U. S. Securities and Exchange Commission
                               Washington, D.C. 20549
                                    Form 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
  For the quarterly period ended June 30, 1998
 TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
  For the transition period from                      to                   
 
 Commission file number      0-10190-0   

                         AERO SERVICES INTERNATIONAL, INC.                 
     
                        (Exact name of small business issuer as
                              specified in its charter)
              LOUISIANA                               72-0385274            
   (State or other jurisdiction            (IRS Employer Identification No.)
 of incorporation or organization)
                    660 Newtown-Yardley Road, Newtown, PA 18940            
     
                      (Address of principal executive offices)
                                  
                                  (215) 860-5600                           
                             (Issuer's telephone number)
 Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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       
 State the number of shares outstanding of each of the issuer's classes of
common equity, as of July 31, 1998:  Common stock (without par value)
6,998,052 shares.
Transitional Small Business Disclosure Format (Check one):  Yes       No  x  

   AERO SERVICES INTERNATIONAL, INC. & SUBSIDIARIES
                             INDEX

 PART I -   Financial Information                              Page Number
Item 1.  Financial Statements
Condensed Consolidated Balance Sheet
June 30, 1998 (unaudited)                                               2    

Consolidated Statement of Earnings
three months and nine months ended June 30, 1998
and 1997 (unaudited)                                                    3    

Condensed Consolidated Statement of Cash Flows
nine months ended June 30, 1998 and 1997
(unaudited)                                                             4    

Notes to Condensed Consolidated Financial Statements
(unaudited)                                                             5    

Item 2.  Management's Discussion and Analysis of
       Financial Condition and Results of Operation                     8    
 
 PART II -  Other Information
Item 1.  Legal Proceedings                                             10    

Item 6.  Exhibits and Reports on Form 8-K                              11    


    AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEET
                        JUNE 30, 1998
(UNAUDITED:  DOLLAR AMOUNTS IN THOUSANDS)
 ASSETS
CURRENT ASSETS
 Cash                                                        $   212 
 Customers receivables, less allowance for
  doubtful accounts of $28                                       543 
 Inventories                                                      62 
 Prepaid expenses and other current assets                       318 
TOTAL CURRENT ASSETS                                           1,135 
PROPERTY AND EQUIPMENT, NET                                    2,694 
OTHER ASSETS                                                     379 
TOTAL ASSETS                                                 $ 4,208 
 LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
 Notes payable                                               $   115 
 Current maturities of long term debt-affiliate                8,559 
 Current maturities of long term debt-other                       10 
 Accounts payable-trade                                        1,034 
 Accrued expenses
  Property, payroll, and other taxes                           3,254 
  Other                                                          693 
  Affiliate                                                    2,143 
TOTAL CURRENT LIABILITIES                                     15,808 
LONG-TERM DEBT, less current maturities
 Affiliate                                                     7,506 
 Other                                                         3,601 
TOTAL LONG-TERM DEBT                                          11,107 
OTHER LONG TERM LIABILITIES                                      213 
REDEEMABLE PREFERRED STOCK                                     6,513 
 STOCKHOLDERS' DEFICIT
 Common stock                                                  8,702 
 Additional paid-in capital                                    3,219 
 Accumulated deficit                                         (41,117)
                                                             (29,196)
  Less:  Common stock in treasury                                237 
TOTAL STOCKHOLDERS' DEFICIT                                  (29,433)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT                    $ 4,208 
See Notes to Condensed Consolidated Financial Statements.


   AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED
                         STATEMENT OF EARNINGS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
                               THREE MONTHS ENDED          NINE MONTHS ENDED   
                                      June 30,                   June 30,       
                                 1998         1997          1998         1997   
 NET SALES                     $3,167        $2,125        $8,470      $5,980 
  COST AND EXPENSE
Cost of sales                   1,311           980         3,519       2,813 
Departmental costs              1,191           765         3,226       2,255 
Administrative costs              308           179           813         602 
Interest expense - other           35            49           129         159 
Interest expense - affiliate      409           374         1,159       1,109 
                                  (87)         (222)         (376)       (958)
Gain on sale of certain FBO
 operations                         -             -             -          98 
Other income, net                  22           301            63         362 
 NET (INCOME) LOSS                (65)           79          (313)       (498)
Preferred dividends               (65)          (65)         (194)       (194)
Accretion of preferred stock       (8)           (9)          (24)     $  (29)
Net income (loss) applicable
 to common shareholders        $ (138)       $    5        $ (531)     $ (721)
Net income (loss)
 per share - basic             $(0.02)       $ 0.00        $(0.08)     $(0.10)
See Notes to Condensed Consolidated Financial Statements.
   
                    AERO SERVICES INTERNATIONAL, INC.
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                        (UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
                                                  NINE MONTHS ENDED 
                                                        JUNE 30,     
                                                     1998            1997 
  CASH FLOWS FROM OPERATING ACTIVITIES
 Net (Loss)                                        $ (313)         $ (498)
 
 Adjustments to reconcile net income to
  net cash provided by operating activities:
 Depreciation and amortization                        296             251 
 Provision for losses on accounts receivable            7               6 
 Provision for obsolete inventory                       3               - 
 Gain on sale of certain FBO operations                 -             (98)
 Gain on sale of fixed assets                           -             (41)
 Other                                                 (5)              5 
 Change in assets and liabilities:
 (Increase) decrease in accounts receivable          (231)             38 
 Decrease in inventory                                (24)              - 
 (Increase) decrease in other current assets          (80)             44 
 Increase in other assets                            (137)            (49)
 Increase (decrease) in accounts payable                9             (22)
 Increase in property, payroll, and other taxes       210              64 
 Decrease in other current liabilities               (100)           (152)
 Increase in other liabilities - affiliate            712             323 
 Decrease in other long term liabilities              (20)            (20)
 Total adjustments                                    640             349 
  Net cash (used in) provided by operating activities 327            (149)
  CASH FLOWS FROM INVESTING ACTIVITIES
 Purchases of property and equipment                 (167)            (80)
  Net cash used in investing activities              (167)            (80)
  CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from issuance of notes payable - affiliate  100               - 
 Proceeds from issuance of notes payable               75             225 
 Principal payments of notes payable - affiliate     (234)            (27)
 Principal payment of notes payable - other             -            (110)
 Principal payments of long-term debt                 (20)            (30)
  Net cash provided by (used in) financing activities (79)             58 
 Net incease (decrease) in cash & cash equivalents     81            (171)
 Cash and cash equivalents at beginning of year       131             390 
 Cash and cash equivalents at end of third fiscal
  quarter                                          $  212          $  219 
  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 Cash paid during the period for:
  Interest                                         $  547          $  938 
  Income taxes                                          -               - 
See Notes to Condensed Consolidated Financial Statements.
 
 
 NOTE 1:  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of June 30, 1998, consolidated
statement of earnings for the nine month and three month periods ended June
30, 1998 and 1997, and the condensed consolidated statement of cash flows for
the nine month periods then ended were prepared by the Company, without
audit.  In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at June 30, 1998 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's September 30, 1997
annual report on Form 10-KSB.  The results of operations for the periods
ended June 30, 1998 and 1997 are not necessarily indicative of the operating
results for the full year.

 NOTE 2:  CASH AND SHORT-TERM SECURITIES
The Company considers cash on hand and deposits in banks as cash and cash
equivalents.  All items in this category have maturities of less than three
months.

 NOTE 3:  INVENTORIES
Inventories are classified as follows:
                                                                   JUNE 30 
                                                                    1998   
Aircraft parts and accessories, oil and
 supplies less provisions for obsolete
 and slow-moving, and excess quantity
 of $14                                                               $20    
Fuel                                                                   42    
                                                                      $62    
 NOTE 4:  OTHER CURRENT ASSETS
Included in the total of $318 is $268 of prepaid expenses such as rent and
insurance.
 NOTE 5:  OTHER ASSETS
Included in the total of $379 is $276 in a sinking fund established by the
Company for the payment of the industrial revenue bond that matures in
December 2014.
 NOTE 6:  ACCRUED PROPERTY, PAYROLL, AND OTHER TAXES
Included in the balance of $3,254 is an accrual of $1,668 for a New York
motor fuels tax assessment which is being appealed, and $1,352 for property
taxes.
 NOTE 7:  FINANCING ARRANGEMENTS
 Long Term Debt-Affiliate
Included in this category are $8,308 of various demand loans due to Transtech
Holding Company, (Transtech), the Company's principle shareholder.  These
notes, classified as current maturities of long term debt, provide for
interest at 2% above the prime rate.  Also included is a note due Transtech
in the amount of $6,910, bearing a prime interest rate.  The note is
collateralized by a first priority interest on the fixed assets, inventory,
and accounts receivable of the Company.  Also, this category includes $596,
the balance due on the purchase of an airplane in July 1996 from R. Ted
Brant, the Chairman of the Board and Chief Executive Officer of the Company. 
The note is due Cessna Corporation but remains in the name of Mr. Brant.  The
Company makes payments directly to Cessna.
 Long Term Debt-Other
Included in this category is $3,500 due on an industrial revenue bond that
matures in 2014.
 NOTE 8:  RELATED PARTIES TRANSACTIONS
The Company is indebted to its major shareholder Transtech (holder of 42.2%
of common stock and 34.9% of preferred) in the amount of $15,218.  Relative
to this debt, the Company had accrued interest of $2,107 at June 30.  During
the nine months ended June 30, 1998 the Company paid $348 of interest and
$144 of principal to Transtech.
The Company provides accounting services to Transtech for one fixed base
operation owned by it for a monthly fee of $1.
In January 1996 the Company purchased a 40% interest in a company called
Peakwood, L.L.C. for $150.  $115 of this amount was borrowed from the
following related parties:  Transportech, a wholly owned subsidiary of
Transtech Holding Co., $20; Maurice Lawruk, Company Director, $40; James
Affleck, Company Assistant Treasurer, $34; R. Ted Brant, Company Director and
CEO, $15; Bobby Adkins, Company Director, $4; and Alice Buford, a shareholder
of Transtech, $2.  The Company issued promissory notes bearing an interest
rate of 10% per annum with principal and interest due in February 1997.  At
that time the Company exercised its option contained within the notes to
extend them for one additional year.  All interest due and payable was paid
at the time of the extension.  In February 1998 the notes, along with accrued
and unpaid interest, were converted to one year installment loans to be paid
in 12 equal monthly payments, beginning in March 1998.
The Company periodically uses an aircraft owned by Valley Air Services, Inc.
(Valley Air) for travel by its employees, primarily management.  Valley Air
bills the Company an hourly rate based on flight time.  The President and
Chief Executive Officer of Valley Air is R. Ted Brant.  During the nine
months ended June 30, 1998 the Company was billed $88 for use of the
aircraft.

 NOTE 9:  CONTINGENT LIABILITIES
A.   Environmental Matters
The Company's business involves the storage, handling and sale of aviation
fuel; and the provision of mechanical maintenance and refurbishing services
which involve the use of hazardous chemicals.  Accordingly, the Company is
required to comply with federal, state and local regulations which have been
enacted to control the discharge of material into the environment or
otherwise relate to the protection of the environment.  As a normal course
of business, the Company from time to time discusses environmental compliance
with the appropriate environmental agency.
At June 30, 1998 the Company had accrued $364 for expenses related to
environmental protection, assessment and remediation matters at certain
locations based upon identified situations and cost estimates provided by
firms and individuals knowledgeable of such matters.  These estimates are
subject to change dependent upon additional information and revisions to
governing regulations.
The expenditures and accruals for environmental matters are specific in
nature to identified situations at Company locations.  On March 27 the
Company was notified by the Arizona Department of Environmental Quality that
the remediation requirements of the Scottsdale project had been met and the
case closed.  The Company is now responsible for a remediation project at one
location previously sold.  Since that one location is covered by a state
superfund, more than 95% of previous expenses incurred in the remediation
there have been refunded to the Company.  Therefore, the existing accrual of
$364 is considered by management to be more than sufficient to cover future
EPA expenditures and no charges to current operations are expected.

B.   Litigation
Please refer to Part II, Item 1 on page 10 for a discussion of current
litigation matters.                                                     
   
                      PART I - FINANCIAL INFORMATION
                 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                          AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                                (DOLLAR AMOUNTS IN THOUSANDS)
Results of Operations:
The following table presents as a percentage of total sales certain selected
financial data for the Company for the periods indicated.
                 Three Months Ended  Nine Months Ended
                             June 30,                          June 30,    
                          1998          1997              1998         1997
Net Sales                 100.0%       100.0%             100.0%      100.0%
Cost of Sales              41.4         46.1               41.5        47.0 
Departmental costs         37.6         36.0               38.1        37.7 
Administrative costs        9.7          8.4                9.6        10.1 
Interest expense (Net)     14.0         19.9               15.2        21.2 
Other income                0.7         14.1                0.7         7.7 
Net income (loss)          (2.0)         3.7               (3.7)       (8.3)


Sales for the nine month period ended June 30, 1998 increased $2,490 (42%)
over the same period in 1997.  $509 of that increase was due to the
operations at Harrisburg International Airport that began in November 1997. 
Fuel sales increased $1,327 (34%) and sales of services to commercial
airlines increased $688 (123%).  During the three months ended June 30, 1998,
sales increased $1,042 (49%) over the same period in 1997, with $311 of the
increase provided by the Harrisburg operation.  Fuel sales increased $593
(42%) and sales of services to commercial airlines increased $243 (117%).
Cost of sales for the nine month period in 1998 decreased by 5.5% of sales
to 41.5% as compared to 47.0% in 1997.  About one-half of the decrease can
be attributed to the increase in sales of services to commercial airlines
which have very little related cost of sales.  The expenses incurred are
labor and equipment charges, which are classified as departmental costs. 
Cost of sales for the three month period in 1998 decreased by 4.7% of sales
to 41.4% as compared to 46.1% in 1997.  Again, about one-half of the
reduction was due to sales to commercial airlines.
Departmental costs increased by $971 during the nine month period in 1998 as
compared to 1997, but remained in proportion to sales; 38.1% in 1998 and
37.7% in 1997.  Payroll and related costs increased by $579 and rental of
equipment increased by $174 during the nine month period.  During the three
month period departmental costs increased $426 in 1998 compared to 1997.  Of
this amount, $272 was payroll and related costs, and $63 was rental of
equipment.
Administrative costs increased $211 to $813 during the nine month period in
1998 compared to 1997, but was reduced as a percentage of sales from 10.1%
to 9.6%.  Administrative costs increased $129 during the three month period
in 1998 compared to 1997.

                   PART I - FINANCIAL INFORMATION
                ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                         OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                              (DOLLAR AMOUNTS IN THOUSANDS)
  
  
  LIQUIDITY AND CAPITAL RESOURCES
Working capital deficiency at June 30, 1998 increased by $355 to ($14,673)
from September 30, 1997.  Current assets increased $409 due to an increase
in accounts receivable of $224, prepaid expenses of $80, inventory of $24,
and cash of $81.  Current liabilities increased $744 as a result of a $712
increase in accrued interest due to affiliate.
Operations during the nine months ended June 30, 1998 provided $327 of cash. 
Additional cash of $175 was provided from the issuance of notes payable. 
$167 was used to purchase fixed assets and $254 was used to reduce the
principal amount of notes payable.
Management continues to review its options with respect to developing new
business opportunities and to maximize its return from existing businesses. 
Management is exploring several new business opportunities, such as the new
facility which opened at Harrisburg International Airport in November 1997. 
Management is considering several possible means of restructuring the
Company's debt and has reviewed opportunities to open or acquire additional
FBO's and is also reviewing various options in related business enterprises. 
However, there can be no assurance that the Company can be returned to
profitability or maintained as a going concern.
The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
   
   
   
                        PART II - OTHER INFORMATION
                        AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                        (DOLLAR AMOUNTS IN THOUSANDS)


 ITEM 1. -  LEGAL PROCEEDINGS
 The Company is subject to several complaints filed over the last several
years in different courts or administrative agencies by different individual
former employees challenging the termination of their employment by the
Company on a variety of grounds.  These claims are encountered in the
ordinary course of business, and in the opinion of management, the resolution
of these matters, either individually or in the aggregate, will not have a
material adverse effect on the Company's financial position in excess of what
has already been recorded.  Management believes that it has established
adequate reserves for all of these claims.  Management also believes it has
strong defenses and intends to vigorously defend its position.
The Company is also exposed to a number of asserted and unasserted potential
claims encountered in the normal course of business.  In the opinion of
management, the resolution of these matters, as well as those discussed above
or referenced elsewhere in this report, will not have a material adverse
effect on the Company's financial position in excess of what has already been
recorded.  Management believes that it has established adequate reserves for
all of these claims.


                   PART II - OTHER INFORMATION
                AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
                (DOLLAR AMOUNTS IN THOUSANDS)
 ITEM 6. -  EXHIBITS AND REPORTS ON FORM 8-K
  (a)  Exhibits:
   27.0 Financial Data Schedule
  (b) Reports on Form 8-K:  None.
   SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
  AERO SERVICES INTERNATIONAL, INC.
 (Registrant)
____________________________________
                         (Signature)
  Paul R. Slack
  Chief Accounting Officer
  and Controller
_____________________________________
                          (Signature)
  R. Ted Brant
  Chairman of the Board
Date:  August 14, 1998