in March 1998.  Accordingly,  it is
assumed these options will vest at the earliest possible date.

                  The  fair  value  of  the  November   1995  option  grant  was
determined to be immaterial.  Accordingly, the effect of these options on income
is not included in the above pro forma amounts.


8.       Contingency

                  In the  event of the death of a  Director  or  Officer  of the
Group,  the Group is obligated to pay up to 100% of the  Director's or Officer's
annual  compensation to their beneficiary within the twelve months subsequent to
their death.


9.       Acquisition

                  In January  1998,  the  Group  completed  the  acquisition  of
Flightways  Manufacturing,   Inc.  (FMI).  FMI  is  a  manufacturer  of  plastic
replacement components for commercial aircraft seats and interiors.

                  Each share of FMI tendered  into the offer was  exchanged  for
cash.  The total  cost of the  acquisition  excluding  liabilities  assumed  was
approximately  $2,866,000.  The acquisition was accounted for as a purchase. The
purchase  price was  allocated to the assets  acquired and  liabilities  assumed
based on their  estimated fair values.  The assets,  liabilities  and results of
operations  for FMI is included  with those of the Group as of April 3, 1998 and
for the three months then ended.

                                       18
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


9.       Acquisition (continued)

                  The excess of the purchase price over the net assets  acquired
and liabilities assumed, of approximately  $2,760,000 is being amortized over 15
years.  Amortization  of  goodwill  for the  three  months  ended  April 3, 1998
amounted to $45,000.


 10.      Subsequent event

                  In April  1998,  the Group  acquired  100% of the  issued  and
outstanding shares of Skylock Industries, Inc. (Skylock) by paying approximately
$750,000 in cash,  retiring  approximately  $100,000 in Skylock debt and issuing
approximately  60,000 common shares of FASI.  Eighty  percent of the cash amount
was paid and eighty  percent  of the  shares  were  issued at the  closing.  The
remainder  will be paid in one  year,  with the cash  amount  to be paid and the
number of shares to be issued based on Skylock's  customer  order volume between
April 1, 1998 and March 31, 1999.

                                       19
<PAGE>


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

QUARTERS ENDED APRIL 3, 1998 AND MARCH 31, 1997

         On March 30,  1998,  the  Company  changed  its fiscal year to a 52- or
53-week  year  ending on Friday of the  calendar  week which  contains  the last
business day of December.  This report  contains  financial  information for the
first  quarter of the fiscal  year  consisting  of the  transition  period  from
January 1, 1998 to April 3, 1998.  The  comparable  period for the prior year is
the calendar quarter ended March 31, 1997.

         Operations  of the Company and its  subsidiaries  for the quarter ended
April 3, 1998  generated  income of $586,000,  compared to  operating  income of
$10,000  for the  comparable  period of 1997.  The  increase  in income  for the
current quarter is attributable to an increase in sales resulting in an increase
in the dollar amount of gross profit.

         Net sales for the quarter ended April 3, 1998 were $5,596,000  compared
to $2,089,000  for the  comparable  period of 1997, an increase of $3,507,000 or
approximately  168%.  This increase in sales  included an increase of $1,944,000
across the broad range of the Company's  products and  $1,563,000 as a result of
the  inclusion of sales of  Flightways  Manufacturing,  Inc.  ("Flightways"),  a
wholly-owned Company acquired in January 1998.

         Flightways' firm backlog at April 3, 1998 was approximately $3,400,000,
compared to approximately $1,200,000 at March 31, 1997.

         Cost of sales for the  quarter  ended  April 3, 1998 and March 31, 1997
were $3,775,000 and $1,235,000 respectively  (approximately 67% and 59% of sales
respectively).  The reduction in gross margin percentage is a result of a change
in the product mix of sales of the Company and also the inclusion of the results
of Flightways which, as a manufacturing  entity, has a higher cost of goods sold
percentage than parts distribution.

         Operating  expenses increased to $1,235,000 for the quarter ended April
3, 1998 from $844,000 for the quarter ended March 31, 1997. This was principally
attributable to the inclusion of the results of Flightways.

         Interest  expense  decreased to $473,000  from $664,000 in the quarters
ended April 3, 1998 and March 31, 1997, respectively. This was attributable to a
reduction  in  overall  interest  rate,  a  non-recurring  $340,000  accelerated
write-off  of loan  costs and other  fees in the 1997  period  and was offset by
interest on increased  debt amounts  outstanding  to finance both growth and the
acquisition of Flightways.

         As a result  of the  foregoing,  the  Company  had net  income  for the
quarter  ended  April 3, 1998 of  $110,000 as compared to a net loss of $654,000
for the comparable  period in 1997, an increase in net income of $764,000.  On a
per-share  basis,  net income for the  current  period was $.06 per share  fully
diluted ($.04 per share  primary)  compared to a loss of $.29 per share (primary
and fully  diluted) in the comparable  period of 1997.  Fully diluted net income
per share is higher  than  primary  net income  due to  adjustment  in  interest
payable on convertible debt.

                                       20
<PAGE>

LIQUIDITY

         As at April 3, 1998, the Company had working capital (current assets in
excess of current  liabilities)  of $17,397,000  compared to working  capital of
$17,740,000 at December 31, 1997.  Although the net result was a small reduction
of only $343,000 there were factors of substantial  amounts  affecting this, the
largest being the acquisition of Flightways.

         The cost of the acquisition was approximately $2,866,000 with a further
approximately  $1,100,000  being  used  to  retire  debt.  The  acquisition  was
partially  funded by an issue of common  shares (see  CAPITAL  RESOURCES)  which
produced net cash proceeds of  $1,798,000,  an increase in borrowings  under the
Company's line of credit with Nationscredit of $1,041,000 and cash.

         Operating  activities  used  $1,660,000  and generated  $335,000 of the
Company's  cash flow for the quarters  ended April 3, 1998,  and March 31, 1997,
respectively. Other than cash, there were increases in all current assets. These
increases  were  mostly  as a result  of the  Flightways  acquisition.  Accounts
receivable and inventory  increased by $1,686,000  and $1,261,000  respectively,
and of these increases,  the Flightways  acquisition  represented $1,474,000 and
$673,000 respectively.

         Similarly,  there were  increases  in accounts  payable of $605,000 and
accrued liabilities of $397,000, of which the Flightways acquisition represented
$288,000 and $407,000, respectively.


CAPITAL RESOURCES

         On February  20,  1998,  the Company  completed a private  placement to
non-United  States  persons  pursuant to Regulation S of the  Securities  Act of
1933, as amended.  The Company issued 26,333 units  consisting of 210,664 common
shares  and  warrants  to  acquire  52,666  common  shares at $13 per share (the
"Warrants"). The units were sold for $2,053,974. The warrants are exercisable at
any time prior to the second  anniversary of their issuance.  Etablissement Pour
le  Placement  Prive,  Zurich,  Switzerland,  ("EPP")  acted  as  the  Company's
placement  agent in connection  with the offering.  After brokerage and issuance
costs,  the  sales  resulted  in a net  infusion  of  capital  of  approximately
$1,798,000.  For financial  accounting  purposes at April 3, 1998, an additional
$600,000  has been offset  against the proceeds of the  placement as  additional
costs in connection with the issuance of securities.

         In April 1998, the Company  acquired 100% of the issued and outstanding
shares  of  Skylock  by  paying   approximately   $750,000  in  cash,   retiring
approximately  $100,000 in Skylock debt and issuing  approximately 60,000 common
shares  of the  Company.  Eighty  percent  of  the  cash  amount  was  paid  and
approximately  80% of the shares were issued at the closing.  The remainder will
be paid in one year, with the cash amount to be paid and the number of shares to
be issued based on Skylock's  customer  order volume  between April 1, 1998 and
March 31, 1999.

          The Company will continue to actively seek debt and/or equity  capital
infusions.  The Company  intends to use a substantial  portion of any additional
capital to pursue  potential  acquisitions  and the purchase of  distributorship
inventory.  There is no  assurance  the Company will be  successful  in securing
additional capital.

                                       21
<PAGE>


Forward-Looking Statements

         Statements  regarding  the  Company's  expectations  as to its  capital
resources,  its use of additional  capital raised and certain other  information
presented in this Form 10-QSB constitute  forward looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Act of 1934, as amended.  Although the Company  believes
that its expectations are based on reasonable  assumptions  within the bounds of
its  knowledge of its business and  operations,  there can be no assurance  that
actual  results  will not differ from its  expectations.  In addition to matters
affecting the economy and the Company's industry  generally,  factors that could
cause actual results to differ from  expectations  include,  but are not limited
to, the following:  (i) the Company's  ability to obtain future financing may be
adversely  affected by its past technical defaults on its debt financing and its
uncertainty of future profitability; (ii) the Company's ability to acquire other
businesses  in similar or allied  businesses  may be  adversely  affected if the
Company  is not  able to raise  additional  capital  or  locate  other  suitable
businesses and obtain any necessary debt financing;  (iii) the Company's ability
to raise  additional  capital may be  adversely  affected by its lack of trading
volume and the Company's uncertainty of future profitability; (iv) regulation by
governmental  authorities,  (v)  growth  or lack  of  growth  of the  commercial
aviation  industry,  (vi) the price and availability of aircraft parts and other
materials,  (vii) the Company's  ability to maintain existing customer or vendor
relationships,  (viii)  successful  execution of the Company's  expansion plans,
(ix) the Company's ability to service its debt financing and (x) competitive and
pricing pressures.

                                       22
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

         The Company is currently not a party to any known litigation.


ITEM 2.           CHANGES IN SECURITIES.

Issuance of Shares Without Registration

         During  the  quarter  ended  April 3,  1998,  the  Company  issued  the
following securities without registration under the Securities Act of 1933:

         During  the  quarter,  the  Company  issued  options to  employees  and
directors of the Company and its subsidiaries  entitling such persons to acquire
up to a total of 174,600 common  shares,  subject to vesting  requirements.  The
exercise  terms  of  such  options  are  described  in  Note 7 to the  unaudited
consolidated  financial statements bound herein. The Company did not receive any
cash  consideration  for such  issuance,  and paid no  commissions.  The Company
believes such issuance was exempt from registration  pursuant to Section 4(2) of
the Securities Act of 1933, as amended.

         On February  20,  1998,  the Company  completed a private  placement to
non-United  States  persons  pursuant to Regulation S of the  Securities  Act of
1933, as amended.  The Company issued 26,333 units  consisting of 210,664 common
shares  and  warrants  to  acquire  52,666  common  shares at $13 per share (the
"Warrants"). The units were sold for $2,053,974. The warrants are exercisable at
any time prior to the second  anniversary of their issuance.  Etablissement Pour
le  Placement  Prive,  Zurich,  Switzerland,  ("EPP")  acted  as  the  Company's
placement  agent in connection  with the offering.  After brokerage and issuance
costs,  the  sales  resulted  in a net  infusion  of  capital  of  approximately
$1,798,000.  For financial  accounting purposes at March 31, 1998, an additional
$600,000  has been offset  against the proceeds of the  placement as  additional
costs in connection with the issuance of securities.



ITEM 3.           DEFAULTS UPON SENIOR SECURITIES.

                  None

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No  matters  were  submitted  to a vote of the  Company's  shareholders
during the quarter ended April 3, 1998.


                                       23
<PAGE>


ITEM 5.           OTHER INFORMATION.

                  None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits

                           Those exhibits  previously  filed with the Securities
                           and  Exchange  Commission  as required by Item 601 of
                           Regulation S-K, are incorporated  herein by reference
                           in accordance with the provisions of Rule 12b-32.

                           Exhibit 11      Statement re computation of per share
                                            earnings
                           Exhibit 27      Financial Data Schedule

                  (b)  Reports on Form 8-K

                           The Company filed the following  Forms 8-K during the
                           quarter ended April 3, 1998:

                           1. The  Company  filed a Form 8-K dated  January  16,
                           1998 reporting the acquisition of Flightways pursuant
                           to Item 2 and 7. The Form  8-K was  amended  on March
                           30,   1998  to  include   financial   statements   of
                           Flightways  for the year ended  December 31, 1997 and
                           pro forma financial information.

                           2. The Company  filed a Form 8-K dated  February  20,
                           1998   reporting  in  Items  7  and  9  the  sale  of
                           securities  pursuant to  Regulation  S. No  financial
                           statements were filed with the report.

                           3. The Company  filed a Form 8-K dated March 30, 1998
                           reporting  in  Item 8 the  change  in  the  Company's
                           fiscal  year  to a 52-  53-week  year.  No  financial
                           statements were filed with the report.

                                       24

<PAGE>

                                    SIGNATURE


         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  Registrant  has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Date: May 15, 1998


                                    FIELDS AIRCRAFT SPARES, INC.



                                    By:/s/ Alan M. Fields
                                       ---------------------------------------
                                       Alan M. Fields, President and Principal
                                       Executive Officer



                                    By:/s/ Lawrence J. Troyna
                                       ---------------------------------------
                                       Lawrence J. Troyna, Principal Financial
                                       Officer


                                       25