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, 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 September 30, 1997




                                      INDEX



Part I.       Financial Information                                        Page

         Item 1.  Financial Statements

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

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

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

              d)  Statements of Cash Flows - Nine Months
                  Ended September 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)

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

CASH AND CASH EQUIVALENTS                          $  6,206,590   $ 10,065,652

RENT AND OTHER RECEIVABLES, net of allowance for
   credit losses of $30,365 in 1997 and $233,913
   in 1996                                                 --           18,816

NOTES RECEIVABLE, net of  allowance for credit
   losses of $0 in 1997 and $177,537 in 1996               --          418,145

AIRCRAFT AND AIRCRAFT ENGINES, net
   of accumulated depreciation of $56,250 in 1997
   and $20,823,462 in 1996                              903,750      3,751,387
                                                   ------------   ------------

                                                   $  7,110,340   $ 14,254,000
                                                   ============   ============


LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):

PAYABLE TO AFFILIATES                              $    137,717   $     77,676

ACCOUNTS PAYABLE AND ACCRUED
   LIABILITIES                                          341,348        464,603

LESSEE SECURITY DEPOSITS                                 95,000         70,925

MAINTENANCE RESERVES                                  1,345,123      3,217,368

DEFERRED INCOME                                          21,290           --
                                                   ------------   ------------

        Total Liabilities                             1,940,478      3,830,572
                                                   ------------   ------------

PARTNERS' CAPITAL (DEFICIT):
   General Partner                                     (676,951)      (624,341)
   Limited Partners, 168,729 units
      issued and outstanding                          5,846,813     11,047,769
                                                   ------------   ------------

        Total Partners' Capital                       5,169,862     10,423,428
                                                   ------------   ------------

                                                   $  7,110,340   $ 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     Nine Months Ended
                                          September 30,         September 30,
                                          -------------         -------------
                                         1997      1996       1997        1996
                                         ----      ----       ----        ----
<S>                                   <C>      <C>        <C>        <C>  
REVENUES:
   Rent from operating leases         $ 90,000 $ 475,000  $  270,000 $ 1,463,900
   Interest                             85,841   126,711     418,994     365,021
   Gain on sale of aircraft               --        --     1,832,673        --
   Gain on sale of aircraft inventory   86,382    89,738     222,602     346,508
   Lessee settlement and other         690,946       468     691,726      15,033
                                      -------- ---------  ---------- -----------

           Total Revenues              953,169   691,917   3,435,995   2,190,462
                                      -------- ---------  ---------- -----------

EXPENSES:
   Depreciation                          3,750   314,182      11,250     942,546
   Management fees to general partner    4,500    24,337      13,500      58,837
   Provision for credit losses          30,365   354,019      30,365     663,600
   Operating                            49,502   104,698     208,843     381,048
   Administration and other             44,629    35,351     129,760     116,178
                                      -------- ---------  ---------- -----------

           Total Expenses              132,746   832,587     393,718   2,162,209
                                      -------- ---------  ---------- -----------

NET INCOME (LOSS)                     $820,423 $(140,670) $3,042,277 $    28,253
                                      ======== =========  ========== ===========

NET INCOME (LOSS) ALLOCATED
   TO THE GENERAL PARTNER             $619,786 $  (1,407) $  776,974 $   253,351
                                      ======== =========  ========== ===========

NET INCOME (LOSS) ALLOCATED
   TO LIMITED PARTNERS                $200,637 $(139,263) $2,265,303 $  (225,098)
                                      ======== =========  ========== ===========

NET INCOME (LOSS) PER LIMITED
   PARTNERSHIP UNIT                   $   1.19 $   (0.83) $    13.43 $     (1.33)
                                      ======== =========  ========== ===========


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

<PAGE>
<TABLE>


                         POLARIS AIRCRAFT INCOME FUND I

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

<CAPTION>
                                      Year Ended December 31, 1996 and
                                    Nine Months Ended September 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                        776,974      2,265,303      3,042,277

   Cash distributions to partners   (829,584)    (7,466,259)    (8,295,843)
                                   ---------   ------------   ------------

Balance, September 30, 1997        $(676,951)  $  5,846,813   $  5,169,862
                                   =========   ============   ============

        The accompanying notes are an integral part of these statements.
</TABLE>
                                        5

<PAGE>
<TABLE>


                         POLARIS AIRCRAFT INCOME FUND I

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>

                                                      Nine Months Ended September 30,
                                                      -------------------------------
                                                             1997          1996
                                                             ----          ----
<S>                                                     <C>           <C>
OPERATING ACTIVITIES:
   Net income                                           $  3,042,277  $    28,253
   Adjustments to reconcile net income to
      net cash provided by operating activities:
      Depreciation                                            11,250      942,546
      Gain on sale of aircraft inventory                    (222,602)        --
      Gain on sale of aircraft                            (1,832,673)        --
      Net provision for credit losses                           --       (471,908)
      Changes in  operating  assets and  liabilities,
        net of effects of sale of aircraft:
        Decrease in rent and other receivables                18,816      799,220
        Increase in payable to affiliates                     60,041          149
        Increase (decrease) in accounts payable
           and accrued liabilities                          (123,255)     318,115
        Increase in deferred income                           21,290         --
        Increase (decrease) in lessee security deposits       24,075      (75,000)
        Increase in maintenance reserves                     176,815    1,129,127
                                                        ------------  -----------

           Net cash provided by operating activities       1,176,034    2,670,502
                                                        ------------  -----------

INVESTING ACTIVITIES:
   Proceeds from sale of aircraft                          2,620,000         --
   Principal payments on note receivable                     418,145       68,060
   Net proceeds from sale of aircraft inventory              222,602         --
                                                        ------------  -----------

           Net cash provided by investing activities       3,260,747       68,060
                                                        ------------  -----------

FINANCING ACTIVITIES:
   Cash distributions to partners                         (8,295,843)  (2,812,150)
                                                        ------------  -----------

           Net cash used in financing activities          (8,295,843)  (2,812,150)
                                                        ------------  -----------

CHANGES IN CASH AND CASH
   EQUIVALENTS                                            (3,859,062)     (73,588)

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

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                        $  6,206,590  $ 9,733,727
                                                        ============  ===========

        The accompanying notes are an integral part of these statements.
</TABLE>
                                        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 (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.    Engine Note Receivable

In April 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.


5.    Nations Air Settlement

As previously  reported,  First Security Bank,  National  Association  (FSB), as
owner 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 the Partnership's aircraft. 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


                                        7

<PAGE>



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 PHC's aircraft (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, as
owner  trustee for PHC,  sold the PHC  Aircraft to Nations  Air's  designee  and
received  the  purchase  price  of $3.3  million.  On  September  29,  1997  the
Partnership  received  $690,946 as its share of the  settlement  payment  before
legal expenses.


6.    Engine Lease to CanAir

In April 1997, the Partnership  and CanAir Cargo Ltd.  (CanAir) agreed to extend
the engine leases for seven months beyond the original lease  expiration date of
May 1997.

On July 28,  1997,  CanAir  obtained  an order  under the  Companies'  Creditors
Arrangement  Act of Canada (the CCAA  Order) from the Ontario  Court of Justice,
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 leased three engines from the Partnership, and a total of five
aircraft from Polaris Holding Company (PHC) and General Electric Capital Leasing
Canada,  Inc.  (GECL  Canada).  CanAir had defaulted on its July and August 1997
engine rent and maintenance reserve payment  obligations to the Partnership.  On
August 22, 1997, GE Capital  Aviation  Services,  Inc. (GECAS) as agent for PHC,
GECL Canada and the Partnership (together,  the GECAS Parties),  entered into an
Aircraft Lease Purchase  Agreement with Royal Aviation Inc. and Royal Cargo Inc.
for the transfer of CanAir's  future lease  obligations  to Royal  Aviation Inc.
Pursuant  to this  agreement,  the leases  were  extended  to August 2000 at the
current lease rate and the  Partnership  received a security  deposit of $45,000
from Royal Aviation.

CanAir still owes the GECAS Parties a total of  approximately  $1.5 million.  Of
this amount,  approximately  $30,365 is owed to the Partnership under the engine
lease,   exclusive  of  accrued   interest  and   maintenance   reserve  payment
obligations. On October 29, 1997, CanAir filed a plan of reorganization with the
court,  which is subject to the  approval of CanAir's  creditors  and the court.
Pursuant to the plan of reorganization, CanAir proposes to pay the GECAS Parties
approximately  $800,000  from  CanAir's  future cash flows,  with payment of the
outstanding  balance  to be  deferred  and  subordinated  to  other  classes  of
creditors.  There can be no assurance  about the likelihood of the GECAS Parties
receiving the outstanding amounts from CanAir or when any such payments would be
made  pursuant to the plan of  reorganization.  The court  ordered an  extension
until November 20, 1997 of the stay under the CCAA Order in order to hold a vote
of  creditors  to approve  the plan.  The vote of  creditors  is  scheduled  for
November 17, 1997.

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.




                                        8

<PAGE>



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 the
                                        Three Months Ended        Payable at
                                        September 30, 1997    September 30, 1997
                                        ------------------    ------------------

Aircraft Management Fees                   $     -              $     4,500

Out-of-Pocket Administrative Expense
    Reimbursement                              44,496                24,229

Out-of-Pocket Operating and
    Remarketing Expense Reimbursement          11,612               108,988
                                           ----------            ----------

                                           $   56,108           $   137,717
                                           ==========           ===========


                                        9

<PAGE>



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

At September 30, 1997,  Polaris Aircraft Income Fund I (the  Partnership)  owned
three spare  engines and certain  inventoried  aircraft  parts.  The three spare
engines were leased to CanAir Cargo Ltd.  (CanAir).  CanAir's future obligations
under the lease have been  transferred to Royal Aviation,  Inc., as discussed in
Note 6. 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

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.

Engine Note Receivable - In April 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 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  CanAir - 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 Note 6 to the financial statements.

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.

On August 22, 1997, GE Capital Aviation Services, Inc. (GECAS) as agent for PHC,
GECL  Canada and the  Partnership,  entered  into an  "Aircraft  Lease  Purchase
Agreement"  with Royal Aviation Inc. and Royal Cargo Inc.  (Royal Cargo) for the


                                       10

<PAGE>



transfer of the leases with CanAir. Pursuant to this agreement,  the leases were
extended to August 2000 at the current lease rate and the Partnership received a
security deposit of $45,000 from Royal Cargo.


Partnership Operations

The  Partnership  recorded  net  income  of  $820,423,   or  $1.19  per  limited
partnership  unit, for the three months ended September 30, 1997,  compared to a
net loss of $140,670, or $0.83 per limited partnership unit, for the same period
in 1996.  The  Partnership  recorded  net  income of  $3,042,277,  or $13.43 per
limited partnership unit, for the nine months ended September 30, 1997, compared
to net income of $28,253 or an allocated net loss of $1.33 per unit for the same
period in 1996. The Partnership  reported improved  operating results during the
three and nine months ended  September 30, 1997, as compared to the same periods
in 1996.

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.  Included in revenues for the nine months ended September
30,  1997,  is a gain from the sale of three  aircraft  totaling  $1,832,673  as
previously discussed in the notes to the financial statements.

During the third  quarter of 1997,  the  Partnership  recorded an allowance  for
credit losses of $30,365  against the net outstanding  receivables  from CanAir.
The  Partnership  recorded an allowance for credit losses of $309,581 during the
first quarter of 1996 for certain unpaid rent and accrued  interest  receivables
from Viscount as a result of Viscount's  default on certain  obligations due the
Partnership  and  Viscount's   subsequent  bankruptcy  filing.  The  Partnership
recorded an allowance for credit losses of $354,019  during the third quarter of
1996 for  Viscount's  outstanding  balance  of the line of  credit  and  accrued
interest.   In  addition,   the   Partnership   recognized   legal  expenses  of
approximately   $375,000  related  to  the  Viscount  defaults  and  Chapter  11
bankruptcy  filing.  These legal costs are included in operating  expense in the
Partnership's  statement of operations  for the nine months ended  September 30,
1996.


Nations Air Settlement

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 the  Partnership's  aircraft.  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 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 PHC's aircraft (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, as owner  trustee for PHC, sold the PHC Aircraft to
Nations  Air's  designee and received the  purchase  price of $3.3  million.  On
September  29,  1997  the  Partnership  received  $690,946  as its  share of the
settlement payment before legal expenses.


Liquidity and Cash Distributions

Liquidity - The Partnership  receives engine  maintenance  reserve payments from
its lessee that may be reimbursed to the lessee or applied against certain costs
incurred by the Partnership for maintenance work performed on the  Partnership's
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


                                       11

<PAGE>



future  maintenance  expenses  or  recognized  as revenue.  The net  maintenance
reserves balances aggregate $1,345,123 as of September 30, 1997.

Cash Distributions - Cash distributions to limited partners for the three months
ended  September  30, 1997 were  $6,116,427,  or $36.25 per limited  partnership
unit. There were no cash  distributions to limited partners for the three months
ended  September 30, 1996. Cash  distributions  were  $7,466,259,  or $44.25 per
limited partnership unit and $2,530,935, or $15.00 per unit, for the nine months
ended September 30, 1997 and 1996, 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  receipt of rental payments
from Royal Cargo.

                                       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 periods  ended March 31, 1997
and June 30, 1997,  there are a number of pending legal  actions or  proceedings
involving  the  Partnership.  Except  as  discussed  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 - On July 28,  1997,  CanAir  obtained an order  under the  Companies'
Creditors  Arrangement  Act of Canada (the CCAA Order) from the Ontario Court of
Justice,   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 leased three engines from the Partnership, and a total of five
aircraft from Polaris Holding Company (PHC) and General Electric Capital Leasing
Canada,  Inc.  (GECL  Canada).  CanAir had defaulted on its July and August 1997
engine rent and maintenance reserve payment  obligations to the Partnership.  On
August 22, 1997, GE Capital  Aviation  Services,  Inc. (GECAS) as agent for PHC,
GECL Canada and the Partnership (together,  the GECAS Parties),  entered into an
Aircraft Lease Purchase  Agreement with Royal Aviation Inc. and Royal Cargo Inc.
for the transfer of CanAir's future lease obligations to Royal Aviation Inc., as
described  in Item 2, under the caption  "Remarketing  Update -- Engine Lease to
CanAir."

CanAir still owes the GECAS Parties a total of  approximately  $1.5 million.  Of
this amount,  approximately  $30,365 is owed to the Partnership under the engine
lease,   exclusive  of  accrued   interest  and   maintenance   reserve  payment
obligations. On October 29, 1997, CanAir filed a plan of reorganization with the
court,  which is subject to the  approval of CanAir's  creditors  and the court.
Pursuant to the plan of reorganization, CanAir proposes to pay the GECAS Parties
approximately  $800,000  from  CanAir's  future cash flows,  with payment of the
outstanding  balance  to be  deferred  and  subordinated  to  other  classes  of
creditors.  There can be no assurance  about the likelihood of the GECAS Parties
receiving the outstanding amounts from CanAir or when any such payments would be
made  pursuant to the plan of  reorganization.  The court  ordered an  extension
until November 20, 1997 of the stay under the CCAA Order in order to hold a vote
of  creditors  to approve  the plan.  The vote of  creditors  is  scheduled  for
November 17, 1997.

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 periods ended June 30,
1997 and 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  actions.  There have been no  material  developments  with
respect to any of the actions  described  therein  during the period  covered by
this report.




                                       13

<PAGE>



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




        November 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