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.
March 31, 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 [ X ] NO [   ]

The number of shares of the Company's common stock outstanding on
April 30, 1997 was 870,934.

PART I - FINANCIAL INFORMATION
Condensed Financial Statements

                   Sabreliner Corporation
                 Consolidated Balance Sheets
                   (Dollars in Thousands)
                              
                                    Unaudited        Audited
                                    March 31,        June 30,
                                       1997            1996
Assets                                                  
Current assets:                                         
  Cash                               $    491        $ 12,254
   Accounts receivable (net                           
     allowances of $880 and $962,      28,843          29,352
     respectively)
   Inventories                         31,204          24,669
   Contracts in process (net of                       
     customer advances and progress                     
     payments of $14,719 and           17,586          11,917
     $10,940, respectively)
   Prepaid and other current           10,777           7,134
     assets
   Total current assets                88,901          85,326
                                                   
Property and equipment, net            49,449          48,311
Goodwill (net of amortization of                    
  $498 and $239, respectively)          4,725           4,984
Deferred financing costs and            8,027           5,997
  other assets
                                                   
Total assets                         $151,102        $144,618
                                                   
Liabilities and stockholders'                      
  equity
Current liabilities:                               
  Accounts payable                   $ 21,803        $ 20,152
  Accrued compensation                  6,062           6,389
  Other accrued liabilities             5,221           4,706
  Royalties payable                       122           2,300
  Accrued interest expense              4,794           1,959
  Other current liabilities             3,762           1,154
     Total current liabilities         41,764          36,660
                                                   
Long-term debt and capital             94,941          93,999
  leases
Revolving credit facility               4,290               -
Other long-term liabilities             3,816           3,823
                                                   
Stockholders' equity:                              
  Common stock and paid-in              2,066           2,066
    capital
  Less:  Treasury stock, at            (1,006)         (1,007)
    cost 
  Retained earnings                       5,231         9,077
     Total stockholders' equity           6,291        10,136
                                                   
Total liabilities and                  $151,102      $144,618
  stockholders' equity


                   Sabreliner Corporation
            Consolidated Statements of Operations
                         (Unaudited)
 (Dollars in Thousands, Share and per Share Data as Stated)


                      Three Months Ended      Nine Months Ended
                      March 31    March 31   March 31   March 31
                        1997        1996      1997         1996
                                                                              
Net revenue           $56,897     $51,631   $159,595    $149,360
Cost of revenue        47,709      42,353    135,113     124,140
  Gross margin          9,188       9,278     24,482      25,220
Selling, general                                         
  and administrative 
  expense               6,929       5,847     23,035      16,638
                                                          
  Operating income      2,259       3,431      1,447       8,582
                              
Interest expense,       3,392       2,908      9,676       8,804
  net                                       
Other income            1,007         (81)     1,004         754
  (expense)                    
 Earnings (loss)                                         
  before income          (126)        442     (7,225)        532
  taxes
                                                         
Income tax                415        (168)     3,379        (202)
  (expense) benefit  
                                                         
 Net Income (loss)   $    289     $   274   $ (3,846)   $    330          
                                              
Earnings per share data
                                                         
 Net earnings                                            
  (loss) per         $   0.33     $  0.31   $  (4.42)   $   0.38
  common share
                                                         
 Dividends paid per                                      
  common share       $   0.00     $  0.00   $   0.00    $  0.00
                                                         
 Average common and                                       
  common equivalent   870,934     872,541    870,901    872,906
  shares

        
                   Sabreliner Corporation
            Consolidated Statements of Cash Flows
                         (Unaudited)
                   (Dollars in Thousands)           
                                                          
                                                           
                                           Nine Months Ended
                                        March 31,     March 31,
                                          1997           1996
Cash flows from operating activities:               
Net income (loss)                       $(3,846)      $   330
                                                    
Adjustments to reconcile net earnings               
  to net cash provided by operating
  activities:
    Depreciation and amortization         5,443        10,370
    Changes in assets and               (12,438        (3,074)
      liabilities
                                                    
Net cash provided by (used in)          (10,841)        7,626
  operating activities
                                                    
Cash flows from investing activities:               
Capitalized expenditures                 (5,897)       (1,938)

Acquisition, net of cash acquired             -        (1,533)
Net cash used in investing activities    (5,897)       (3,471)
                                                    
Cash flows from financing activities:               
Principal payments on long-term debt       (773)         (493)
  and capital leases
Proceeds from revolving credit            4,290             -
  facility
Other long-term borrowings                1,457             -
Treasury stock transactions                   1           (87)
Net cash provided by (used in)            4,975          (580)
  financing activities
                                                    
Net increase (decrease) in cash an      (11,763)        3,575
  cash equivalents
                                                    
Cash and cash equivalents, beginning     12,254         9,879
  of period
                                                    
Cash and cash equivalents, end of       $   491       $13,454
  period
                              
Basis of Presentation:

The   information  set  forth  in  these  interim  financial
statements  as  of and for the three and nine  months  ended
March  31,  1997 and March 31, 1996, is unaudited.   In  the
opinion  of  management, the unaudited financial  statements
reflect  all  adjustments necessary to  present  fairly  the
financial  results for the periods indicated  of  Sabreliner
Corporation  and its subsidiaries Dimension Aviation,  Inc.,
Midcoast  Aviation,  Inc.,  SabreTech,  Inc.  and  Turbotech
Repairs,  Inc.  (now  operating as  part  of  the  Company's
Premier  Turbines division).  Results of operations for  the
interim  period  ended March 31, 1997, are  not  necessarily
indicative of the results of operations for the full  fiscal
year.

Inventories:

Components of inventories as of March 31, 1997 and June  30,
1996 were:

                                    March          June

Aircraft parts                     $28,259       $22,105
Raw materials                        1,195         1,419
Pre-owned aircraft                   1,750         1,145
Total                              $31,204       $24,669

Property and Equipment:

Components  of property and equipment as of March  31,  1997
and June 30, 1996 were:

                                     March         June

Service contract assets (UNFO)*     $98,346      $99,118
Other                                44,445       41,931

                                    142,791      141,049

Less accumulated depreciation       (99,274)     (96,235)
 
                                     43,517       44,814

Construction in progress              5,932        3,497

Total                               $49,449      $48,311

* Represents  training  system including  aircraft,  engines
  and   simulators  dedicated  to  the  Undergraduate  Naval
  Flight Officers (UNFO) logistics support contract.

Contingencies:

See PART II - OTHER INFORMATION, Item 1. Legal Proceedings.



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

Overview

Although net income for the quarter ended March 31, 1997, is
essentially  unchanged from the same period  of  last  year,
recent  developments indicate stronger future results.   The
backlog of firm orders has increased from $107.2 million  as
of  December 31, 1996 to nearly $270 million as of March 31,
1997.  In addition, an agreement in principle was reached on
May  2, 1997, with the U.S. Navy for Sabreliner to sell  the
UNFO training system assets for $42.5 million, pending final
negotiations  of  sale  terms and conditions.   The  Company
believes  the  sale transaction will be completed  no  later
than June 30, 1997.

For  the  quarter ended March 31, 1997, the Company reported
an  operating  profit, before interest  and  taxes  of  $2.3
million, representing a decline from the same period of last
year   of  $1.2  million.   The  decline  in  third  quarter
operating  profit is attributed to reductions in  commercial
aviation  operating  profit totaling $3.8  million  for  the
quarter,  as  compared to the corresponding period  of  last
year.   Commercial aviation profit decreases for the quarter
were primarily due to lower volumes and fixed price overruns
at the Phoenix facility and the initial operating losses and
carrying  cost  of  the idled Orlando  facility.   Partially
offsetting  the  effect  of  commercial  aviation  operating
losses  were increased activity in government and  corporate
aviation, generating $2.6 million of operating earnings.

Operating profits for the nine months ended March 31,  1997,
were  lower than the same period a year ago as a  result  of
costs associated with the ValuJet crash (see PART II - OTHER
INFORMATION,   Item  1.  Legal  Proceedings).    Legal   and
professional  fees  incurred in response  to  the  incident,
coupled  with increased aviation liability insurance  costs,
reduced  operating profit by $5.2 million  for  the  period.
Related to the crash, customer demand at the SabreTech Miami
facility fell reducing operating profit by $2.8 million from
the  same  period  of last year.  As a result,  the  Company
ceased revenue-generating activity at its Miami facility and
sold  or  relocated its operating assets.  In addition,  the
Company   voluntarily   surrendered   its   repair   station
certificate for the start-up Orlando operation.  The Company
is  exploring  alternatives for this site,  with  resolution
expected by December 31, 1997. Initial operating losses  and
carrying  costs  of  the Company's Orlando  facilities  were
approximately  $1.4 million.  Without the effects  of  these
now  idled or closed SabreTech facilities, operating  profit
for  the  nine months ended March 31, 1997, would have  been
$10.8  million, representing a $9.4 million or 26%  increase
over  the  corresponding period of  the  prior  year.   This
increase  is  largely attributed to the increased  corporate
aviation   activity  at  the  Company's  Midcoast   Aviation
subsidiary.


Quarter and Nine Months Ended March 31, 1997 as Compared  to
Quarter and Nine Months Ended March 31, 1996

Revenues  for  the quarter and nine months ended  March  31,
1997,  were 10% and 7% higher than their respective  periods
of  the prior year.  Excluding the revenues provided by  the
Miami  and  Orlando operations from all periods  results  in
same-facility  increases of $13.2 million and $24.1  million
or  30% and 19% for the quarter and nine months ended  March
31,  1997,  respectively, as compared to  the  corresponding
periods  of  the  prior year.  The increases  recognized  in
revenue for these periods reflect the higher volume  on  the
Air  Force  C-20  logistics contract and  the  Navy  T-2/A-4
contract,  more  than  offsetting  the  drop  in  the   UNFO
logistics contract and other government programs.  In total,
government aviation revenues for the third quarter were $5.4
million higher than the same period of last year.  Corporate
aviation revenues for the third quarter are also higher than
the  same  period  last year by $11.2  million  due  to  the
increased  major  modification  activity  at  Midcoast   and
Sabreliner  locations  and additional revenues  provided  by
Turbotech Repairs, Inc. which was acquired in June, 1996.

Gross  margin reported for the quarter ended March 31, 1997,
was  $0.1 million lower than the same period of fiscal 1996.
Without  the gross margin provided by the Miami and  Orlando
facilities  of  $1.5  million,  gross  margins  would   have
increased  by  15% during the quarter, as  compared  to  the
corresponding period of the previous year. Midcoast Aviation
provided  $1.5  million in increased gross margin  from  the
same  period last year largely due to the capture of  larger
major   modification  customers.  Other  existing  corporate
aviation facilities provided $1.4 million in increased gross
margins,  largely through additional engine  business.   The
acquisition of Turbotech Repairs, now operating as  part  of
the Premier Turbines division, also provided $0.4 million in
new gross margins for the quarter.  Offsetting the gains  in
corporate  aviation  were reductions in commercial  aviation
gross margin earned at the Phoenix operations.  Lower demand
and  fixed-price  overruns were the primary  causes  of  the
third  quarter  decline  in Phoenix gross  margins  of  $2.0
million, as compared to the same period last year.

Gross  margins reported for the nine months ended March  31,
1997,  were $0.7 million less than the corresponding  period
of  the  previous year.  After removing the effects  of  the
Miami  and  Orlando  facilities from the  periods,  adjusted
gross  margin  reflects an increase for the nine  months  of
$4.8 million or 19% from the same period of last year.  This
increase  is  largely due to corporate aviation  performance
above prior year levels.  Midcoast Aviation had $2.2 million
more  in gross margins during the last nine months than  for
the  same  period  of  the  previous  year,  reflecting  the
increased   customer   demand   for   major   modifications.
Turbotech  Repairs,  now operating as part  of  the  Premier
Turbines  division,   provided an additional  $1.2  million.
Exclusive  of the Miami and Orlando locations, the remaining
commercial  aviation facilities also reported  $1.3  million
more  gross margins for the nine months ended March 31, 1997
than  recognized for the corresponding period  of  the  past
year.

Selling, general and administrative expenses for the quarter
increased  by  $1.0 million from the third  quarter  of  the
previous year.  Approximately $0.5 million of this  was  due
to increased aviation liability insurance premiums resulting
from  the ValuJet incident; the remainder is largely due  to
the  start-up  of the new Dimension Aviation  subsidiary  at
Goodyear,  Arizona  and the increased  administrative  costs
associated with the acquisition of Turbotech Repairs, Inc.

Selling,  general and administrative expenses for  the  nine
months  ended March 31, 1997, were $6.4 million higher  than
the   same   period  a  year  ago.  Continuing   legal   and
professional  services  relating to the  ValuJet  crash  and
increased  aviation  liability  insurance  represented  $5.2
million  of  this increase (see PART II - OTHER INFORMATION,
Item 1. Legal Proceedings).  Excluding the expenses relating
to the ValuJet incident, selling, general and administrative
expenses would have increased from the previous year by $1.2
million,  reflecting  the  increased  administrative   costs
associated  with the acquisition of Turbotech Repairs,  Inc.
and the pursuit of government contracts.

Interest  expenses  for the quarter and  nine  months  ended
March 31, 1997 were higher than the corresponding periods of
the  prior year, reflecting the Company's use of its working
capital credit facility.

Other  income  for  the  quarter and  nine  months  to  date
represents  the  gain  realized on an  insurance  settlement
received by the Company's Midcoast Aviation subsidiary.  The
proceeds of this settlement are not subject to income taxes,
as is reflected in income tax benefit for the period.

Outlook

A  comparison  of backlog by business area as of  March  31,
1997, and June 30, 1996, follows:

                               Outstanding Backlog
                                March       June
                              (Dollars in Thousands)

       Government Business    $128,420    $ 77,404
       Corporate Aviation       14,233       5,807
       Commercial Aviation     125,414      24,880
                                         
                              $268,067    $108,091

The  increase  in government business backlog  reflects  the
U.S.  Government's exercise of options or award of follow-on
contracts,  including the T-2/A-4, C-20 and  J85  contracts,
providing  over  $47.0  million  in  firm  business  and   a
subcontract  award  with Lockheed-Martin,  providing  nearly
$15.0 million in new business backlog.

Corporate aviation backlog has more than doubled since  June
due to the increased major modifications in work at Midcoast
Aviation, Inc.

The  award  of  the MD-10 and MD-11 conversion  subcontracts
from  McDonnell Douglas on February 14, 1997, has  increased
commercial aviation backlog by nearly $110.0 million.  These
subcontracts  are  for the conversion of  passenger  airline
aircraft to freighter configuration, to be performed by  the
Company's new Dimension Aviation subsidiary headquartered at
Goodyear,  Arizona.   The  current order,  for  27  aircraft
conversions, is scheduled to be complete within four  years.
Options for additional aircraft orders could  exceed  $200.0
million  in estimated revenue, requiring over ten  years  to
complete using existing and planned facilities.

The March 31, 1997, backlog does not reflect the sale of the
UNFO  training  system assets to the U.S.  Navy,  valued  at
$42.5  million.  On May 2, 1997, an agreement  in  principle
was  reached with the Navy, which would provide the  Company
with approximately $37.0 million before June 30, 1997.   The
remaining $5.5 million would be received in the next  fiscal
year upon performance of tasks specified in the agreement.

Liquidity and Capital Resources

During  the nine months ended March 31, 1997, cash used  for
operating  and  investing activities totaled $16.7  million,
derived from cash on hand and the Company's revolving credit
facility.   The  growth in inventories  in  support  of  new
engine product lines and the acquisition and modification of
pre-owned   aircraft  for  resale  required  $6.5   million.
Capital  expenditures, including facility  enhancements  for
the new Goodyear plant, required an additional $5.9 million.
Losses from operations required $3.8 million.  Other working
capital  investments used approximately $0.5 million  during
the period.

Future  cash balances will be increased by the sale  of  the
Company's UNFO training system assets to the U.S. Government
as discussed above.  Approximately $37.0 million is expected
to  be  received  before the end of this fiscal  year.   Net
proceeds  should approximate $35.0 million, after completion
of  all additional services and after implementation of  tax
strategies.

Major   capital   commitments  are  planned   for   facility
enhancements during the next three quarters.  The largest of
these is for improvements of the Goodyear, Arizona facility,
to   fully   perform  the  McDonnell  Douglas  subcontracts,
requiring  a  capital  commitment  of  approximately   $11.0
million.   The  Company  is  also planning  to  invest  $3.2
million  in  another  hangar for Midcoast  at  its  Cahokia,
Illinois  facility  to accommodate the  increased  corporate
aviation demand.  Both of these enhancements will be  funded
with  the  Company's  revolving  credit  facility  and  cash
generated through operations.

Due to the shortfalls in year to date results of operations,
the   Company  was  unable  to  meet  all  of  the  covenant
requirements  called for in the revolving credit  agreement.
The  Company has received a waiver for the March  31,  1997,
measurement   date.   In  addition,  the   Company   is   in
discussions with its lead lender, Star Bank, N.A., to extend
the  revolving credit agreement and modify certain terms  to
accommodate its working capital needs.  The Company  expects
to complete the agreement modification no later than the end
of  the  fiscal  year.   The Company believes  the  modified
agreement  and  operating cash flows will  provide  adequate
capital resources to meet future cash requirements.
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

On May 11, 1996, ValuJet Flight 592 from Miami, carrying 110
passengers  and  crew, crashed into the Florida  Everglades.
Prior  to  take-off, employees of SabreTech's Miami facility
returned  to  ValuJet  various company materials,  including
five  boxes containing oxygen generators. After consultation
with ValuJet's flight crew, these were loaded into the cargo
bay  of Flight 592 by ValuJet employees.  Although the cause
of  the  crash  has  not been officially determined  by  the
National  Transportation  Safety Board  (NTSB),  SabreTech's
actions associated with Flight 592 have been included in the
NTSB  investigation.   The  Federal Aviation  Administration
(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.  Public  hearings
concerning  the crash of Flight 592 were held  in  November,
1996.

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, naming SabreTech, ValuJet and  others.
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.

In  connection with a wrongful death action brought  against
it  in Georgia State Court, Fulton County, on or about April
10, 1997, ValuJet sought leave of the court to file a third-
party complaint against SabreTech.  The proposed third-party
complaint   asserts  claims  for  contribution,   indemnity,
negligence  and breach of contract, with ValuJet seeking  to
recover  all  damages  sustained by it  resulting  from  the
crash.  The court has not yet ruled on ValuJet's motion.  If
ValuJet  is  permitted  to file the complaint,  the  Company
intends   to   assert   defenses  to   these   claims,   and
counterclaims, and will seek to confirm coverage  under  the
Company's insurance policies.

On  its  behalf, SabreTech filed an action on  May  9,  1997
against  ValuJet  in U.S. District Court  for  the  Southern
District of Florida.  SabreTech is seeking a judicial ruling
on  contractual rights and obligations for costs and damages
resulting from the crash.  In particular, SabreTech  asserts
ValuJet is required to indemnify SabreTech for damages 
relating to the crash due to ValuJet's negligence. The  suit
also asserts SabreTech's  lack of obligation for damages
incurred by ValuJet due to ValuJet's negligence and SabreTech's
lack of obligation to provide insurance against ValuJet's
negligent acts. The suit also seeks confirmation SabreTech is
not liable for consequential damages.

The  Company  has recognized its own costs of  approximately
$5.9  million associated with the ValuJet accident, of which
$5.2  million  were  recorded during the nine  months  ended
March  31,  1997.   Included  are  such  expenses  as  media
relations, incremental professional services, legal fees not
covered by insurance, increased insurance premiums and other
costs  related  to  the  various  investigations  and  other
lawsuits.

In  January,  fiscal 1997, the Company sold  certain  assets
associated with the Miami facility and exited its operations
there.  Remaining assets were relocated to other operational
units  within the Company.  Shutdown costs of the  facility,
including provision for continuing ValuJet related  expenses
of $2.5 million, were recognized in December.

The ultimate outcome of legal actions related to the ValuJet
Flight 592 crash and the length of time necessary to resolve
all  outstanding issues cannot be determined at  this  time.
The Company does not know whether the continuing effects  of
the investigations and lawsuits will have a material adverse
effect  upon  the future results of operations or  financial
condition of the Company.

The Company has been subject to government inquiry regarding
an  alleged environmental incident that may have occurred at
the  Perryville  facility  prior  to  the  flooding  of  the
facility in July, 1993.  Supplemental requests for documents
concerning  this  matter were received during  fiscal  1996.
The  Company  has complied with all requests for  documents.
No  other  significant actions or developments have occurred
during fiscal 1997.

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 March 31, 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

                           /s/ F. Holmes Lamoreux
Date: May 15, 1997
                           F. Holmes Lamoreux
                           Chairman of the Board and
                           Chief Executive Officer


                           /s/ Rodney E. Olson

Date: May 15, 1997         Rodney E. Olson
                           Senior Vice President, Finance
                           and Corporate Development and
                           Chief Financial Officer