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 June 30, 1997

                                       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 Mission Street, 27th Floor, San Francisco, California 94105
                           Telephone - (415) 284-7400



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 15 pages.


<PAGE>



                         POLARIS AIRCRAFT INCOME FUND I

            FORM 10-Q - For the Quarterly Period Ended June 30, 1997




                                      INDEX



Part I.    Financial Information                                         Page

        Item 1.   Financial Statements

           a)  Balance Sheets - June 30, 1997 and
               December 31, 1996.........................................  3

           b)  Statements of Operations - Three and Six Months
               Ended June 30, 1997 and 1996..............................  4

           c)  Statements of Changes in Partners' Capital
               (Deficit) - Year Ended December 31, 1996
               and Six Months Ended June 30, 1997........................  5

           d)  Statements of Cash Flows - Six Months
               Ended June 30, 1997 and 1996..............................  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...................................... 13

        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)

                                                    June 30,      December 31,
                                                      1997           1996
                                                      ----           ----
ASSETS:

CASH AND CASH EQUIVALENTS                        $ 12,263,353    $ 10,065,652

RENT AND OTHER RECEIVABLES, net of
   allowance for credit losses of $233,913
   in 1997 and 1996                                      --            18,816

NOTES RECEIVABLE, net of  allowance for
   credit losses of $177,537 in 1997 and 1996            --           418,145

AIRCRAFT AND AIRCRAFT ENGINES, net
of accumulated depreciation of $52,500 in 1997
and $20,823,462 in 1996                               907,500       3,751,387

OTHER ASSETS                                            4,877            --
                                                 ------------    ------------

                                                 $ 13,175,730    $ 14,254,000
                                                 ============    ============


LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):

PAYABLE TO AFFILIATES                            $     41,477    $     77,676

ACCOUNTS PAYABLE AND ACCRUED
   LIABILITIES                                        572,737         464,603

LESSEE SECURITY DEPOSITS                               70,925          70,925

MAINTENANCE RESERVES                                1,345,122       3,217,368
                                                 ------------    ------------

       Total Liabilities                            2,030,261       3,830,572
                                                 ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
   General Partner                                   (617,134)       (624,341)
   Limited Partners, 168,729 units
     issued and outstanding                        11,762,603      11,047,769
                                                 ------------    ------------

       Total Partners' Capital                     11,145,469      10,423,428
                                                 ------------    ------------

                                                 $ 13,175,730    $ 14,254,000
                                                 ============    ============

        The accompanying notes are an integral part of these statements.

                                        3

<PAGE>

<TABLE>

                                     POLARIS AIRCRAFT INCOME FUND I
  
                                        STATEMENTS OF OPERATIONS
                                               (Unaudited)

<CAPTION>
                                                   Three Months Ended           Six Months Ended
                                                         June 30,                   June 30,
                                                         --------                   --------

                                                    1997         1996          1997          1996
                                                    ----         ----          ----          ----
<S>                                           <C>            <C>           <C>            <C>
REVENUES:
  Rent from operating leases                  $    90,000    $   480,000   $    180,000   $  988,900
  Gain on sale of aircraft inventory               49,802        103,050        136,220      256,770
  Gain on sale of aircraft                      1,051,169           --        1,832,673         --
  Interest and other                              186,222        128,082        333,933      252,875
                                              -----------    -----------   ------------   ----------

         Total Revenues                         1,377,193        711,132      2,482,826    1,498,545
                                              -----------    -----------   ------------   ----------

EXPENSES:
  Depreciation                                      3,750        314,182          7,500      628,364
  Management fees to general partner                4,500         24,000          9,000       34,500
  Provision for credit losses                        --             --             --        309,581
  Operating                                       105,469        127,920        159,341      276,350
  Administration and other                         49,964         49,722         85,131       80,827
                                              -----------    -----------   ------------   ----------

         Total Expenses                           163,683        515,824        260,972    1,329,622
                                              -----------    -----------   ------------   ----------

NET INCOME                                    $ 1,213,510    $   195,308   $  2,221,854   $  168,923
                                              ===========    ===========   ============   ==========

NET INCOME ALLOCATED
  TO THE GENERAL PARTNER                      $    12,135    $     1,954   $    157,188   $  254,758
                                              ===========    ===========   ============   ==========

NET INCOME (LOSS) ALLOCATED
  TO LIMITED PARTNERS                         $ 1,201,375    $   193,354   $  2,064,666   $  (85,835)
                                              ===========    ===========   ============   ==========

NET INCOME (LOSS) PER LIMITED
  PARTNERSHIP UNIT                            $      7.12    $      1.15   $      12.24   $    (0.50)
                                              ===========    ===========   ============   ==========


                     The accompanying notes are an integral part of these statements.

                                                    4

</TABLE>

<PAGE>

<TABLE>

                                    POLARIS AIRCRAFT INCOME FUND I

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

<CAPTION>
                                                     Year Ended December 31, 1996 and
                                                      Six Months Ended June 30, 1997
                                                      ------------------------------

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

<S>                                           <C>             <C>               <C>
Balance, December 31, 1995                    $ (590,280)     $  14,417,273     $  13,826,993

  Net income (loss)                              247,154           (838,569)         (591,415)

Cash distributions to partners                  (281,215)        (2,530,935)       (2,812,150)
                                              ----------      -------------     -------------

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

  Net income                                     157,188          2,064,666         2,221,854

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

Balance, June 30, 1997                        $ (617,134)     $  11,762,603     $  11,145,469
                                              ==========      =============     =============

                     The accompanying notes are an integral part of these statements.

                                                   5
</TABLE>

<PAGE>



                         POLARIS AIRCRAFT INCOME FUND I

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                   Six Months Ended June 30,
                                                   -------------------------

                                                        1997         1996
                                                        ----         ----
OPERATING ACTIVITIES:
   Net income                                      $  2,221,854  $    168,923
   Adjustments to reconcile net income to
     net cash provided by operating activities:
     Depreciation                                         7,500       628,364
     Gain on sale of aircraft inventory                (136,220)         --
     Gain on sale of aircraft                        (1,832,673)         --
     Net provision for credit losses                       --         295,328
     Changes in operating assets and liabilities
       net of effects of sale of aircraft:
       Decrease (increase) in rent and other
        receivables                                      18,816      (277,421)
       Increase in other assets                          (4,877)         --
       Increase (decrease) in payable to affiliates     (36,199)       17,021
       Increase in accounts payable and
         accrued liabilities                            108,134       224,671
       Increase in maintenance reserves                 176,814       497,101
                                                   ------------  ------------

         Net cash provided by operating activities      523,149     1,553,987
                                                   ------------  ------------

INVESTING ACTIVITIES:
   Principal payments on note receivable                418,145        68,223
   Net proceeds from sale of aircraft inventory         136,220          --
   Proceeds from sale of aircraft                     2,620,000          --
                                                   ------------  ------------

         Net cash provided by investing activities    3,174,365        68,223
                                                   ------------  ------------

FINANCING ACTIVITIES:
   Cash distributions to partners                    (1,499,813)   (2,812,150)
                                                   ------------  ------------

         Net cash used in financing activities       (1,499,813)   (2,812,150)
                                                   ------------  ------------

CHANGES IN CASH AND CASH
   EQUIVALENTS                                        2,197,701    (1,189,940)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                               10,065,652     9,807,315
                                                   ------------  ------------

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                   $ 12,263,353  $  8,617,375
                                                   ============  ============

        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.  These  statements  should be read in conjunction with the financial
statements  and notes thereto for the years ended  December 31, 1996,  1995, and
1994  included in the  Partnership's  1996 Annual Report to the SEC on Form 10-K
(Form 10-K).


2.   Sale of two Boeing 737-200s

In January 1997, the Partnership received a deposit of $162,000 toward the sales
price of  $1,620,000  for the sale of two Boeing  737-200s and two spare engines
formerly  leased to Viscount Air  Services,  Inc.  (Viscount).  The  Partnership
received the remaining  $1,458,000 in March 1997. 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.


3.   Sale of one Boeing 737-200

In April 1997, the  Partnership  received a deposit of $250,000 toward the sales
price of  $1,000,000  for the sale of one  Boeing  737-200  formerly  leased  to
Viscount and subleased to Nations Air Express, Inc. The Partnership received the
remaining  $750,000 in May 1997. 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.


4.   Nations Air Default and Litigation

As previously  reported,  First Security Bank,  National  Association  (FSB), as
trustee for the Partnership,  filed an action against Nations Air Express,  Inc.
(Nations Air) to recover damages  arising from Nations Air's  possession and use
of an aircraft owned by FSB, as trustee for the Partnership.  On March 31, 1997,
Nations Air entered into a comprehensive  Settlement Agreement with FSB, Polaris
Holding Company (PHC), the Partnership, Polaris Aircraft Income Fund II, Polaris
Investment  Management  Corporation  (General  Partner) and GE Capital  Aviation
Services (GECAS) (collectively, the "GECAS Parties"). Pursuant to the Settlement
Agreement,  Nations Air filed a Stipulated  Judgment whereby Nations Air agreed,
among other  things,  to purchase the  aircraft  owned by FSB as trustee for PHC
(the "PHC  Aircraft")  for $3.3  million  payable  no later  than May 30,  1997.
Subsequent to March 31, 1997; GECAS, on behalf of FSB, and Nations Air agreed to
extend the date by which  Nations  Air or its  designee  must  purchase  the PHC
Aircraft  to July 14,  1997.  On that date FSB sold the PHC  Aircraft to Nations
Air's designee and received the purchase price of $3.3 million.  Pending receipt

                                        7

<PAGE>


of certain  certificates  from Nations Air, FSB will execute a  Satisfaction  of
Judgment in this action, and the GECAS Parties will execute a release, releasing
Nations Air from any claims related to any transaction between the GECAS Parties
and Nations Air. The  Partnership  will  receive  approximately  $518,000 as its
share of the settlement payment after legal expenses.


5.   Engine Note Receivable

On April 25, 1997 the Partnership  received  $408,496 as payment in full, of the
outstanding engine finance sale note receivable, including accrued interest, due
from Rock-It Cargo USA, Inc. and Riverhorse Investments, Inc.


6.   Engine Lease to CanAir

In April 1997, the Partnership and CanAir Cargo Ltd.  (CanAir) agreed to a lease
extension  for seven months  beyond the original  lease  expiration  date of May
1997.  CanAir  subsequently  obtained  an order under the  Companies'  Creditors
Arrangement Act of Canada,  as discussed in Note 8 and Item 2, under the caption
"CanAir Cargo Ltd. - (CanAir) Order under the Companies'  Creditors  Arrangement
Act of Canada."


7.   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
                                           June 30, 1997      June 30, 1997
                                           -------------      -------------

Aircraft Management Fees                     $    4,882        $      --

Out-of-Pocket Administrative Expense
   Reimbursement                                 56,223             38,380

Out-of-Pocket Operating and
   Remarketing Expense Reimbursement             48,033              3,097
                                             ----------        -----------

                                             $  109,138        $    41,477
                                             ==========        ===========


8.   Subsequent Event

CanAir Cargo Ltd. (CanAir) Order under the Companies' Creditors  Arrangement Act
of Canada Polaris  Holding  Company (PHC) and General  Electric  Capital Leasing
Canada,  Inc.  (GECL Canada)  lease a total of five aircraft to CanAir,  and the
Partnership leases three engines to CanAir. On July 28, 1997, CanAir obtained an
Order under the Companies' Creditors  Arrangement Act of Canada (the CCAA Order)
from the Ontario Court,  General  Division.  The CCAA Order  restrains  CanAir's
creditors,  including lessors,  from exercising any rights arising from CanAir's
default or  non-performance of its obligations until October 28, 1997 or further
order of the  court.  CanAir  has not met its July and  August  engine  rent and
maintenance reserve payment obligations to the Partnership.  GE Capital Aviation
Services,  Inc. (GECAS),  as agent for the PHC, GECL Canada and the Partnership,

                                        8

<PAGE>


is currently  negotiating  with CanAir to determine if they can formulate a plan
of reorganization. It is too early in the process to predict any outcome.

                                        9

<PAGE>



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

At June 30, 1997,  Polaris Aircraft Income Fund I (the Partnership)  owned three
spare engines and certain  inventoried  aircraft parts.  The three spare engines
are  leased  to  CanAir  Cargo  Ltd.  (CanAir).  In  addition,  the  Partnership
transferred  four  aircraft to aircraft  inventory  during 1992 and 1993.  These
aircraft have been  disassembled for sale of their component parts. In May 1997,
the Partnership sold its one remaining aircraft out of its original portfolio of
eleven  aircraft.  The Boeing  737-200  aircraft  sold in May 1997 was  formerly
leased to Viscount Air Services,  Inc.  (Viscount)  and subleased to Nations Air
Express,  Inc.  (Nations Air), was returned to the Partnership in February 1997.
Two engines formerly leased to Viscount, were returned to the Partnership in May
and October 1996 and were sold in March 1997. One  additional  engine from these
aircraft was sold to Viscount during 1995. Viscount's affiliates,  Rock-It Cargo
USA,  Inc.  (Rock-It  Cargo)  and  Riverhorse   Investments,   Inc.  (Riverhorse
Investments)  assumed  the  note for  this  engine  sale in  October  1996.  The
Partnership  has sold five aircraft and one airframe from its original  aircraft
portfolio:  a Boeing 737-200 Convertible  Freighter in 1990, a McDonnell Douglas
DC-9-10 in 1992, a Boeing 737-200 in 1993 and the airframe from a Boeing 737-200
aircraft in April 1995 and two Boeing 737-200 aircraft in March 1997.


Remarketing Update

Engine Note Receivable - On April 25, 1997 the Partnership  received $408,496 as
payment  in full,  of the  outstanding  engine  finance  sale  note  receivable,
including accrued interest, due from Rock-It Cargo and Riverhorse Investments.

Sale of two Boeing  737-200s  - In  January  1997,  the  Partnership  received a
deposit of  $162,000  toward the sales price of  $1,620,000  for the sale of two
Boeing  737-200s  and  two  spare  engines  formerly  leased  to  Viscount.  The
Partnership  received the remaining  $1,458,000 in March 1997. 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.

Sale of one Boeing 737-200 - In April 1997, the  Partnership  received a deposit
of  $250,000  toward the sales  price of  $1,000,000  for the sale of one Boeing
737-200  formerly leased to Viscount and subleased to Nations Air Express,  Inc.
The Partnership  received the remaining  $750,000 in May 1997. 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.

Engine  Lease to Can Air - In April  1997,  the  Partnership  agreed  to a lease
extension  for seven months  beyond the original  lease  expiration  date of May
1997.  CanAir  subsequently  obtained  an order under the  Companies'  Creditors
Arrangement  Act of Canada,  as discussed  in Item 2, under the caption  "CanAir
Cargo Ltd. - (CanAir) Order under the Companies'  Creditors  Arrangement  Act of
Canada."


Partnership Operations

The  Partnership  recorded  net  income  of  $1,213,510,  or $7.12  per  limited
partnership unit for the three months ended June 30, 1997 compared to net income
of $195,308 or $1.15 per limited  partnership  unit,  for the three months ended
June 30, 1996. The Partnership recorded net income of $2,221,854,  or $12.24 per
limited partnership unit for the six months ended June 30, 1997, compared to net
income of $168,923,  or an allocated  net loss of $0.50 per limited  partnership
unit, for the six months ended June 30, 1996.  The increase in operating results

                                       10

<PAGE>



during the three and six months  ended June 30,  1997,  as  compared to the same
periods in 1996,  is  primarily  the result of gains on the sale of  aircraft in
1997, which were partially  offset by decreases in rental income.  Additionally,
the aircraft owned by the Partnership  during 1997 had been  depreciated down to
their estimated residual values in 1996, resulting in a decrease in depreciation
expense.

Another factor contributing to the improved earnings during the six months ended
June 30,  1997,  as compared  to the same period in 1996,  was a decrease in the
provision for credit losses and a decrease in operating expense. The Partnership
recorded an allowance  for credit  losses  during the first  quarter of 1996 for
certain unpaid rent and accrued interest  receivables  from Viscount  recognized
during the first  quarter of 1996 as a result of  Viscount's  default on certain
obligations due the Partnership and Viscount's subsequent bankruptcy filing. The
aggregate  allowance  for credit  losses of $309,581  for these  obligations  is
reflected as a provision  for credit  losses in the  Partnership's  statement of
operations for the six months ended June 30, 1996. In addition,  the Partnership
recognized  legal  expenses of  approximately  $272,000  related to the Viscount
default  and Chapter 11  bankruptcy  filing.  These legal costs are  included in
operating  expense in the  Partnership's  statement  of  operations  for the six
months ended June 30, 1996.

Nations Air Default and Litigation

As previously  reported,  First Security Bank,  National  Association  (FSB), as
trustee for the Partnership,  filed an action against Nations Air Express,  Inc.
(Nations Air) to recover damages  arising from Nations Air's  possession and use
of an aircraft owned by FSB, as trustee for the Partnership.  On March 31, 1997,
Nations Air entered into a comprehensive  Settlement Agreement with FSB, Polaris
Holding Company (PHC), the Partnership, Polaris Aircraft Income Fund II, Polaris
Investment  Management  Corporation  (General  Partner) and GE Capital  Aviation
Services (GECAS) (collectively, the "GECAS Parties"). Pursuant to the Settlement
Agreement,  Nations Air filed a Stipulated  Judgment whereby Nations Air agreed,
among other  things,  to purchase the  aircraft  owned by FSB as trustee for PHC
(the "PHC  Aircraft")  for $3.3  million  payable  no later  than May 30,  1997.
Subsequent to March 31, 1997; GECAS, on behalf of FSB, and Nations Air agreed to
extend the date by which  Nations  Air or its  designee  must  purchase  the PHC
Aircraft  to July 14,  1997.  On that date FSB sold the PHC  Aircraft to Nations
Air's designee and received the purchase price of $3.3 million.  Pending receipt
of certain  certificates  from Nations Air, FSB will execute a  Satisfaction  of
Judgment in this action, and the GECAS Parties will execute a release, releasing
Nations Air from any claims related to any transaction between the GECAS Parties
and Nations Air. The  Partnership  will  receive  approximately  $518,000 as its
share of the settlement payment after legal expenses.

CanAir Cargo Ltd. (CanAir) Order under the Companies' Creditors  Arrangement Act
of Canada

Polaris Holding Company (PHC) and General Electric Capital Leasing Canada,  Inc.
(GECL  Canada)  lease a total of five  aircraft to CanAir,  and the  Partnership
leases three engines to CanAir. On July 28, 1997, CanAir obtained an Order under
the  Companies'  Creditors  Arrangement  Act of Canada (the CCAA Order) from the
Ontario Court,  General Division.  The CCAA Order restrains CanAir's  creditors,
including  lessors,  from exercising any rights arising from CanAir's default or
non-performance  of its  obligations  until October 28, 1997 or further order of
the court.  CanAir has not met its July and August  engine rent and  maintenance
reserve payment  obligations to the Partnership.  GE Capital Aviation  Services,
Inc.  (GECAS),  as agent  for the  PHC,  GECL  Canada  and the  Partnership,  is
currently  negotiating  with CanAir to determine if they can formulate a plan of
reorganization. It is too early in the process to predict any outcome.

                                       11

<PAGE>



Liquidity and Cash Distributions

Liquidity - The  Partnership  has received  all engine  lease  payments due from
CanAir  through  June 30,  1997.  In  addition  to engine  lease  payments,  the
Partnership   receives   maintenance  reserve  payments  from  CanAir.  The  net
maintenance  reserves balances aggregate  $1,345,122 as of June 30, 1997. To the
extent that CanAir is not in default under its lease,  such funds may be paid to
CanAir as  reimbursement  for certain costs  incurred by CanAir for  maintenance
work  performed  on the  Partnership's  engines,  as  specified  in  the  lease.
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. CanAir has not met its July and August 1997 engine rental
and maintenance reserve payment obligations to the Partnership, and has obtained
an Order Under the Companies'  Creditors  Arrangement Act of Canada as discussed
in Item 2 under  the  caption  "CanAir  Cargo  Ltd.  (CanAir)  Order  under  the
Companies' Creditors Arrangement Act of Canada."

Cash Distributions - Cash distributions to limited partners were $1,349,832,  or
$8.00 per limited  partnership  unit for the six months ended June 30, 1997,  as
compared  to  $2,530,935,  or $15.00 per  limited  partnership  unit for the six
months ended June 30, 1996.

In accordance with the Limited Partnership Agreement,  cash distributions are to
be allocated 90% to the limited partners and the 10% to the general partner.  In
July 1997,  the  Partnership  made a cash  distribution  to limited  partners of
$6,116,426  ($36.25 per limited  partnership  unit) and  $679,603 to the general
partner. Such distribution was comprised of cash from operations, sales proceeds
and excess cash reserves.

                                       12

<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) 1996 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 period  ended March 31, 1997,
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.

Viscount Air Services, Inc. (Viscount) Bankruptcy - A trustee has been appointed
to administer  Viscount's  bankruptcy.  On June 27, 1997, the  Bankruptcy  Court
heard oral argument on a hearing concerning  confirmation of a liquidity Chapter
11 plan.

As previously  reported,  the  Partnership  is involved in litigation  regarding
mechanics' liens asserted over one of the Partnership's engines by a maintenence
facility called BAE Aviation, Inc. dba Tucson Aerospace, and its subcontractors,
STS Services,  Inc. and Piping Design Services, Inc. dba PDS Technical Services.
First  Security   Bank,   National   Association,   the  owner  trustee  of  the
Partnership's  engine,  filed a  summary  judgment  motion  on May 2,  1997  and
obtained  summary  judgment  that  the  alleged  liens  do  not  extend  to  the
Partnership's engine.

Mercury Air Group v. Aero Costa Rica  (ACORI),  S.A.,  et al. - On June 3, 1997,
Mercury Air Group  (Mercury)  entered into a Settlement  Agreement  with Polaris
Holding  Company  (Polaris)  and  First  Security  Bank,  National   Association
(formerly known as First Security Bank of Utah,  N.A.) (FSB), as trustee for the
Partnership.  Pursuant to the  Settlement  Agreement,  Mercury filed a Notice of
Voluntary  Dismissal with Prejudice in respect of its claims against Polaris and
FSB and  discharged the lien against an aircraft owned by FSB as trustee for the
Partnership.

First  Security  Bank,  National  Association,  as Owner  Trustee v. Nations Air
Express,  Inc. - As previously reported, on March 31, 1997, Nations Air Express,
Inc. (Nations Air) entered into a comprehensive  Settlement Agreement with First
Security Bank,  National  Association (FSB),  Polaris Holding Company (PHC), the
Partnership,  Polaris  Aircraft  Income Fund II, Polaris  Investment  Management
Corporation   (General   Partner)  and  GE  Capital  Aviation  Services  (GECAS)
(collectively,  the "GECAS  Parties").  Pursuant  to the  Settlement  Agreement,
Nations Air filed a Stipulated Judgment whereby Nations Air agreed,  among other
things,  to  purchase  the  aircraft  owned by FSB as trustee  for PHC (the "PHC
Aircraft")  for $3.3 million  payable no later than May 30, 1997.  Subsequent to
March 31,  1997;  GECAS,  on behalf of FSB, and Nations Air agreed to extend the
date by which Nations Air or its designee must purchase the PHC Aircraft to July
14, 1997. On that date FSB sold the PHC Aircraft to Nations  Air's  designee and
received  the  purchase  price  of $3.3  million.  Pending  receipt  of  certain
certificates  from Nations Air, FSB will execute a  Satisfaction  of Judgment in
this action, and the GECAS Parties will execute a release, releasing Nations Air
from any claims related to any transaction between the GECAS Parties and Nations
Air. The  Partnership  will receive  approximately  $518,000 as its share of the
settlement payment after legal expenses.

Other Proceedings - Item 10 in Part III of the Partnership's  1996 Form 10-K and
Item 1 in Part II of the Partnership's  Form 10-Q for the period ended March 31,
1997 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.  With the exception of
Novak, et al v. Polaris Holding  Company,  et al, (which has been dismissed,  as
discussed in the  Partnership's  1996 Form 10-K) where the Partnership was named
as a defendant for procedural purposes, the Partnership is not a party to  these

                                       13

<PAGE>



actions.  Except as discussed  below,  there have been no material  developments
with respect to any of the actions  described  therein during the period covered
by this report.

The  following  actions  have been settled  pursuant to a  settlement  agreement
entered into on June 6, 1997:

- Thelma Abrams, et al. v. Polaris Holding Company, et al.
- Sara J. Bishop, et al. v. Kidder, Peabody & Co. Incorporated, et al.
- Enita V. Elphick, et al. v. Kidder, Peabody & Co. Incorporated, et al.
- Janet K. Johnson, et al. v. Polaris Holding Company, et al.
- Wayne W. Kuntz, et al. v. Polaris Holding Company, et al.
- Joyce H. McDevitt, et al. v. Polaris Holding Company, et al.
- Mary Grant Tarrer, et al. v. Kidder, Peabody & Co. Incorporated, et al.
- Harry R. Wilson, et al. v. Polaris Holding Company, et al.
- George Zicos, et al. v. Polaris Holding Company, et al.

- Michael J. Ouellette,  et al. v. Kidder,  Peabody & Co. Incorporated,  et al.;
Thelma A. Rolph, et al. v. Polaris Holding Company, et al.; Carl L. Self, et al.
v.  Polaris  Holding  Company,  et al.  - On or  about  March  21,  1997,  three
complaints  were filed in the Superior Court of the State of California,  County
of Sacramento  naming as  defendants  Kidder,  Peabody & Company,  Incorporated,
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Capital  Services,  General  Electric Capital  Corporation,  GE
Capital Aviation Services and Does 1-100. The first complaint,  entitled Michael
J.  Ouellette,  et al. v.  Kidder  Peabody & Co.,  et al.,  was filed by over 50
individual  plaintiffs who purchased limited partnership units in one or more of
Polaris  Aircraft  Income Funds I-VI. The second  complaint,  entitled Thelma A.
Rolph,  et al.  v.  Polaris  Holding  Company,  et al.,  was  filed  by over 500
individual  plaintiffs who purchased limited partnership units in one or more of
Polaris Aircraft Income Funds I-VI. The third complaint,  entitled Carl L. Self,
et al. v. Polaris  Holding  Company,  et al.,  was filed by over 500  individual
plaintiffs  who purchased  limited  partnership  units in one or more of Polaris
Aircraft  Income Funds I-VI. Each complaint  alleges  violations of state common
law, including fraud, negligent  misrepresentation and breach of fiduciary duty,
and violations of the rules of the National  Association of Securities  Dealers,
Inc. Each complaint seeks to recover  compensatory  damages and punitive damages
in an  unspecified  amount,  interest  and  rescission  with  respect to Polaris
Aircraft  Income Funds I-VI and all other limited  partnerships  alleged to have
been sold by Kidder Peabody to the plaintiffs.


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

b)   Reports on Form 8-K

         None.

                                       14

<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




      August 12, 1997                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)

                                       15