Page 9
                              
                              
                              
             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 Quarter Ended                            Commission File No.
September 30, 1997                                    33-67422




                   SABRELINER CORPORATION
   (Exact name of registrant as specified in its charter)




          Delaware                             43-1289921
(State of Incorporation)                (I.R.S. Employer
Identification No.)




                    Pierre Laclede Center
                         Suite 1500
                     7733 Forsyth Blvd.
                St. Louis Missouri 63105-1821
                       (314) 863-6880
                              
  (Name, address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
                              
                              
                              
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  report(s), and (2) has been subject  to  such  filing
requirements for the past 90 days.   YES [  ] NO [   ]

The number of shares of the Company's common stock outstanding on
October 31, 1997 was 869,934.

PART I - FINANCIAL INFORMATION
Condensed Financial Statements

                   Sabreliner Corporation
                 Consolidated Balance Sheets
                   (Dollars in Thousands)
                              
                                    Unaudited         Audited
                                  September 30,    June 30, 1997
                                       1997
Assets                                                   
Current assets:                                          
  Cash                               $ 9,431          $22,994
   Accounts receivable (net                           
allowances of $688 and $550,          21,109          29,952
respectively)
   Inventories                           32,889          31,542
   Contracts in process (net of                       
customer advances and progress                     
payments of $17,829 and               36,740          20,192
$15,143, respectively)
  Prepaid and other current            6,351           4,697
assets
     Total current assets            106,520          109,377
                                                   
Property and equipment, (net of                    
depreciation of $21,674 and           39,787          37,882
$21,286, respectively)
Deferred financing costs and           9,479           9,641
other assets
                                                   
  Total assets                       $155,786         $156,900
                                                   
Liabilities and stockholders'                      
equity
Current liabilities:                               
  Accounts payable                   $23,032          $24,997
  Accrued compensation                 5,068           7,068
  Other accrued liabilities            6,407           8,994
  Accrued interest expense             4,743           1,946
  Other current liabilities            7,216           6,338
     Total current liabilities        46,466          49,343
                                                   
Long-term debt and capital            94,768          94,863
leases
Other long-term liabilities            2,202           2,202
                                                   
Stockholders' equity                  12,350          10,492
                                                   
  Total liabilities and              $155,786         $156,900
stockholders' equity
                              
                   Sabreliner Corporation
            Consolidated Statement of Operations
                         (Unaudited)
 (Dollars in Thousands, Share and per Share Data as Stated)




                                        Three Months Ended
                                      September     September
                                      30, 1997      30, 1996
                                                   
Net revenue                            $63,153      $50,969
Cost of revenue                        49,523       41,847
  Gross margin                         13,630        9,122
Selling, general and administrative     7,549        6,746
expense
                                                   
  Operating income                      6,081        2,376
                                                   
Interest expense, net                  (2,992  )    (3,004  )
Other income (expense)                    (67  )         3
  Earnings (loss) before income         3,022         (625  )
taxes
                                                   
Income tax (expense) benefit           (1,149  )       210
                                                   
  Net income (loss)                    $1,873       $ (415  )
                                                   
                                                   
                                                   
Earnings per share data                            
                                                   
  Net earnings (loss) per common       $ 2.14       $(0.48  )
share
                                                   
  Dividends paid per common share      $ 0.00       $ 0.00
                                                   
  Average common and common              877,105      871,153
equivalent
  shares outstanding
                   Sabreliner Corporation
            Consolidated Statements of Cash flows
                         (Unaudited)
                   (Dollars in Thousands)
                              
                              
                              
                              
                              
                                          Three Months Ended
                                        September     September
                                      30, 1997      30, 1996
Cash flows from operating activities:                
Net income (loss)                        $1,873       $ (415  )
                                                     
Adjustments to reconcile net earnings                
to net cash provided by operating    
activities:
       Depreciation                       1,587        1,511
       Amortization                         322          285
       Changes in assets and             (14,201 )    (6,996  )
liabilities
                                                     
Net cash used by operating activities    (10,419 )    (5,615  )
                                                     
Cash flows used in investing                         
activities:
Capitalized expenditures                 (2,989  )    (1,539  )
Net cash used in investing activities    (2,989  )    (1,539  )
                                                     
Cash flows used in financing                         
activities:
Principal payments on long-term debt                 
and capital leases                       (140  )      (284  )
Purchase of treasury stock                  (15  )         -
Net cash used in financing activities      (155  )      (284  )
                                                     
Net decrease in cash and cash            (13,563 )    (7,438  )
equivalents
                                                     
Cash and cash equivalents, beginning     22,994       12,254
of period
                                                     
Cash and cash equivalents, end of        $9,431       $4,816
period
Notes to Unaudited Condensed Financial Statements

Basis of Presentation

The   information  set  forth  in  these  interim  financial
statements  as  of and for the three months ended  September
30,  1997  and  September 30, 1996  is  unaudited.   In  the
opinion  of  management, the unaudited financial  statements
reflect  all  adjustments necessary to  present  fairly  the
financial   results  of  Sabreliner  Corporation   and   its
subsidiaries  Midcoast  Aviation,  Inc.,  SabreTech,   Inc.,
Dimension Aviation, Inc. and Turbotech Repairs, Inc. for the
periods  indicated.  Results of operations for  the  interim
period   ended  September  30,  1997  are  not   necessarily
indicative of the results of operations for the full  fiscal
year.

Inventories

Components of inventories as of September 30, 1997 and  June
30, 1997 were:

                                  September       June
                                               
Aircraft parts                     $29,938       $28,839
Raw materials                      1,629          1,403
Pre-owned aircraft                 1,322          1,300
   Total                           $32,889       $31,542

Earnings Per Share

In  February, 1997, the Financial Accounting Standards Board
issued  Statement  No. 128 "Earnings Per  Share,"  which  is
required to be adopted on December 31, 1997.  At that  time,
the  Company will be required to change the method currently
used  to compute earnings per share and to restate all prior
periods.    The  new  requirements  for  calculating   basic
earnings  per share are not expected to change the  dilutive
effect  of current stock options.  The adoption of  Standard
128  calculation methods will have no effect to earnings per
share for the periods reported.


Contingencies

Refer  to  PART  II  -  OTHER  INFORMATION,  Item  1.  Legal
Proceedings.

Management's Discussion and Analysis of Financial  Condition
and Results of Operations

Quarter  Ended  September  30, 1997 as Compared  to  Quarter
     Ended September 30, 1996

Net  revenue  increased by $12.2 million or 24%  during  the
first quarter of fiscal 1997, versus the same period of  the
previous   year.   Of  this  increase,  $10.5   million   is
attributable  to  growth in government business,  reflecting
the   performance  on  recently-awarded  contracts  and  the
increased   deliveries  on  existing  contracts.   Corporate
aviation  revenues also grew $5.5 million when  compared  to
the  first quarter of fiscal 1997 due to increased  customer
demand for modifications and the Company's entrance into new
engine  markets.   The  recently-formed Dimension  Aviation,
Inc.  subsidiary  also provided $9.3 million  in  additional
revenues  in its performance on the MD-10/MD-11 subcontracts
with  Boeing.   Other commercial aviation revenues  reported
for the prior year included revenue for facilities no longer
in operation.  This, coupled with reduced volume at Phoenix,
results in a drop in comparative revenue of $13.1 million.

Gross  margin  increased  for the period  by  $4.5  million,
representing a growth of 49% from the first quarter  of  the
prior  year.  Government business provided $3.4  million  of
this  increase,  largely  generated through  recent  awards.
Gross  margin  reported for corporate  aviation  during  the
period  was  $0.9 million higher than the first  quarter  of
fiscal   1997,   reflecting   increased   customer   demand,
particularly  for  interior modifications at  the  Company's
Midcoast  Aviation subsidiary.  Performance on the MD-10/MD-
11  subcontract with Boeing at the recently-formed Dimension
Aviation  subsidiary provided $1.9 million  in  added  gross
margin.   Offsetting  these  increases  was  a  decline   in
remaining  commercial aviation gross margin at the Company's
SabreTech  subsidiary.   The  decline  in  SabreTech   gross
margin,  totaling $1.7 million during the first  quarter  of
fiscal 1997, as compared to the corresponding period of  the
previous  year,  was due to reduced volume  at  Phoenix  and
labor overruns on fixed price contracts.

Selling,  general and administrative expenses for the  three
months  ended September 30, 1997, after excluding facilities
removed  from  operations  and offsets  of  ValuJet  related
expense  (see Item 1. Legal Proceedings) in the prior  year,
increased by $2.2 million, as compared to the first  quarter
of  the  prior year.  The expansion in administrative  staff
associated  with the recent formation of Dimension  Aviation
and  the  effects  of  inflation and  incremental  marketing
expenses account for this increase.

Operating  income for the first quarter of fiscal  1998  was
$3.7   million  higher  than  the  same  period  last  year.
Operating income was increased over the prior year partially
due  to  the  removal  from  operation  of  four  commercial
aviation locations in fiscal 1997.  During the first quarter
of  fiscal 1997, these locations reported an operating  loss
of  $1.6 million, including over $0.8 million in legal  fees
related  to  the  ValuJet incident.  Excluding  the  adverse
effect  of  these  locations on prior year operating  income
results  in an increase to operating income of $2.1  million
or 53% for the first quarter of fiscal 1998, versus the same
period of the previous year.  This same location increase in
earnings  is  largely  attributable to  performance  in  new
government  and  commercial aviation  awards  and  increased
customer demand in corporate aviation, as discussed above.

Outlook

A comparison of backlog by business area as of September 30,
1997 and June 30, 1997 follows:

                               Outstanding Backlog
                              September      June
                             (Dollars in Thousands)
                                           
        Corporate Aviation    $20,319      $17,832
        Government Business    91,448      112,058
        Commercial Aviation    92,330      122,655
                              $204,097     $252,545

Liquidity and Capital Resources

The  Company's cash balance declined by $13.6 million during
the  three months ended September 30, 1997, largely  due  to
investments  made  in  the Company's existing  business  for
working capital and fixed assets.  The facility enhancements
made  at  Dimension Aviation to enable the wide-body airline
passenger-to-freighter conversion and  the  working  capital
investment  in  the  MD-10/MD-11 subcontracts  comprise  the
largest  portion of this investment, totaling $7.8  million.
Facility   enhancements  at  Dimension   will   require   an
additional  $5.0  million  during  fiscal  1998.    Midcoast
Aviation  working capital and facility expenditures  totaled
$4.8  in  the  first quarter of fiscal 1998.  An  additional
$1.7  million will be incurred in fiscal 1998 to complete  a
new hangar.

Continuing  investments are expected in working capital  and
other  capital expenditures to permit expansion  within  the
growing markets of corporate and commercial aviation and  to
enable  the capture of new government contracts. The Company
believes the remaining cash balance and its existing  credit
facility,  combined with cash flows generated by operations,
will be adequate to meet future cash requirements.

The  Company  may  have  provided certain  "forward-looking"
information (as defined in the Private Securities Litigation
Report  Act  of 1995) which may involve risk or uncertainty,
including,  but  not  limited to:  future  sales,  earnings,
margins,  production levels and costs, aircraft  deliveries,
research   and   development,   environmental   and    other
expenditures,  and various business trends.  Actual  results
and  trends  in  the future may differ materially  from  the
projections, depending on a variety of factors.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

ValuJet Related

On May 11, 1996, ValuJet Flight 592 from Miami, carrying 110
passengers  and  crew  crashed into the Florida  Everglades.
Prior to take-off, an employee of SabreTech's Miami facility
returned  to  ValuJet  various company materials,  including
five  boxes containing oxygen generators.  The ValuJet  ramp
agent, after consultation with ValuJet's flight crew, loaded
the  boxes into the cargo bay of Flight 592.  On August  19,
1997,   the  National  Transportation  Safety  Board  (NTSB)
conducted its public meeting and issued an Abstract of Final
Report  on  ValuJet Flight 592 and determined  the  probable
causes of the accident to be (1) the failure of SabreTech to
properly  prepare,  package, identify and  track  unexpended
oxygen  generators  before presenting them  to  ValuJet  for
carriage, (2) the failure of ValuJet to properly oversee its
contract  maintenance  program  to  ensure  compliance  with
maintenance,  maintenance training and  hazardous  materials
requirements  and practices and (3) failure of  the  Federal
Aviation Administration (FAA) to require smoke detection and
fire suspression systems in Class D cargo compartments.  The
NTSB also found that other acts and omissions by ValuJet and
FAA contributed to the accident.

The  FAA  is  also  conducting  an  investigation  into  the
circumstances surrounding the ValuJet crash and  has  sought
information from SabreTech and various of its employees  and
contract  workers  in  connection therewith.   In  addition,
SabreTech  is  one  of several subjects of an  investigation
being conducted by a federal grand jury in conjunction  with
the  United  States  Attorney for the Southern  District  of
Florida.  The Company has cooperated fully throughout  these
investigations and is continuing to do so.

SabreTech,  ValuJet and others have been named as defendants
in  numerous wrongful death actions that have been filed  by
families of victims.  Additional wrongful death actions  are
expected  to  be  filed.   The  Company's  legal  costs   of
defending against these civil actions and any possible claim
settlements are funded by the Company's insurance  policies.
Management believes coverage is adequate to provide for such
legal actions.

SabreTech has filed a Complaint for Declaratory Judgment and
Other Relief against ValuJet in the U.S. District Court  for
the  Southern District of Florida.  Among other things, that
suit seeks indemnification for damages incurred by SabreTech
in  connection  with  the accident.  ValuJet  has  filed  an
Answer  and  Conditional Counterclaim in  the  case  seeking
various damages.  The Company's legal costs associated  with
the  Declaratory Judgment and counterclaim are funded by the
Company's insurance policies.  Management believes that  the
Company   will  be  able  to  successfully  defend   against
ValuJet's counterclaim.

Costs   associated  with  this  accident,  such   as   media
relations, incremental professional services, legal fees and
other  costs related to the various investigations and other
lawsuits,  of approximately $6.4 million have been  incurred
since  May, 1996. The ultimate outcome of the legal  actions
related  to the ValuJet Flight 592 crash and the  length  of
time  necessary to resolve all the outstanding issues cannot
be  determined  at  this time.  The Company  does  not  know
whether  the  continuing effects of the  investigations  and
related lawsuits will have a material adverse effect on  the
results of operations or financial condition of the Company.

Environmental

The Company has been subject to government inquiry regarding
alleged  environmental wrongdoing that may have occurred  at
the  Perryville  facility.  Several requests  for  documents
concerning  this  matter have been received  since  January,
1994,  most recently July, 1997.  All requests for documents
have been complied with or are in the process of resolution.
In  addition,  various  current and  former  employees  have
received subpoenas or notice letters identifying each  as  a
witness,  subject or target.  The Company  believes  it  has
meritorious defenses to allegations of wrongdoing,  if  any,
that may result from the investigation.

Other

In  addition to the litigation discussed above, the  Company
is  subject to other legal proceedings and claims arising in
the ordinary course of its business.  Although there can  be
no  assurance  as to the outcome of litigation,  it  is  the
opinion  of  management  (based upon  the  advice  of  legal
counsel) that all such actions or proceedings are covered by
insurance or will be resolved without material effect on the
Company's financial position or results of operations.

Item 6.  Exhibits and Reports on Form 8-K

(a)Exhibits Filed

   Exhibit 27 - Financial Data Schedule.

(b)Reports on Form 8-K

   No  reports on Form 8-K were filed by the Company  during
   the quarter ended September 30, 1997.

                              
                              
                         SIGNATURES
                              
                              
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.


                         SABRELINER CORPORATION



Date:  November 13, 1997 /s/  F. Holmes Lamoreux
                         F. Holmes Lamoreux
                         Chairman of the Board and
                         Chief Executive Officer



Date:  November 13, 1997 /s/ Rodney E. Olson
                         Rodney E. Olson
                         Senior Vice President, Finance  and
                         Corporate  Development  and   Chief
                         Financial Officer