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, 1996                                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 [   ]


PART I - FINANCIAL INFORMATION
Condensed Financial Statements

                   Sabreliner Corporation
                 Consolidated Balance Sheets
                   (Dollars in Thousands)
                              
                                    Unaudited       Audited
                                  September 30,     June 30,
                                       1996           1996
Assets                                                  
Current assets:                                         
  Cash                               $ 4,816       $ 12,254
  Accounts receivable (net                           
    allowances of $985 and $962,      27,612         29,352
    respectively)
  Inventories                         25,747         24,669
  Contracts in process (net of                       
    customer advances and progress                     
    payments of $15,253 and           14,188         11,917
    $10,940, respectively
  Prepaid and other current            8,020          7,134
    assets
      Total current assets            80,383         85,326
                                                   
Property and equipment, net of        48,550         48,311
  depreciation
Goodwill (net of amortization of                    
  $312 and $239, respectively)         4,911          4,984
Deferred financing costs and           7,031          5,997
  other assets
                                                   
  Total assets                      $140,875       $144,618
                                                   
Liabilities and stockholders'                
  equity
Current liabilities:                               
  Accounts payable                  $ 15,335       $ 20,152
  Accrued compensation                 5,563          6,389
  Other accrued liabilities            4,607          4,706
  Royalties payable                    2,300          2,300
  Accrued interest expense             4,703          1,959
  Other current liabilities              932          1,154
     Total current liabilities        33,440         36,660
                                                   
Long-term debt and capital            93,894         93,999
  leases
Other long-term liabilities            1,997          2,000
Deferred income taxes                  1,823          1,823
                                                   
Stockholders' equity                               
  Common stock                            10             10
  Additional paid-in capital           2,056          2,056
  Less:  Treasury stock, at           (1,007)        (1,007)
         cost                                  
  Retained earnings                    8,662          9,077
     Total stockholders' equity        9,721         10,136
                                                   
  Total liabilities and             $140,875       $144,618
    stockholders' equity


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

                                        Three Months Ended
                                    September 30  September 30,
                                        1996          1995
                                                   
Net revenue                            $50,969      $48,944
Cost of revenue                         41,847       40,042
  Gross margin                           9,122        8,902
Selling, general and administrative      6,746        5,265
  expense
                                                   
  Operating income                       2,376        3,637
                                                   
Interest expense, net                   (3,004)      (2,966)
Other income (expense)                       3           85
  Earnings (loss) before income           (625)         756
    taxes
                                                   
Income tax (expense) benefit               210         (288)
                                                   
  Net income (loss)                    $  (415)     $   468
                                                   
                                                   
                                                   
Earnings per share data                            
                                                   
  Net earnings (loss) per common       $  (0.48)      $0.54
    share
                                                   
  Dividends paid per common share      $   0.00       $0.00
                                                   
  Average common and common             871,153     872,834
    equivalent shares
    
                   Sabreliner Corporation
            Consolidated Statements of Cash flows
                         (Unaudited)
                   (Dollars in Thousands)                            
                              
                                            Three Months Ended
                                        September 30,  September 30,
                                            1996           1995
Cash flows from operating activities:                
Net income (loss)                        $    (415)       $   468
                                                     
Adjustments to reconcile net earnings                
  to net cash provided by operating
  activities:
     Depreciation and amortization           1,796          6,375
     Changes in assets and                  (6,996)         1,480
       liabilities
                                                     
Net cash provided (used) by operating       (5,615)         8,323
  activities
                                                     
Cash flows used in investing                         
  activities:
Capitalized expenditures                    (1,539)         (507)
Net cash used in investing activities       (1,539)         (507)
                                                     
Cash flows used in financing                         
  activities:
Principal payments on long-term debt          (229)          (75)
  and capital leases                              
Purchase of treasury stock                       -           (63)
Net cash used in financing activities         (284)         (153)
                                                     
Net increase (decrease) in cash and         (7,438)        7,663
  cash equivalents
                                                     
Cash and cash equivalents, beginning        12,254         9,879
  of period
                                                     
Cash and cash equivalents, end of          $ 4,816       $17,542
  period

Basis of Presentation:

The information  set  forth  in  these  interim  financial
statements  as  of and for the three months ended  Sepetmber
30, 1996  and  September 30, 1995  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.  and
Turbotech Repairs, Inc. for the periods indicated.   Results
of  operations  for the interim period ended  September  30,
1996  are  not  necessarily indicative  of  the  results  of
operations for the full fiscal year.

Inventories:

Components of inventories as of September 30, 1996 and June
30, 1996 were:

                                   September       June
                                      
Aircraft parts                     $ 23,327     $ 21,105
Raw materials                         1,048        1,419
Pre-owned aircraft                    1,372        1,145
  Total                            $ 25,747     $ 24,669

Property and Equipment:

Components  of  property and equipment as of  September  30,
1996 and June 30, 1996 were:

                                   September        June
                                      
Service contract assets *          $ 99,515       $ 98,118
Other                                42,602         41,931
                                    142,117        141,049
Less accumulated depreciation       (97,656)       (96,235)
                                     44,461         44,814
Construction in progress              4,089          3,497 
                                   $ 48,550       $ 48,311

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


Contingencies:

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,  which,  after
consultation  with ValuJet's flight crew, 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 will be held beginning in
late 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.

SabreTech,  ValuJet  and  others also  have  been  named  as
defendants   in  two  class  action  lawsuits   brought   by
stockholders of ValuJet.  On October 25, 1996, these actions
against SabreTech were dismissed with prejudice.

The  Company  has  incurred expenses  associated  with  this
incident,  such as media relations, incremental professional
services, legal fees and other costs related to the  various
investigations and other lawsuits not covered  by  insurance
of  approximately $1.6 million; of which $0.9  million  were
incurred   during   the  first  quarter  of   fiscal   1997.
Additional  costs  incurred in subsequent  periods  will  be
recognized  as incurred.  Although the ultimate  outcome  of
the  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
believes  the  continuing effects of the investigations  and
related  lawsuits  will not have a material  adverse  effect
upon   the   future  results  of  operations  or   financial
conditions 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.
All requests for documents have been complied with or are in
the  process of resolution and no other significant  actions
or  developments  have  occurred during  the  quarter  ended
September 30, 1996.

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.

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

Overview

Operating  profit  for  the first  quarter  of  fiscal  1997
declined by $1.3 million or 35% from the same period of  the
previous year, due to the continuing effects of the  ValuJet
crash  (see  PART  II  - OTHER INFORMATION,  Item  1.  Legal
Proceedings).  Legal fees, professional services,  increased
insurance  premiums and other costs incurred in relation  to
the   ValuJet   incident  increased  selling,  general   and
administrative  expenses by $1.2 million  during  the  first
quarter  of  1997.  Customer demand at the  Company's  Miami
facility  has  also been adversely affected by  the  ValuJet
crash, resulting in an operating loss for the Miami facility
before incremental operating expenses of $0.8 million during
the  first  quarter of fiscal 1997.  Without the effects  of
the ValuJet crash, operating profit for the first quarter of
1997  would  have been $0.7 million higher  than  the  first
quarter of the prior year, reflecting the Company's strategy
to  replace  the expected decline in profit associated  with
the  Company's  largest  contract, the  Undergraduate  Naval
Flight  Officers (UNFO) contract with earnings  from  recent
acquisitions  in corporate and commercial aviation  and  the
award of new contracts.

Quarter  Ended  September 30, 1996 as  Compared  to  Quarter
Ended September 30, 1995

The  4%  increase  in  net revenue  for  the  quarter  ended
September  30, 1996 versus the corresponding period  of  the
previous  year  represents  the  substitution  of  declining
government  revenues with growth in commercial aviation  and
corporate  aviation areas.  The conversion of the  Company's
largest government contract, the Undergraduate Naval  Flight
Officers  (UNFO) logistics program, from its  base  contract
period  ended  September 30, 1995 to its  three-year  option
period  reduced  quarterly revenues by $7.1 million.   Other
government  revenue  reductions  associated  with  declining
orders  and  completed contracts were  offset  with  revenue
generated by new awards, resulting in a net overall  decline
in  government revenue, of $4.6 million for the three months
ended  September 30, 1996, as compared to the same period  a
year ago.  Offsetting this decline in government revenue was
growth in commercial and corporate aviation revenue totaling
$6.6   million.   This  growth  was  achieved  through   the
increased  activity  generated by  the  expanded  sales  and
marketing efforts of the respective areas.

Gross  margin reported for the first quarter of fiscal  1997
reflected a slight increase over the first quarter  of  last
year,  despite a loss in gross margin reported for the Miami
facility  during the quarter of $0.4 million caused  by  the
continuing effects of the ValuJet crash.  Without this loss,
gross  margin for the three months ended September 30, 1996,
would  have been 7% higher than the same period of the prior
year.

Selling,  general and administrative expenses for the  first
quarter of fiscal 1997 were significantly increased  by  the
legal   fees,  professional  service  costs  and   increased
insurance premiums incurred in relation to the ValuJet crash
(see   PART   II  -  OTHER  INFORMATION,  Item   1.    Legal
Proceedings).  Without these additional costs, totaling $1.2
million for the quarter, selling, general and administrative
expenses  would have increased from the prior year  by  $0.3
million, due to acquisitions completed in the fourth quarter
of fiscal 1996.

Backlog

A comparison of backlog by business area as of September 30,
1996 and June 30, 1996 follows:

                                Outstanding Backlog
                                September      June
                              (Dollars in Thousands)
                                            
        Government Business     $67,592      $77,404
        Corporate Aviation       11,712        5,807
        Commercial Aviation      17,926       24,880
                                            
                                $97,231     $108,091

Not  included in backlog is the possible sale  of  the  UNFO
training  system assets to the U.S. Navy, funded by Congress
for $45 million but not yet ordered.

Outlook

The  Company believes the results of operations in the  next
quarter  will continue to be affected by the losses  of  the
Miami  facility and the legal actions related to the ValuJet
crash.   However,  the Company has entered into  discussions
with  interested  parties concerning the  possible  sale  of
tooling,  equipment and leasehold interests associated  with
its  Miami facility.  Discussions are in preliminary  stages
and no assurance can be made as to the outcome or timing  of
such discussions.

Third  quarter  results are expected  to  rebound  with  the
possible  sale  of  the UNFO assets.   Funding  for  such  a
transaction in the amount of $45 million has been authorized
and  appropriated by Congress and signed  into  law  by  the
President of the United States.  The Company is scheduled to
begin  discussions with the U.S. Navy in  late  November  to
negotiate an agreement which results in the Navy owning  the
UNFO  training  assets.  Although the Company believes  this
transaction will occur during this fiscal year, there can be
no  assurance that this transaction will occur  within  this
timeframe or that it will ever occur.

Liquidity and Capital Resources

The  Company's cash balance declined by $7.4 million  during
the  three months ended September 30, 1996, largely  due  to
investments  made  in  the Company's existing  business  for
working  capital  and fixed assets.  The  expansion  of  the
Company's  capabilities  in  engine  maintenance   and   the
establishment  of  a  new commercial  aviation  facility  at
Orlando, Florida are the primary investments of this period.

Future  cash balances may be increased by the possible  sale
of  the  Company's UNFO training system assets to  the  U.S.
government as discussed above.  If the proposed sale occurs,
the  Company's cash balances will be increased, after taxes,
by approximately $35 million.  Although the Company believes
this  transaction will occur during this fiscal year,  there
can  be no assurance that this transaction will occur within
this timeframe or that it will ever occur.

During  the  second quarter, the Company expects  to  use  a
portion  of its existing credit facility with Star Bank  for
operating  cash  flow  needs.   The  Company  believes   the
remaining balance of its credit facility, combined with  the
cash flows generated by operations, will be adequate 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,  which,  after
consultation  with ValuJet's flight crew, 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 will be held beginning in
late 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.

SabreTech,  ValuJet  and  others also  have  been  named  as
defendants   in  two  class  action  lawsuits   brought   by
stockholders of ValuJet.  On October 25, 1996, these actions
against SabreTech were dismissed with prejudice.

The  Company  has  incurred expenses  associated  with  this
incident,  such as media relations, incremental professional
services, legal fees and other costs related to the  various
investigations and other lawsuits not covered  by  insurance
of  approximately $1.6 million; of which $0.9  million  were
incurred   during   the  first  quarter  of   fiscal   1997.
Additional  costs  incurred in subsequent  periods  will  be
recognized  as incurred.  Although the ultimate  outcome  of
the  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
believes  the  continuing effects of the investigations  and
related  lawsuits  will not have a material  adverse  effect
upon   the   future  results  of  operations  or   financial
conditions 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.
All requests for documents have been complied with or are in
the  process of resolution and no other significant  actions
or  developments  have  occurred during  the  quarter  ended
September 30, 1996.

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, 1996.


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

                            SABRELINER CORPORATION

  
                            /s/  F. Holmes Lamoreux
Date:  November 14, 1996
                            F. Holmes Lamoreux
                            Chairman of the Board and
                            Chief Executive Officer

  
                            /s/  Rodney E. Olson
Date:  November 14, 1996
                            Rodney E. Olson
                            Senior Vice President, Finance  and
                            Corporate  Development and Chief
                            Financial Officer