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


                                    FORM 10-Q


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998



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


                           Commission File No. 1-8461

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


                        GULFSTREAM AEROSPACE CORPORATION
                                 P. O. Box 2206
                               500 Gulfstream Road
                          Savannah, Georgia 31402-2206
                            Telephone: (912) 965-3000
                        State of incorporation: Delaware
                      IRS identification number: 13-3554834


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


     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 (or for such shorter
period that the registrant was required to file such reports),  and (2) has
been  subject to such filing  requirements  for the past 90 days.  Yes X No
______                                                                ---

     As of  May  1,  1998,  there  were  72,680,919  shares  of  Gulfstream
Aerospace Corporation Common Stock outstanding.

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             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES



                                   INDEX



                       PART I. FINANCIAL INFORMATION


                                                                Page No.
                                                                ---------

Item 1.  Consolidated Financial Statements:

               Consolidated Balance Sheets
                March 31, 1998 and December 31,                    
                1997............................................      3

               Consolidated Statements of Income
                Three months ended March 31, 1998 and               
                1997............................................      4 

               Consolidated Statement of Stockholders' Equity
                Three months ended March 31,                       
                1998............................................      5

               Consolidated Statements of Cash Flows
                Three months ended March 31, 1998 and 
                1997............................................      6

               Notes to Consolidated Financial
                Statements.....................................      7-9


Item 2.  Management's Discussion and Analysis of Financial         10-12
           Condition and Results of Operations




                          PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.....................................       13

Item 2.  Changes in  Securities................................       13

Item 3.  Defaults upon Senior Securities.......................       13

Item 4.  Submission of Matters to a Vote of Security
           Holders..........................................          13

Item 5.  Other Information......................................      13

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

         Signature..............................................      14


             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                        Consolidated Balance Sheets
                     (In thousands, except share data)
                                (Unaudited)


                                         March 31,       December 31,
                                           1998            1997
                                        -----------      -----------
Assets

Cash and cash equivalents                $  183,214     $  306,451
Accounts  receivable (less allowance
  for doubtful accounts:
  $1,109 and $1,144)                        141,445        177,228
Inventories                                 708,545        629,876
Deferred income taxes                        19,372         33,795
Prepaids and other assets                     7,466         11,318
                                         ----------     ----------
 Total current assets                     1,060,042      1,158,668

Property and equipment, net                 133,744        134,611
Tooling,  net  of  accumulated
 amortization: $9,500 and $7,680             41,759         43,471

Goodwill,  net of  accumulated
 amortization: $8,735 and $8,433             38,655         38,957

Other intangible assets, net                 49,217         50,485
Deferred income taxes                        31,700         32,950
Other assets and deferred charges            14,528         14,525
                                         ----------     ----------

Total Assets                             $1,369,645     $1,473,667
                                         ==========     ==========


Liabilities and Stockholders' Equity
Current portion of long-term debt     $      75,000   $      75,000
Accounts payable                            164,854         147,618
Accrued liabilities                          91,450          93,798
Customer deposits--current portion          471,538         546,441
                                      -------------   -------------
  Total current liabilities                 802,842         862,857
Long-term debt                              286,250         305,000
Accrued postretirement benefit cost         116,885         115,405
Customer deposits--long-term                 85,869          88,075
Other long-term liabilities                   8,826           9,573
Commitments and contingencies
Stockholders' equity
 Common stock; $.01 par value;
 300,000,000   shares authorized;
 87,133,546 shares issued
 in 1998 and 86,522,089 share
 issued in 1997                                 871             865
 Additional paid-in capital                 380,237         370,258
Accumulated deficit                        (185,479)       (225,960)
Minimum pension liability                      (762)           (762)
Unamortized stock plan expense                 (826)         (1,155)
Less:  Treasury stock:
 14,463,439 shares  in 1998 and
 11,978,439 shares in 1997                 (125,068)        (50,489)
                                      -------------   -------------
Total stockholders' equity                   68,973          92,757
                                      -------------   -------------
Total Liabilities and Stockholders'
 Equity                               $   1,369,645   $   1,473,667
                                      =============   =============




See notes to consolidated financial statements



             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                     Consolidated Statements of Income
                   (In thousands, except per share data)
                                (Unaudited)




                                      Three months ended
                                           March 31,
                                     ----------------------
                                       1998        1997
                                     ----------  ----------
Net revenues                         $ 503,407   $ 375,626
Cost and expenses
  Cost of sales                        404,069     305,152
  Selling and administrative            25,942      22,615
  Stock option compensation expense        329         522
  Research and development               1,945      (1,520)
  Amortization of intangibles
  and deferred charges                   1,876       1,820
                                     ---------   ---------
    Total costs and expenses         $ 434,161   $ 328,589
                                     ---------   ---------
Income from operations                  69,246      47,037
Interest income                          2,522       3,123
Interest expense                        (6,999)     (8,130)
                                     ---------   ---------
Income before income taxes              64,769      42,030
Income tax expense                      24,288       2,000
Net income                           $  40,481   $  40,030
                                     =========   =========
Earnings per share:
 Net income per share-basic          $     .56   $     .54
                                     =========   =========
 Net income per share-diluted        $     .54   $     .51
                                     =========   =========

See notes to consolidated financial statements




             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

               Consolidated Statement of Stockholders' Equity
                               (In thousands)
                                (Unaudited)

<TABLE>
<CAPTION>

                                                                     Unamortized
                                     Additional           Minimum    Stock         Total
                            Common   Paid-In  Accumulated Pension    Plan          Treasury   Stockholders'
                            Stock    Capital  Deficit     Liability  Expense       Stock      Equity
                            ----------------------------------------------------------------------
<S>                          <C>    <C>        <C>        <C>       <C>            <C>       <C>
BALANCE AS OF
DECEMBER 31, 1997          $865  $370,258  $(225,960)      $(762)   $(1,155)     $(50,489)    $92,757
Net income                                     40,481                                          40,481
Amortization of stock plan     
expense                                                                 329                       329
Tax benefit of exercised                                                          
common stock options                7,989                                                       7,989
Exercise of common stock
options                       6     1,990                                                       1,996
Purchase of treasury stock                                                        (74,579)    (74,579)
                            --------------------------------------------------------------------------
                          
BALANCE AS OF
MARCH 31, 1998              $871   $380,237  $(185,479)     $(762)    $ (826)    $(125,068)    $68,973
                            ====   ========  =========       =====     ======     =========    =======

</TABLE>

See notes to consolidated financial statements



             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                   Consolidated Statements of Cash Flows
                               (In thousands)
                                (Unaudited)


                                                   Three months ended
                                                       March 31,
                                                 -----------------------
                                                     1998       1997
                                                 -----------  ----------
Cash Flows from Operating Activities
Net income                                       $ 40,481   $ 40,030
Adjustments to reconcile net
  income  to  net  cash  provided
  by operating activities:
  Depreciation and amortization                     8,292      7,832
  Postretirement benefit cost                       1,480      1,799
  Non-cash stock option compensation
  expense                                             329        522
  Deferred income tax benefit                      23,662
  Other, net                                           86     (1,595)
  Change in assets and liabilities:
   Accounts receivable                             35,697     13,903
   Inventories                                    (78,669)    25,732
   Prepaids, other assets, and deferred charges     3,543     (1,343)
   Accounts payable and accrued liabilities        14,888    (22,217)
   Customer deposits                              (77,109)   (95,248)
   Other long-term liabilities                       (747)      (157)
                                                 --------   --------
Net Cash Used in Operating Activities             (28,067)   (30,742)

Cash Flows from Investing Activities
Expenditures for property and equipment            (3,729)    (2,267)
Expenditures for tooling                             (108)      (160)
                                                 --------   --------
Net Cash Used in Investing Activities              (3,837)    (2,427)

Cash Flows from Financing Activities
Proceeds from exercise of stock options             1,996        507
Principal payment of long-term debt               (18,750)
Purchase of treasury stock                        (74,579)
                                                 --------   --------
Net Cash Provided by (Used in)
Financing Activities                              (91,333)       507
                                                 --------   --------
Decrease in cash and cash equivalents            (123,237)   (32,662)
Cash and cash equivalents, beginning of period    306,451    233,172
                                                  -------    -------
Cash and cash equivalents, end of period          $183,214   $200,510
                                                  =======    =======


See notes to consolidated financial statements


             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   Basis of Presentation

          The accompanying unaudited consolidated financial statements have
been prepared by the Company  pursuant to the rules of the  Securities  and
Exchange Commission ("SEC") and, in the opinion of the Company, include all
adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of financial  position,  results of operations and cash
flows.  Certain information and footnote  disclosures  normally included in
financial   statements  prepared  in  accordance  with  generally  accepted
accounting principles have been condensed or omitted pursuant to SEC rules.
The  operating  results for the three  months  ended March 31, 1998 are not
necessarily  indicative  of the results to be expected  for the entire year
ended  December  31, 1998.  These  financial  statements  should be read in
conjunction  with the consolidated  financial  statements and notes thereto
for the year ended  December 31, 1997 included in the Company's 1997 Annual
Report to Stockholders.

NOTE 2.   Earnings per Share

          Basic  earnings per share were computed by dividing net income by
the  weighted  average  common  shares   outstanding   during  the  periods
presented.  Diluted earnings per share were computed by dividing net income
by  the  weighted   average  common  shares  and  potential  common  shares
outstanding.  The Company adopted Financial Accounting Standards Board SFAS
No. 128, Earnings per Share,  effective December 15, 1997. As a result, all
earnings per share  information  for prior  periods  have been  restated to
conform to the requirements of SFAS No. 128.

          The following  table sets forth the  reconciliation  of per share
data as of:
                                             Three months ended
                                                March 31,
                                         ---------------------
                                            1998       1997
                                         ----------  ---------

Net Income                                  $40,481  $40,030
                                            =======  =======

Basic EPS
Weighted average common shares outstanding   72,533   73,920
                                            -------  -------

Diluted EPS
Incremental shares from stock options         2,818    4,637
                                            -------  -------
Weighted average common and common
   equivalent shares outstanding             75,351   78,557
                                            =======  =======

Earnings Per Share:
  Net income per share - basic              $   .56  $   .54
                                            =======  =======
  Net income per share - diluted            $   .54  $   .51
                                            =======  =======

          On a pro forma basis,  assuming an  effective  tax rate of 37.5%,
the Company's basic and diluted earnings per share is as follows:

                                           Three months ended
                                                March 31,
                                          ----------------------
                                             1998        1997
                                          ----------  -----------
Pro forma Earnings Per Share:
  Net income per share - basic               $.56    $   .36
                                             ====    =======
  Net income per share - diluted             $.54    $   .33
                                              ====   =======


             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.   Inventories

          Inventories consisted of the following at:

                                 March 31,     December 31,
                                   1998           1997
                               -----------    ------------
                                      (In thousands)
Work in process                 $352,626        $330,155
Raw materials                    142,581         134,973
Vendor progress payments          74,876          60,606
Pre-owned aircraft               138,462         104,142
                                $708,545        $629,876
                                ========        ========

NOTE 4.   Income Taxes

          The Company  recorded an income tax provision of $24.3 million in
the first quarter of 1998 based on an estimated effective tax rate of 37.5%
compared  with a provision  of income taxes of $2.0  million,  representing
alternative  minimum taxes,  in the first quarter 1997.  Prior to September
30, 1997,  the Company  recorded no provision for income taxes,  other than
alternative  minimum  taxes,  principally as a result of utilization of net
operating loss carryforwards. The Company had available at March 31, 1998 a
net operating loss  carryforward for regular federal income tax purposes of
approximately $11.7 million, which will begin expiring in 2006.

NOTE 5.   Commitments and Contingencies

          In  the  normal   course  of  business,   lawsuits,   claims  and
proceedings  have been or may be instituted or asserted against the Company
relating to various matters,  including  products  liability.  Although the
outcome of litigation cannot be predicted with certainty and some lawsuits,
claims or  proceedings  may be  disposed  of  unfavorably  to the  Company,
management  has made  provision for all known  probable  losses  related to
lawsuits and claims and believes that the  disposition of all matters which
are  pending or  asserted  will not have a material  adverse  effect on the
financial statements of the Company.

          The  Company is involved  in tax audits by the  Internal  Revenue
Service  covering the years 1990 through 1994. The revenue  agent's reports
include several proposed adjustments involving the deductibility of certain
compensation expense,  items relating to the initial  capitalization of the
Company,  the allocation of the original purchase price for the acquisition
by the Company of the  Gulfstream  business,  including  the  treatment  of
advance  payments  with  respect to and the cost of  aircraft  that were in
backlog at the time of the  acquisition,  and the  amortization  of amounts
allocated to  intangible  assets.  The Company  believes  that the ultimate
resolution of these issues will not have a material  adverse  effect on its
financial  statements because the financial statements already reflect what
the Company currently believes is the expected loss of benefit arising from
the resolution of these issues.

          The Company is currently engaged in the monitoring and cleanup of
certain  ground water at its Savannah  facility  under the oversight of the
Georgia Department of Natural Resources. Expenses incurred for cleanup have
not  been   significant.   Liabilities  are  recorded  when   environmental
assessments  and/or  remedial  efforts  are  probable  and the costs can be
reasonably  estimated.  The Company  believes the remainder of the Savannah
facility,  as well as other  Gulfstream  properties,  are  being  carefully
monitored and are in substantial compliance with current federal, state and
local environmental regulations.  The Company believes the liabilities,  if
any, that will result from the above environmental  matters will not have a
material adverse effect on its financial statements.


             GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.   Common Stock Repurchases

          During  January 1998,  the Company began the  repurchase of up to
$200 million of its common stock.  The  repurchase  will be funded from the
Company's available cash. As of March 31, 1998, the Company had repurchased
approximately  2.5 million shares, at an average price of $30.01 per share,
for an aggregate amount of $74.6 million.

NOTE 7.   Change in Accounting Principles

          Effective  January 1, 1998,  the  Company  adopted  Statement  of
Financial  Accounting  Standards No. 130, Reporting  Comprehensive  Income.
This  Statement   requires   disclosure  of  total   nonowner   changes  in
stockholders'  equity,  which is defined as net income plus certain  direct
adjustments to stockholders' equity such as pension liability  adjustments.
For  the  first  quarter  of  1998  and  1997,  the  Company  had  no  such
adjustments.

NOTE 8.   New Accounting Standard

          In June 1997,  the Financial  Accounting  Standards  Board issued
SFAS No.  131,  Disclosures  about  Segments of an  Enterprise  and Related
Information, which is effective no later than for the Company's 1998 fiscal
year-end.  Management believes that the adoption of this statement will not
have a material effect on the Company's consolidated financial statements.

NOTE 9.   Subsequent Event

          On April 21, 1998, the Company filed a registration  statement on
Form  S-3 with  the  Securities  and  Exchange  Commission  for the sale of
18,000,000 shares of common stock in a secondary offering (the "Offering").
The Company will not receive any of the proceeds from the sale of shares in
the Offering.  In connection with the Offering,  certain current and former
directors  and  employees  of, and advisors to, the Company are expected to
exercise  stock options to purchase,  in the aggregate,  approximately  2.9
million  shares of common stock from the Company for an aggregate  exercise
price of approximately $28.7 million; all of such shares are expected to be
sold in the Offering.


                    MANAGEMENT'S DISCUSSION AND ANALYSIS
              OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


          The following  discussion  should be read in conjunction with the
Notes to  Consolidated  Financial  Statements  beginning on page 7 and with
Management's  Discussion and Analysis of Financial Condition and Results of
Operations  (MD&A) and the audited  consolidated  financial  statements and
notes to consolidated  financial statements appearing in the Company's 1997
Annual Report to Stockholders.

COMPARISON OF RESULTS OF  OPERATIONS  FOR THE QUARTER ENDED MARCH 31, 1998
AND 1997

          Net Revenues.  Total net revenues increased by $127.8 million, or
34.0%,  to $503.4  million in the first quarter of 1998 from $375.6 million
in the first quarter of 1997. The significant  increase resulted  primarily
from an increase in revenues  from green  aircraft of $62.8  million as the
Company  delivered  13 aircraft,  seven  Gulfstream  Vs and six  Gulfstream
IV-SPs, as compared with 11 aircraft, six Gulfstream Vs and five Gulfstream
IV-SPs, in the first quarter of 1997. In addition, revenues associated with
the sale of pre-owned aircraft increased by $47.6 million as two additional
units were delivered in 1998. Also contributing to the increase in revenues
was an increase in completion  revenues of $13.9  million,  resulting  from
Gulfstream V completion deliveries.

          Cost of Sales. Total cost of sales increased to $404.1 million in
the first quarter of 1998 from $305.2 million in the first quarter of 1997.
The  increase  was a result of the higher  number of green,  pre-owned  and
completion  aircraft  deliveries   discussed  above.   Excluding  pre-owned
aircraft,  which generally are sold at break-even  levels, the gross profit
percentage  for the first  quarter of 1998 was 22.1%  compared to 20.0% for
the first  quarter of 1997.  This  increase is  primarily  attributable  to
reductions in Gulfstream V aircraft production costs.

          Selling and  Administrative  Expense.  Selling and administrative
expense  increased by $3.3 million,  or 14.7% to $25.9 million in the first
quarter of 1998 from $22.6 million in the first  quarter of 1997,  and as a
percentage of net revenues,  decreased to 5.2% in the first quarter of 1998
from 6.0% in the first quarter of 1997 due to the higher level of revenues.

          Research  and  Development  Expense.   Research  and  development
expense  was $1.9  million in the first  quarter of 1998,  as  compared  to
$(1.5)  million in the first  quarter  of 1997.  Research  and  development
expense  for 1997 is net of a $10.0  million  credit for launch  assistance
funds  received  from  vendors  participating  in  the  development  of the
Gulfstream  V.  Research  and  development  expenditures  in  1998  and the
near-term future are expected to stem principally from product improvements
and enhancements, rather than new aircraft development.

          Interest Income and Expense.  Interest  income  decreased by $0.6
million to $2.5  million in the first  quarter of 1998 from $3.1 million in
the first  quarter of 1997 as a result of lower  average cash  balances the
Company  had  invested  during  1998  compared  to the same period of 1997.
Interest  expense  decreased  by $1.1 million to $7.0 million for the first
quarter of 1998.  This  decrease  is  attributable  to both a  decrease  in
average borrowings and lower weighted average interest rates.

          Income  Taxes.  The Company  recorded an income tax  provision of
$24.3  million in the first  quarter of 1998 based on an  estimated  annual
effective  tax rate of 37.5%  compared  with a provision of income taxes of
$2.0 million,  representing alternative minimum taxes, in the first quarter
1997.  Prior to September 30, 1997,  the Company  recorded no provision for
income taxes, other than alternative minimum taxes, principally as a result
of  utilization  of net  operating  loss  carryforwards.  The  Company  had
available at March 31, 1998 a net operating loss  carryforward  for regular
federal income tax purposes of approximately $11.7 million which will begin
expiring in 2006.

          Earnings Per Share.  The Company  reported  diluted  earnings per
share of $0.54 for the first  quarter of 1998,  up from $0.51 for the first
quarter of 1997. On a pro forma fully - taxed basis,  assuming an effective
tax rate of 37.5%,  comparable  diluted  earnings per share would have been
$0.33 for the first quarter of 1997.


Liquidity and Capital Resources

          The  Company's   liquidity   needs  arise  from  working  capital
requirements,  capital  expenditures,  principal  and interest  payments on
long-term debt and the Company's share repurchase  program described below.
During the first quarter of 1998 the Company  relied on its available  cash
balances to fund these needs.

          The Company had cash and cash equivalents totaling $183.2 million
at March 31, 1998 down from $306.4 million at December 31, 1997. During the
first  quarter of 1998,  net cash used in  operating  activities  was $28.1
million compared with the first quarter of 1997 when the Company used $30.7
million in cash from operations.

          During  the first  quarter of 1998,  additions  to  property  and
equipment amounted to $3.7 million.  At March 31, 1998, the Company was not
committed  to the  purchase  of any  significant  amount  of  property  and
equipment.  As a result of the Company's  strategic  initiative to increase
its annual  production  rate to  approximately  60  aircraft  by 1999,  the
Company's capital  expenditures  increased $15 million in 1997, and in 1998
are  expected  to  increase by  approximately  another  $20  million  above
previously  planned annual levels of approximately $15 million.  During the
first  quarter of 1998,  the  Company  completed a new $8.5  million  paint
facility located at its Long Beach,  California facility.  This facility is
part of the Company's 60 aircraft plan and will allow the Company to double
its present volume of painting new,  pre-owned and customer  aircraft.  The
Company  continually  monitors its capital  spending in relation to current
and anticipated  business needs. As circumstances  dictate,  facilities are
added, consolidated or modernized.

          In January 1998, the Company  established a program to repurchase
up to $200 million of its common  stock.  The  purchases  will be made from
time to time in the open  market  or  through  negotiated  transactions  as
market conditions warrant.  The Company expects to fund the stock purchases
from cash on hand. As of March 31, 1998,  approximately 2.5 million shares,
at an average price of $30.01 per share,  had been  repurchased  under this
plan for an aggregate amount of $74.6 million.

          At  March  31,  1998, borrowings  under  the  Company's  credit
facilities were $361.3 million, with available borrowings of $172.6 million
under a revolving  credit  facility.  Scheduled  repayments  under the term
facility  are $75.0  million in each of the years 1998  through  2001,  and
$80.0 million in 2002. The Credit Agreement contains customary  affirmative
and negative covenants including restrictions on the ability of the Company
and its subsidiaries to pay cash dividends,  as well as financial covenants
under which the Company must operate. As of March 31, 1998, the Company was
in compliance with the covenants of its existing credit agreement.

          The Company's  principal source of liquidity both on a short-term
and long-term basis is cash flow provided by operations, including customer
progress  payments  and  deposits  on new  aircraft  orders.  Occasionally,
however,  the Company may borrow against the credit agreement to supplement
cash flow  from  operations.  The  Company  believes  that  based  upon its
analysis of its consolidated  financial position,  its cash flow during the
past 12 months  and the  expected  results  of  operations  in the  future,
operating  cash flow and available  borrowings  under the credit  agreement
will be adequate to fund operations,  capital expenditures and debt service
for at least the next 12 months. The Company intends to repay its remaining
indebtedness  primarily  with cash flow  from  operations.  There can be no
assurance,  however,  that future industry specific developments or general
economic trends will not adversely  affect the Company's  operations or its
ability to meet its cash requirements.

          As of March 31, 1998, in connection with orders for 24 Gulfstream
V aircraft in the  backlog,  the Company  has  offered  customers  trade-in
options (which may or may not be exercised by the customer) under which the
Company will accept trade-in aircraft (primarily Gulfstream IVs and IV-SPs)
at a guaranteed  minimum trade-in price.  Additionally,  in connection with
recorded sales of new aircraft,  the Company has agreed to accept pre-owned
aircraft with trade-in values totaling $203.7 million as of March 31, 1998.
Of this  amount,  $47.1  million is under  contract for resale to pre-owned
aircraft  customers.  Management believes that the fair market value of all
such aircraft exceeds the specified trade-in value.

          On December 24, 1997, the Company  executed final  documents with
the Pension Benefit Guaranty Corporation (the "PBGC") concerning funding of
the Company's defined benefit pension plans. The terms were essentially the
same as those set out in the  agreement  in principle  reached  between the
PBGC and the Company during October 1996.  Pursuant to this agreement,  the
Company  contributed  $25.0 million in 1997, and has agreed to contribute a
total  of  $25.0   million   annually  (to  be  paid   quarterly  in  equal
installments)  from 1998 through 2000 to its pension  plans which  payments
are expected to result in such plans being fully funded. The payments to be
made  under this  agreement  were  already  part of the  Company's  overall
financial  planning,  and  therefore,  are not  expected to have a material
adverse effect on the Company's financial statements.  The funding required
under this  agreement  will not  result in any  increase  in the  Company's
annual pension expense.

Contractual Backlog

          At March 31,  1998,  Gulfstream  had a firm  contract  backlog of
approximately  $2.8  billion  of  revenues,  representing  a  total  of  88
aircraft.  The Company includes an order in backlog only if the Company has
entered into a purchase contract (with no contingencies)  with the customer
and has received a significant (generally  non-refundable) deposit from the
customer.

          During the quarter ended March 31, 1998,  the Company also signed
a  contract  for 12  Gulfstream  IV-SPs to  expand  its  highly  successful
Gulfstream Shares  fractional  ownership program to the Middle East region.
This contract is valued at  approximately  $335 million and is not included
in the Company's backlog.  In 1993, the Company  established very stringent
deposit  requirements for recording aircraft into its backlog. The contract
for the Middle East Shares expansion  includes  modestly  different deposit
requirements early in the program.  The Company has decided for the initial
phase  of the  program  to  record  these  orders  when  the  aircraft  are
delivered.  Including the Middle East contract,  the Company has a total of
100  aircraft,  valued at  approximately  $3.1 billion of potential  future
revenues, under contract.

          The Company continually monitors the condition of its backlog and
believes,  based  on  the  nature  of  its  customers  and  its  historical
experience,  that there will not be a significant  number of cancellations.
However,  to the extent  that there is a lengthy  period of time  between a
customer's  aircraft  order and its delivery  date,  there may be increased
uncertainty  as to changes in business  and economic  conditions  which may
affect customer cancellations.

Outlook

          The Company plans to deliver 58 green aircraft in fiscal 1998 and
64 in fiscal 1999.  Completions  are expected to nearly double in 1998. The
gross  margins are  expected to improve  from 20% in 1997 to the mid-20s by
the end of 1998. Based on projections of increasing aircraft production and
improving  margins,  Gulfstream  expects 1998 diluted earnings per share of
approximately $2.85. The Company also expects diluted earnings per share to
increase 15% per year in 1999 and 2000.

Forward-Looking Information Is Subject to Risk and Uncertainty

          Certain statements contained in this "Management's Discussion and
Analysis of Financial  Condition and Results of Operations",  including the
statements  under  the  heading  "Outlook",  as  well as  other  statements
elsewhere in this Form 10-Q,  contain  forward-looking  information.  These
forward-looking  statements are subject to risks and uncertainties.  Actual
results might differ materially from those projected in the forward-looking
statements.  Additional  information  concerning  factors  that could cause
actual  results to  materially  differ  from  those in the  forward-looking
statements is contained in Exhibit 99.1 to the Company's  Form 10-K for the
year ended December 31, 1997, incorporated herein by reference.


                         PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         Not Applicable.

Item 2.  Changes in Securities

         Not Applicable.

Item 3.  Defaults Upon Senior Securities

         Not Applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

         No matters  were  submitted to security  holders  during the quarter
         ended March 31, 1998.

Item 5.  Other Information

         Certain statements contained in or incorporated by reference in this
         Form 10-K contain forward-looking information. These forward-looking
         statements  are subject to risks and  uncertainties.  Actual results
         might differ materially from those projected in the  forward-looking
         statements.  Additional  information  concerning  factors that could
         cause actual  results to materially  differ from those  contained in
         the   forward-looking   statements   is  contained  in  Exhibit  99,
         Cautionary Statement for Purposes of the "Safe Harbor" Provisions of
         the  Private  Securities  Litigation  Reform  Act  of  1995  to  the
         Company's previously filed Form 10-K for the year ended December 31,
         1997.


Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

             Exhibit 10.31    Amendment  dated  February 26, 1998 to
                              Credit  Agreement among  Gulfstream  Delaware
                              Corporation,  The Chase  Manhattan  Bank, and
                              the banks and  other  financial  institutions
                              parties thereto.

             Exhibit 27.1     Financial Data Schedule.

        (b)  Report on Form 8-K

               On February 10, 1998 the Company filed a report on Form 8-K,
               reporting  under  Items 5 and 7,  disclosing  the  Company's
               Cautionary  Statement  for  Purposes  of the  "Safe  Harbor"
               Provisions of the Private  Securities  Litigation Reform Act
               of 1995,  and the Press  Release  issued  February  10, 1998
               pertaining to the Company's fiscal 1997 financial results.



                                  SIGNATURE

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated:   May 8, 1998




                                          GULFSTREAM AEROSPACE CORPORATION



                                                   /s/ Chris A. Davis
                                           ----------------------------------
                                                    Chris A. Davis
                                               Executive Vice President,
                                              Chief Financial Officer and
                                                       Secretary
                                               (Principal Financial and
                                                  Accounting Officer)


                               EXHIBIT INDEX


Exhibits

            Exhibit 10.31   Amendment dated February 26, 1998 to Credit
                            Agreement among Gulfstream Delaware
                            Corporation,  The Chase Manhattan Bank,
                            and the banks and other financial institutions 
                            parties thereto.

            Exhibit 27.1    Financial Data Schedule.