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


                               ------------------

                                    FORM 10-Q

                               ------------------




            X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           ---           SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998

                                       OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          ---            SECURITIES EXCHANGE ACT OF 1934

                     For the transition period from___to___


                                -----------------

                           Commission File No. 2-91762

                                -----------------




                         POLARIS AIRCRAFT INCOME FUND I

                        State of Organization: California
                   IRS Employer Identification No. 94-2938977
                201 High Ridge Road, Stamford, Connecticut 06927
                           Telephone - (203) 357-3776



Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  12 months,  and (2) has been  subject to such filing
requirements for the past 90 days.



                              Yes  X          No
                                  ---            ---





                       This document consists of 16 pages.


<PAGE>


                         POLARIS AIRCRAFT INCOME FUND I

          FORM 10-Q - For the Quarterly Period Ended September 30, 1998




                                      INDEX



Part I.       Financial Information                                         Page

         Item 1.      Financial Statements

              a)  Balance Sheets - September 30, 1998 and
                  December 31, 1997.......................................... 3

              b)  Statements of Operations - Three and Nine Months
                  Ended September 30, 1998 and 1997.......................... 4

              c)  Statements of Changes in Partners' Capital
                  (Deficit) - Year Ended December 31, 1997
                  and Nine Months Ended September 30, 1998................... 5

              d)  Statements of Cash Flows - Nine Months
                  Ended September 30, 1998 and 1997.......................... 6

              e)  Notes to Financial Statements.............................. 7

         Item 2.      Management's Discussion and Analysis of
                      Financial Condition and Results of Operations......... 10



Part II.      Other Information

         Item 1.      Legal Proceedings..................................... 14

         Item 6.      Exhibits and Reports on Form 8-K...................... 14

         Signature    ...................................................... 15



                                       2
<PAGE>


                          Part 1. Financial Information
                          -----------------------------

Item 1.  Financial Statements

                         POLARIS AIRCRAFT INCOME FUND I

                                 BALANCE SHEETS
                                   (Unaudited)

                                                     September 30, December 31,
                                                         1998          1997
                                                         ----          ----
ASSETS:

CASH AND CASH EQUIVALENTS                              $5,910,072   $6,466,511

RENT AND OTHER RECEIVABLES, net of
   allowance for credit losses of
   $30,365 in 1998 and 1997                                 1,224         --

AIRCRAFT ENGINES, net of accumulated depreciation
   of $71,250 in 1998 and $60,000 in 1997                 888,750      900,000
                                                       ----------   ----------

                                                       $6,800,046   $7,366,511
                                                       ==========   ==========


LIABILITIES AND PARTNERS' CAPITAL:

PAYABLE TO AFFILIATES                                  $   30,065   $   42,286

ACCOUNTS PAYABLE AND ACCRUED
   LIABILITIES                                            437,674      446,822

LESSEE SECURITY DEPOSITS                                   45,000       95,000

MAINTENANCE RESERVES                                    1,727,022    1,466,687
                                                       ----------   ----------

        Total Liabilities                               2,239,761    2,050,795
                                                       ----------   ----------

PARTNERS' CAPITAL:
   General Partner                                        249,765      392,302
   Limited Partners, 168,729 units
      issued and outstanding                            4,310,520    4,923,414
                                                       ----------   ----------

        Total Partners' Capital                         4,560,285    5,315,716
                                                       ----------   ----------

                                                       $6,800,046   $7,366,511
                                                       ==========   ==========

        The accompanying notes are an integral part of these statements.


                                       3
<PAGE>


                         POLARIS AIRCRAFT INCOME FUND I

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                     Three Months Ended      Nine Months Ended
                                        September 30,          September 30,
                                        -------------          -------------

                                      1998        1997        1998        1997
                                      ----        ----        ----        ----
REVENUES:
   Rent from operating leases     $   90,000  $   90,000  $  270,000  $  270,000
   Interest                           78,682      85,841     224,119     418,994
   Gain on sale of aircraft             --          --          --     1,832,673
   Gain on sale of aircraft
     inventory                        98,145      86,382     162,454     222,602
   Lessee settlement and other          --       690,946     231,072     691,726
                                  ----------  ----------  ----------  ----------

          Total Revenues             266,827     953,169     887,645   3,435,995
                                  ----------  ----------  ----------  ----------

EXPENSES:
   Depreciation                        3,750       3,750      11,250      11,250
   Management fees to general
     partner                           4,500       4,500      13,500      13,500
   Provision for credit losses          --        30,365        --        30,365
   Operating                            --        49,502       3,514     208,843
   Administration and other           26,833      44,629     114,999     129,760
                                  ----------  ----------  ----------  ----------

          Total Expenses              35,083     132,746     143,263     393,718
                                  ----------  ----------  ----------  ----------

NET INCOME                        $  231,744  $  820,423  $  744,382  $3,042,277
                                  ==========  ==========  ==========  ==========

NET INCOME ALLOCATED
   TO THE GENERAL PARTNER         $    2,318  $  619,786  $    7,444  $  776,974
                                  ==========  ==========  ==========  ==========

NET INCOME ALLOCATED
   TO LIMITED PARTNERS            $  229,426  $  200,637  $  736,938  $2,265,303
                                  ==========  ==========  ==========  ==========

NET INCOME PER LIMITED
   PARTNERSHIP UNIT               $     1.36  $     1.19  $     4.37  $    13.43
                                  ==========  ==========  ==========  ==========

        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>

                         POLARIS AIRCRAFT INCOME FUND I

              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                                   (Unaudited)


                                          Year Ended December 31, 1997 and
                                        Nine Months Ended September 30, 1998
                                        ------------------------------------

                                        General       Limited
                                        Partner       Partners          Total
                                        -------       --------          -----

Balance, December 31, 1996           $   (624,341)  $ 11,047,769   $ 10,423,428

   Net income                           1,846,228      1,341,903      3,188,131

   Cash distributions to partners        (829,585)    (7,466,258)    (8,295,843)
                                     ------------   ------------   ------------

Balance, December 31, 1997                392,302      4,923,414      5,315,716

   Net income                               7,444        736,938        744,382

   Cash distributions to partners        (149,981)    (1,349,832)    (1,499,813)
                                     ------------   ------------   ------------

Balance, September 30, 1998          $    249,765   $  4,310,520   $  4,560,285
                                     ============   ============   ============


        The accompanying notes are an integral part of these statements.


                                       5
<PAGE>


                         POLARIS AIRCRAFT INCOME FUND I

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                 Nine Months Ended September 30,
                                                 -------------------------------

                                                        1998          1997
                                                        ----          ----
OPERATING ACTIVITIES:
   Net income                                     $    744,382   $  3,042,277
   Adjustments to reconcile net income to
      net cash provided by operating activities:
      Depreciation                                      11,250         11,250
      Gain on sale of aircraft inventory              (162,454)      (222,602)
      Gain on sale of aircraft                            --       (1,832,673)
      Changes in operating assets and
        liabilities:
        Decrease (increase) in rent and other
          receivables                                   (1,224)        18,816
        Increase (decrease) in payable to
          affiliates                                   (12,221)        60,041
        Decrease in accounts payable
           and accrued liabilities                      (9,148)      (123,255)
        Increase in deferred income                       --           21,290
        Increase (decrease) in lessee security
          deposits                                     (50,000)        24,075
        Increase in maintenance reserves               260,335        176,815
                                                  ------------   ------------

           Net cash provided by operating
             activities                                780,920      1,176,034
                                                  ------------   ------------

INVESTING ACTIVITIES:
   Proceeds from sale of aircraft                         --        2,620,000
   Principal payments on note receivable                  --          418,145
   Net proceeds from sale of aircraft inventory        162,454        222,602
                                                  ------------   ------------

           Net cash provided by investing
             activities                                162,454      3,260,747
                                                  ------------   ------------

FINANCING ACTIVITIES:
   Cash distributions to partners                   (1,499,813)    (8,295,843)
                                                  ------------   ------------

           Net cash used in financing activities    (1,499,813)    (8,295,843)
                                                  ------------   ------------

CHANGES IN CASH AND CASH
   EQUIVALENTS                                        (556,439)    (3,859,062)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                               6,466,511     10,065,652
                                                  ------------   ------------

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                  $  5,910,072   $  6,206,590
                                                  ============   ============

        The accompanying notes are an integral part of these statements.


                                       6
<PAGE>

                         POLARIS AIRCRAFT INCOME FUND I

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.    Accounting Principles and Policies

In the opinion of management,  the financial statements presented herein include
all  adjustments,  consisting  only of  normal  recurring  items,  necessary  to
summarize fairly Polaris Aircraft Income Fund I's (the Partnership's)  financial
position and results of operations.  The financial statements have been prepared
in accordance with the  instructions  of the Quarterly  Report to the Securities
and  Exchange  Commission  (SEC)  Form  10-Q  and  do  not  include  all  of the
information  and note  disclosures  required by  generally  accepted  accounting
principles  (GAAP).  These  statements  should be read in  conjunction  with the
financial  statements  and notes thereto for the years ended  December 31, 1997,
1996,  and 1995 included in the  Partnership's  1997 Annual Report to the SEC on
Form 10-K.


2.    Related Parties

Under the Limited Partnership  Agreement,  the Partnership paid or agreed to pay
the following  amounts for the current quarter to the general  partner,  Polaris
Investment  Management  Corporation,  in connection  with  services  rendered or
payments made on behalf of the Partnership:

                                             Payments for
                                          Three Months Ended      Payable at
                                          September 30, 1998  September 30, 1998
                                          ------------------  ------------------

Aircraft Management Fees                        $ 4,500            $ 1,518

Out-of-Pocket Administrative Expense
    Reimbursement                                43,123             28,547

Out-of-Pocket Operating and
    Remarketing Expense Reimbursement               645               --
                                                -------            -------

                                                $48,268            $30,065
                                                =======            =======


3.    Claims Related to Lessee Defaults

Jet Fleet  Bankruptcy - As previously  reported,  in September  1992, Jet Fleet,
former lessee of one of the Partnership's aircraft, defaulted on its obligations
under  the  lease for the  Partnership's  aircraft  by  failing  to pay  reserve
payments and to maintain  required  insurance.  The Partnership  repossessed its
Aircraft on  September  28,  1992.  Thereafter,  Jet Fleet filed for  bankruptcy
protection in the United States  Bankruptcy  Court for the Northern  District of
Texas,  Dallas  Division.  On April 13, 1993, the  Partnership  filed a proof of
claim in the Jet Fleet  bankruptcy to recover its damages.  The bankrupt  estate
was subsequently  determined to be insolvent.  The bankruptcy  proceeding of Jet
Fleet Corporation was closed on August 6, 1997, and the bankruptcy proceeding of
Jet Fleet  International  Airlines,  Inc.  was  closed  on  February  10,  1998.


                                       7
<PAGE>

Distributions  from the  bankrupt  estate  have not been  made to the  unsecured
creditors, and the Partnership is not likely to receive any distributions on its
Proof of Claim.

The Partnership had been holding  deposits and maintenance  reserves pending the
outcome of the Jet Fleet bankruptcy proceedings.  Consequently,  the Partnership
recognized, during the quarter ended March 31, 1998, revenue of $92,610 that had
been held as  deposits  and  maintenance  reserves,  which is included in lessee
settlement and other income.

Braniff,  Inc. (Braniff) Bankruptcy - As previously reported, in September 1989,
Braniff filed a petition under Chapter 11 of the Federal  Bankruptcy Code in the
United  States  Bankruptcy  Court for the Middle  District of  Florida,  Orlando
Division.  On  September  26,  1990  the  Partnership  filed a proof of claim to
recover unpaid rent and other damages, and on November 27, 1990, the Partnership
filed a proof of  administrative  claim to  recover  damages  for  detention  of
aircraft,  non-compliance  with court orders and post-petition use of engines as
well as liquidated  damages.  On July 27, 1992, the Bankruptcy  Court approved a
stipulation  embodying a settlement among the Partnership,  the Braniff creditor
committees  and  Braniff in which it was agreed  that the  Partnership  would be
allowed an  administrative  claim in the bankruptcy  proceeding of approximately
$2,076,923.  As  the  final  disposition  of  the  Partnership's  claim  in  the
Bankruptcy proceedings, the Partnership was permitted by the Bankruptcy Court to
exchange a portion of its unsecured claim for Braniff's right (commonly referred
to as a "Stage 2 Base Level right") under the FAA noise  regulations  to operate
nine Stage 2 aircraft and has been allowed a net  remaining  unsecured  claim of
$6,923,077 in the proceedings.

Braniff's  bankrupt  estate  has made a payment  in the  amount of  $200,000  in
respect of the  unsecured  claims of the  Partnership  and other  affiliates  of
Polaris  Investment  Management  Corporation.   Of  this  amount,  $138,462  was
allocated to the  Partnership,  based on its pro rata share of the total claims,
and  recognized  as revenue  during the quarter  ended March 31, 1998,  which is
included in lessee settlement and other income.


4.       Sale of Aircraft Inventory to Soundair, Inc.

The  Partnership  sold its remaining  inventory of aircraft  parts from the four
disassembled  aircraft,  to Soundair,  Inc. The remaining inventory,  with a net
carrying value of $-0-, was sold effective  February 1, 1998 for $100,000,  less
amounts previously received for sales as of that date. The net purchase price of
$98,145 was paid in September 1998.


5.       Partners' Capital

The Partnership  Agreement (the Agreement) stipulates different methods by which
revenue,  income  and  loss  from  operations  and  gain or loss on the  sale of
aircraft are to be allocated  to the general  partner and the limited  partners.
Such  allocations are made using income or loss  calculated  under GAAP for book
purposes, which varies from income or loss calculated for tax purposes.

Cash  available  for  distributions,  including  the  proceeds  from the sale of
aircraft,  is  distributed  10% to the  general  partner  and 90% to the limited
partners.


                                       8
<PAGE>


The different methods of allocating items of income, loss and cash available for
distribution  combined with the calculation of items of income and loss for book
and  tax  purposes  result  in  book  basis  capital   accounts  that  may  vary
significantly  from tax basis capital  accounts.  The ultimate  liquidation  and
distribution  of remaining cash will be based on the tax basis capital  accounts
following liquidation, in accordance with the Agreement.


6.       Subsequent Event

In November,  1998, the Partnership entered into an agreement to sell one of its
two engines held in inventory  for net proceeds of $290,000 to Quantum  Aviation
Limited.  It is anticipated  that the second engine will also be sold to Quantum
during the fourth  quarter of 1998. The two engines had a net book value of $-0-
at September 30, 1998.



                                       9
<PAGE>


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

At September 30, 1998,  Polaris Aircraft Income Fund I (the  Partnership)  owned
three  engines  out of its  original  portfolio  of eleven  aircraft.  The three
engines  are  leased  to Royal  Aviation  Inc.  and  Royal  Cargo,  Inc.  (Royal
Aviation).


Remarketing Update

The  Partnership  sold its remaining  inventory of aircraft  parts from the four
disassembled  aircraft,  to Soundair,  Inc. The remaining inventory,  with a net
carrying value of $-0-, was sold effective  February 1, 1998 for $100,000,  less
amounts previously received for sales as of that date. The net purchase price of
$98,145 was paid in September 1998.

In November,  1998, the Partnership entered into an agreement to sell one of its
two engines held in inventory  for net proceeds of $290,000 to Quantum  Aviation
Limited.  It is anticipated  that the second engine will also be sold to Quantum
during the fourth  quarter of 1998. The two engines had a net book value of $-0-
at September 30, 1998.


Partnership Operations

The  Partnership  recorded  net  income  of  $231,744,   or  $1.36  per  limited
partnership unit, for the three months ended September 30, 1998, compared to net
income of $820,423,  or $1.19 per limited  partnership unit, for the same period
in 1997. The Partnership  recorded net income of $744,382,  or $4.37 per limited
partnership unit, for the nine months ended September 30, 1998,  compared to net
income of $3,042,277 or $13.43 per unit for the same period in 1997.

The  decrease  in  operating  results  during  the three and nine  months  ended
September  30, 1998,  as compared to the same periods in 1997,  is primarily the
result of gains on the sale of aircraft and a settlement  payment  received from
Nations Air in 1997 as discussed  below.  The variance in net income per limited
partnership  unit will differ from the  variance of total net income from period
to period due to the methods by which income or loss from operations and gain or
loss on the sale of aircraft are  allocated in accordance  with the  partnership
agreement.

During the first quarter of 1997, the  Partnership  sold two Boeing 737-200s and
two spare engines formerly leased to Viscount to Solair,  Inc. for cash proceeds
of  $1,620,000.  In  addition,  the  Partnership  retained  certain  maintenance
reserves  and  deposits  received  from the  former  lessee  of  these  aircraft
aggregating  approximately  $968,000  that had been held by the  Partnership  to
offset potential future  maintenance  expenses for these aircraft.  As a result,
the Partnership  recognized a net gain of $781,504 on the sale of these aircraft
during the first quarter of 1997.

During  the second  quarter of 1997,  the  Partnership  sold one Boeing  737-200
formerly  leased to Viscount  and  subleased  to Nations Air  Express,  Inc. for
$1,000,000.  In addition,  the Partnership retained certain maintenance reserves
and  deposits  received  from the  former  lessee of this  aircraft  aggregating
approximately  $1,081,000  that  had  been  held by the  Partnership  to  offset
potential  future  maintenance  expenses  for this  aircraft.  As a result,  the
Partnership  recognized a net gain of  $1,051,169  on the sale of this  aircraft
during the second quarter of 1997.  During the three months ended  September 30,
1997,  the  Partnership  received  a  payment  of  $690,946  as its  share  of a
settlement payment from Nations Air, before legal expenses.


                                       10
<PAGE>

During the  quarter  ended  September  30,  1997,  the  Partnership  recorded an
allowance  for credit  losses of $30,365 for the  outstanding  receivables  from
CanAir through  August 21, 1997,  after applying  CanAir's  security  deposit of
$20,925 towards the outstanding receivables due.

Interest income  decreased  during the three and nine months ended September 30,
1998,  as compared to the same periods in 1997,  primarily  due to a decrease in
the cash reserves as discussed in the liquidity section.

Operating  expenses  decreased  during the three and nine months ended September
30, 1998,  as compared to the same  periods in 1997,  due to a decrease in legal
expenses  during the three  months and nine months  ended  September  30,  1998.
During the nine months ended  September  30, 1997,  the  Partnership  recognized
legal  expenses of  approximately  $177,000  related to the Nations Air Express,
Inc. default and the Viscount default and Chapter 11 bankruptcy  filing.  During
the nine months ended  September  30, 1998,  the  Partnership  recognized  legal
expenses of only $3,514 related to the Braniff bankruptcy.

Administrative  expenses  decreased  during  the  three  and nine  months  ended
September 30, 1998, as compared to the same periods in 1997,  primarily due to a
decrease in consulting  and trustee fees during the three months and nine months
ended September 30, 1998.


Claims Related to Lessee Defaults

Braniff,  Inc.  (Braniff)  Bankruptcy  - As  more  fully  discussed  in  Note 3,
Braniff's  bankrupt  estate  has made a payment  in the  amount of  $200,000  in
respect of the  unsecured  claims of the  Partnership  and other  affiliates  of
Polaris  Investment  Management  Corporation.   Of  this  amount,  $138,462  was
allocated to the  Partnership,  based on its pro rata share of the total claims,
and recognized as revenue during the nine months ended September 30, 1998.

Jet  Fleet  Bankruptcy  - As more  fully  discussed  in Note 3,  the  bankruptcy
proceeding  of Jet Fleet  Corporation  was  closed on  August 6,  1997,  and the
bankruptcy  proceeding of Jet Fleet International  Airlines,  Inc. was closed on
February 10, 1998.  Distributions from the bankrupt estate have not been made to
the  unsecured  creditors,  and the  Partnership  is not likely to  receive  any
distributions on its Proof of Claim.

The Partnership had been holding  deposits and maintenance  reserves pending the
outcome of the Jet Fleet bankruptcy proceedings.  Consequently,  the Partnership
recognized,  during the nine months ended September 30, 1998, revenue of $92,610
that had been held as deposits and maintenance reserves.


Liquidity and Cash Distributions

Liquidity - The Partnership  receives  maintenance  reserve  payments from Royal
Aviation that may be reimbursed to the lessee or applied  against  certain costs
incurred by the Partnership for maintenance work performed on the  Partnership's
aircraft or engines,  as specified in the leases.  Maintenance  reserve balances
remaining  at  the  termination  of the  lease,  if  any,  may  be  used  by the
Partnership to offset future maintenance  expenses or recognized as revenue. The
net maintenance reserves balances aggregate $1,727,022 as of September 30, 1998.

The Partnership  received payments of approximately  $98,000 and $162,000 during
the three  months  and nine  months  ended  September  30,  1998,  respectively,


                                       11
<PAGE>

compared to payments of approximately  $86,000 and $223,000 during the three and
nine months ended September 30, 1997, respectively,  from the sale of parts from
the four disassembled  aircraft.  As stated above, the remaining parts were sold
in September 1998.

Polaris Investment Management  Corporation,  the general partner, has determined
that the Partnership  maintain cash reserves as a prudent measure to insure that
the Partnership  has available funds in the event that the engines  presently on
lease  to  Royal  Aviation  require  remarketing  and for  other  contingencies,
including  expenses of the Partnership.  The Partnership's cash reserves will be
monitored  and may be revised from time to time as further  information  becomes
available in the future.

Cash  Distributions - There were no cash  distributions  to limited partners for
the three  months  ended  September  30,  1998.  Cash  distributions  to limited
partners for the three  months  ended  September  30, 1997 were  $6,116,427,  or
$36.25 per limited  partnership  unit. Cash  distributions  were $1,349,832,  or
$8.00 per limited  partnership unit and $7,466,258,  or $44.25 per unit, for the
nine months  ended  September  30, 1998 and 1997,  respectively.  The timing and
amount of  future  cash  distributions  to  partners  are not yet known and will
depend upon the Partnership's future cash requirements, including the receipt of
rental payments from Royal Aviation.


Impact of the Year 2000 Issue

The inability of business  processes to continue to function correctly after the
beginning of the Year 2000 could have serious  adverse  effects on companies and
entities throughout the world. As discussed in prior filings with the Securities
and Exchange  Commission,  the General  Partner has engaged GE Capital  Aviation
Services,   Inc.  ("GECAS")  to  provide  certain  management  services  to  the
Partnership.  Both the General Partner and GECAS are  wholly-owned  subsidiaries
(either direct or indirect) of General  Electric Capital  Corporation  ("GECC").
All of the Partnership's operational functions are handled either by the General
Partner  and  GECAS  or  by  third   parties  (as  discussed  in  the  following
paragraphs), and the Partnership has no information systems of its own.

GECC and GECAS have  undertaken a global  effort to identify  and mitigate  Year
2000 issues in their information systems, products and services,  facilities and
suppliers  as well as to assess the extent to which Year 2000 issues will impact
their  customers.   Each  business  has  a  Year  2000  leader  who  oversees  a
multi-functional  remediation  project team responsible for applying a Six Sigma
quality approach in four phases:  (1)  define/measure  -- identify and inventory
possible  sources of Year 2000 issues;  (2) analyze -- determine  the nature and
extent of Year 2000 issues and develop  project  plans to address  those issues;
(3) improve -- execute project plans and perform a majority of the testing;  and
(4) control -- complete  testing,  continue  monitoring  readiness  and complete
necessary  contingency  plans. The progress of this program is monitored at each
business, and company-wide reviews with senior management are conducted monthly.
GECC and GECAS  management  plan to have completed the first three phases of the
program for a  substantial  majority of  mission-critical  systems by the end of
1998 and to have  nearly  all  significant  information  systems,  products  and
services,  facilities  and  suppliers  in the  control  phase of the  program by
mid-1999.

As noted elsewhere,  the Partnership has sold all of its aircraft-related assets
other than three aircraft  engines.  These  remaining  engines are on lease with
Royal Aviation,  Inc. and Royal Cargo,  Inc., and under the terms of the leases,


                                       12
<PAGE>

the lessees have the  obligation  to repair and  maintain the engines.  GECAS is
requesting  information  from the  lessees  about the  status of their Year 2000
program.

Aside  from  maintenance  and  other  matters  relating  to  the   Partnership's
aircraft-related  assets discussed above, the principal  third-party  vendors to
the  Partnership  are those  providing  the  Partnership  with  services such as
accounting,  auditing, banking and investor services. GECAS intends to apply the
same standards in determining the Year 2000  capabilities  of the  Partnership's
third-party  vendors as GECAS will apply  with  respect to its  outside  vendors
pursuant to its internal Year 2000 program.

The  scope  of the  global  Year  2000  effort  encompasses  many  thousands  of
applications  and computer  programs;  products  and  services;  facilities  and
facilities-related  equipment;  suppliers; and, customers. The Partnership, like
all  business  operations,  is also  dependent  on the Year  2000  readiness  of
infrastructure   suppliers   in   areas   such   as   utility,   communications,
transportation  and other services.  In this  environment,  there will likely be
instances of failure that could cause disruptions in business  processes or that
could affect  customers'  ability to repay  amounts owed to the  Partnership  or
vendors' ability to provide services  without  interruption.  The likelihood and
effects of failures in infrastructure systems, over which the Partnership has no
control,  cannot  be  estimated.  However,  aside  from the  impact  of any such
possible  failures  or the  possibility  of a  disruption  of the  Partnership's
lessees'  business  caused by Year 2000 failures,  the General  Partner does not
believe that  occurrences  of Year 2000  failures  will have a material  adverse
effect on the  financial  position,  results of  operations  or liquidity of the
Partnership.

To date, the Partnership has not incurred any Year 2000 expenditures nor does it
expect  to incur any  material  costs in the  future.  However,  the  activities
involved in the Year 2000 effort  necessarily  involve estimates and projections
of activities and resources that will be required in the future. These estimates
and projections could change as work progresses.



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<PAGE>



                           Part II. Other Information
                           --------------------------


Item 1.       Legal Proceedings

As  discussed  in Item 3 of Part I of  Polaris  Aircraft  Income  Fund  I's (the
Partnership) 1997 Annual Report to the Securities and Exchange  Commission (SEC)
on Form 10-K (Form 10-K) and in Item 1 of Part II of the Partnership's Quarterly
Report to the SEC on Form 10-Q (Form 10-Q) for the periods  ended March 31, 1998
and June 30, 1998,  there are a number of pending legal  actions or  proceedings
involving  the  Partnership.  Except  as  described  below,  there  have been no
material developments with respect to any such actions or proceedings during the
period covered by this report.

CanAir Cargo Ltd. (CanAir) Order under the Companies' Creditors  Arrangement Act
of Canada - The receiver  appointed by the Ontario Court of Justice on behalf of
CanAir's creditors has sold one of the remaining five Convair 280 aircraft owned
by CanAir,  as well as most of CanAir's other assets,  including spare parts and
accounts receivable. Subject to court approval, the proceeds of the sale will be
distributed  to  CanAir's  creditors,  including  the  Partnership,  GE  Capital
Aviation  Services,  Inc.,  as agent for Polaris  Holding  Company,  and General
Electric  Capital  Leasing  Canada,  Inc.  (collectively,  the  GECAS  Parties).
However, the amount of the sale proceeds that the GECAS Parties will receive has
not yet been determined by the court.

Other Proceedings - Item 10 in Part III of the Partnership's  1997 Form 10-K and
Item 1 in Part II of the Partnership's Form 10-Q for the periods ended March 31,
1998 and June 30, 1998 discuss  certain  actions  which have been filed  against
Polaris Investment Management Corporation and others in connection with the sale
of interests in the  Partnership  and the  management  of the  Partnership.  The
Partnership  is not a party  to  these  actions.  There  have  been no  material
developments  with respect to any of the actions  described  therein  during the
period covered by this report.


Item 6.           Exhibits and Reports on Form 8-K

a)    Exhibits (numbered in accordance with Item 601 of Regulation S-K)

           27. Financial Data Schedule (in electronic format only).

b)    Reports on Form 8-K

      No reports on Form 8-K were filed by the Registrant during the quarter for
           which this report is filed.


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<PAGE>


                                    SIGNATURE




Pursuant to the  requirements of section 13 or 15(d) 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.

                         POLARIS AIRCRAFT INCOME FUND I
                         (Registrant)
                         By:   Polaris Investment
                               Management Corporation,
                               General Partner




        November 16, 1998                 By: /S/Marc A. Meiches
----------------------------------            ------------------
                                              Marc A. Meiches
                                              Chief Financial Officer
                                              (principal financial officer and
                                              principal accounting officer of
                                              Polaris Investment Management
                                              Corporation, General Partner of
                                              the Registrant)


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