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, 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 13 pages.


<PAGE>



                                                            
                         POLARIS AIRCRAFT INCOME FUND I

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




                                      INDEX



Part I.       Financial Information                                        Page

         Item 1.      Financial Statements

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

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

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

              d)  Statements of Cash Flows - Six Months
                  Ended June 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..........9



Part II.      Other Information

         Item 1.      Legal Proceedings.....................................11

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

         Signature    ......................................................12







                                        2
<PAGE>


                             

                          Part 1. Financial Information

Item 1.   Financial Statements

                         POLARIS AIRCRAFT INCOME FUND I

                                 BALANCE SHEETS
                                   (Unaudited)

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

CASH AND CASH EQUIVALENTS                            $ 5,646,058    $ 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 $67,500 in 1998 and $60,000 in 1997               892,500        900,000
                                                     -----------    -----------

                                                     $ 6,539,782    $ 7,366,511
                                                     ===========    ===========


LIABILITIES AND PARTNERS' CAPITAL :

PAYABLE TO AFFILIATES                                $    28,127    $    42,286

ACCOUNTS PAYABLE AND ACCRUED
   LIABILITIES                                           456,547        446,822

LESSEE SECURITY DEPOSITS                                  45,000         95,000

DEFERRED INCOME                                           30,000            -

MAINTENANCE RESERVES                                   1,651,567      1,466,687
                                                     -----------    -----------

        Total Liabilities                              2,211,241      2,050,795
                                                     -----------    -----------

PARTNERS' CAPITAL :
   General Partner                                       247,447        392,302
   Limited Partners, 168,729 units
      issued and outstanding                           4,081,094      4,923,414
                                                     -----------    -----------

        Total Partners' Capital                        4,328,541      5,315,716
                                                     -----------    -----------

                                                     $ 6,539,782    $ 7,366,511
                                                     ===========    ===========

        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,
                                              --------                --------

                                            1998       1997       1998       1997
                                            ----       ----       ----       ----
<S>                                    <C>        <C>        <C>        <C>
REVENUES:
   Rent from operating leases          $   90,000 $   90,000 $  180,000 $  180,000
   Gain on sale of aircraft inventory      14,856     49,802     64,309    136,220
   Gain on sale of aircraft                  --    1,051,169       --    1,832,673
   Interest and other                      73,333    186,222    376,509    333,933
                                       ---------- ---------- ---------- ----------

           Total Revenues                 178,189  1,377,193    620,818  2,482,826
                                       ---------- ---------- ---------- ----------

EXPENSES:
   Depreciation                             3,750      3,750      7,500      7,500
   Management fees to general partner       4,500      4,500      9,000      9,000
   Operating                                3,514    105,469      3,514    159,341
   Administration and other                47,200     49,964     88,166     85,131
                                       ---------- ---------- ---------- ----------

           Total Expenses                  58,964    163,683    108,180    260,972
                                       ---------- ---------- ---------- ----------

NET INCOME                             $  119,225 $1,213,510 $  512,638 $2,221,854
                                       ========== ========== ========== ==========

NET INCOME ALLOCATED
   TO THE GENERAL PARTNER              $    1,192 $   12,135 $    5,126 $  157,188
                                       ========== ========== ========== ==========

NET INCOME ALLOCATED
   TO LIMITED PARTNERS                 $  118,033 $1,201,375 $  507,512 $2,064,666
                                       ========== ========== ========== ==========

NET INCOME PER LIMITED
   PARTNERSHIP UNIT                    $     0.70 $     7.12 $     3.01 $    12.24
                                       ========== ========== ========== ==========



         The accompanying notes are an integral part of these statements
</TABLE>
                                        4

<PAGE>



                         POLARIS AIRCRAFT INCOME FUND I

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


                                           Year Ended December 31, 1997 and
                                            Six Months Ended June 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                              5,126         507,512        512,638

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

Balance, June 30, 1998              $    247,447    $  4,081,094   $  4,328,541
                                    ============    ============   ============










         The accompanying notes are an integral part of these statements

                                        5

<PAGE>
<TABLE>


                         POLARIS AIRCRAFT INCOME FUND I

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>

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

                                                                 1998          1997
                                                                 ----          ----
<S>                                                        <C>           <C>
OPERATING ACTIVITIES:
   Net income                                              $   512,638   $  2,221,854
   Adjustments to reconcile net income to
      net cash provided by operating activities:
      Depreciation                                               7,500          7,500
      Gain on sale of aircraft inventory                       (64,309)      (136,220)
      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 in other assets                                  --           (4,877)
        Decrease in payable to affiliates                      (14,159)       (36,199)
        Increase in deferred income                             30,000           --
        Increase in accounts payable and
           accrued liabilities                                   9,725        108,134
        Increase in maintenance reserves                       184,880        176,814
        Decrease in security deposits                          (50,000)          --
                                                           -----------   ------------

           Net cash provided by operating activities           615,051        523,149
                                                           -----------   ------------

INVESTING ACTIVITIES:
   Principal payments on note receivable                          --          418,145
   Net proceeds from sale of aircraft inventory                 64,309        136,220
   Proceeds from sale of aircraft                                 --        2,620,000
                                                           -----------   ------------

           Net cash provided by investing activities            64,309      3,174,365
                                                           -----------   ------------

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

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

CHANGES IN CASH AND CASH
   EQUIVALENTS                                                (820,453)     2,197,701

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

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                           $ 5,646,058   $ 12,263,353
                                                           ===========   ============


        The accompanying notes are an integral part of these statements

                                        6

</TABLE>
<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
                                         June 30, 1998      June 30, 1998
                                         -------------      -------------

Aircraft Management Fees                 $      4,500       $       1,518

Out-of-Pocket Administrative Expense
    Reimbursement                              56,333              25,964

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

                                         $     60,833       $      28,127
                                         ============       =============


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.
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.

                                       7
<PAGE>


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 interest
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 interest and other income.


4.       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.

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.



                                       8

<PAGE>



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

At June 30, 1998,  Polaris Aircraft Income Fund I (the Partnership)  owned three
engines and certain inventoried  aircraft parts out of its original portfolio of
eleven  aircraft.  The three engines are leased to Royal Aviation Inc. and Royal
Cargo,  Inc. (Royal  Aviation).  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 August 1998,  the  Partnership  entered into an agreement for the sale of its
remaining inventory of aircraft parts, with a net carrying value of $0, from the
four disassembled  aircraft to Soundair,  Inc. The remaining  inventory was sold
effective February 1, 1998 for $100,000,  less amounts  previously  received for
sales in the month of February of $1,855. The net purchase price will be paid in
four monthly installments commencing in August.


Partnership Operations

The  Partnership  recorded  net  income  of  $119,225,   or  $0.70  per  limited
partnership unit for the three months ended June 30, 1998 compared to net income
of $1,213,510 or $7.12 per limited  partnership unit, for the three months ended
June 30, 1997.  The  Partnership  recorded net income of $512,638,  or $3.01 per
limited partnership unit for the six months ended June 30, 1998, compared to net
income of $2,221,854, or $12.24 per limited partnership unit, for the six months
ended June 30, 1997. The decrease in operating  results during the three and six
months  ended  June 30,  1998,  as  compared  to the same  periods  in 1997,  is
primarily  the  result  of gains on the sale of  aircraft  in 1997 as  discussed
below.

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.

Interest income  decreased  during the three and six months ended June 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 six  months  ended June 30,
1998,  as  compared  to the same  periods in 1997,  due to a  decrease  in legal
expenses during the three months and six months ended June 30, 1998.  During the
six months ended June 30, 1997,  the  Partnership  recognized  legal expenses of
approximately  $130,000 related to the Nations Air Express, Inc. default and the
Viscount default and Chapter 11 bankruptcy  filing.  During the six months ended
June 30, 1998, the Partnership  recognized legal expenses of only $3,514 related
to the Braniff bankruptcy.

                                       9
<PAGE>


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 six months ended June 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 six months ended June 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 $1,651,567 as of June 30, 1998.

The Partnership  received  payments of approximately  $15,000 and $64,000 during
the three months and six months ended June 30, 1998,  respectively,  compared to
payments of  approximately  $50,000 and $136,000 during the three and six months
ended  June  30,  1997,  respectively,  from  the  sale of  parts  from the four
disassembled aircraft.

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 - Cash distributions to limited partners were $1,349,832,  or
$8.00 per limited  partnership  unit for the six months  ended June 30, 1998 and
1997. 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.


                                       10


<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 period  ended March 31, 1998,
there are a number  of  pending  legal  actions  or  proceedings  involving  the
Partnership.  There have been no material  developments with respect to any such
actions or proceedings during the period covered by this report.

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 period ended March 31,
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.







                                       11

<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, 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)









                                       12