SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549


                                   FORM 10-QSB

(Mark One)
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the quarterly period ended September 30, 2002

[   ]    Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from                 to
                                           ---------------    -----------------

Commission File Number:  33-84336-LA


                                   JetFleet III
                  (Name of small business issuer in its charter)


              California                                 94-3208983
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

  1440 Chapin Avenue, Suite 310
      Burlingame, California                                         94010
(Address of principal executive offices)                           (Zip Code)

Issuer's telephone number, including area code:                  (650) 340-1880

Securities registered pursuant to Section 12(b) of the Act:       None

Securities registered pursuant to Section 12(g) of the Act:       None


Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
     -----      -----


On November 14, 2002 the aggregate market value of the voting and non voting
Common equity held by non-affiliates (computed by reference to the price at
which the common equity was sold) was $0.


As of November 14, 2002 the Issuer has 815,200 Shares of Common Stock and
195,465 Shares of Series A Preferred Stock outstanding.


Transitional Small Business Disclosure Format (check one):  Yes      No  X
                                                               -----   -----



<page>


                                                 JETFLEET III
                                                 Balance Sheet
                                              September 30, 2002
                                                   Unaudited

                                                    ASSETS
<table>
<S>  <C>                                                                                <C>
Current assets:
     Cash                                                                                    $   1,833,090
     Deposits                                                                                    2,176,850
     Accounts receivable                                                                           155,390
                                                                                              ------------
Total current assets                                                                             4,165,330

Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $2,650,490                                              10,972,590
Debt issue costs, net of accumulated
     amortization of $1,413,780                                                                    247,670
Deferred taxes                                                                                     232,010
Prepaid expenses                                                                                     4,990
                                                                                              ------------

Total assets                                                                                 $  15,622,590
                                                                                              ============
                                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                                        $       8,940
     Interest payable                                                                              152,120
     Prepaid rents                                                                                  89,250
     Security deposits                                                                             328,480
     Maintenance deposits                                                                        1,924,980
                                                                                              ------------
Total current liabilities                                                                        2,503,770

Medium-term secured bonds                                                                       11,076,350
                                                                                              ------------

Total liabilities                                                                               13,580,120
                                                                                              ------------

Preferred stock, no par value,
     300,000 shares authorized, 195,465
     issued and outstanding                                                                      1,661,450
Common stock, no par value,
     1,000,000 shares authorized, 815,200
     issued and outstanding                                                                        815,200
Accumulated deficit                                                                              (434,180)
                                                                                              ------------
Total shareholders' equity                                                                       2,042,470
                                                                                              ------------

Total liabilities and shareholders' equity                                                   $  15,622,590
                                                                                              ============

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




<PAGE>


                                                     JETFLEET III
                                               Statements of Operations
<TABLE>
<S>                                        <C>                                    <C>
                                           For the Nine Months Ended              For the Three Months Ended
                                                 September 30,                           September 30,
<CAPTION>

<S>                                           <C>             <C>                    <C>               <C>
                                              2002            2001                   2002              2001
                                              ----            ----                   ----              ----
                                                    Unaudited                               Unaudited
Revenues:

     Rent income                        $   1,679,270     $   1,489,690         $     565,660    $     452,070
     Gain on sale of aircraft                       -           494,450                     -          147,750
     Other income                              41,140           153,940                18,010           49,000
                                        -------------     -------------         -------------    -------------
                                            1,720,410         2,138,080               583,670          648,820
                                        -------------     -------------         -------------    -------------

Expenses:

     Depreciation                             523,130           402,080               174,380          117,900
     Amortization                             171,470           171,470                57,160           57,160
     Interest                                 684,520           684,520               228,170          228,170
     Maintenance                                8,780           288,530                 6,980           43,660
     Professional fees and
        general and administrative             37,690            29,090                11,480            9,490
     Management fees                          146,600           146,600                48,860           48,860
                                        -------------     -------------         -------------    -------------
                                            1,572,190         1,722,290               527,030          505,240
                                        -------------     -------------         -------------    -------------
Income before taxes                           148,220           415,790                56,640          143,580

Tax provision                                  56,900           149,800                19,880           51,770
                                        -------------     -------------         -------------    -------------
Net income                              $      91,320     $     265,990         $      36,760    $      91,810
                                        =============     =============         =============    =============
Weighted average common
     shares outstanding                       815,200           815,200               815,200          815,200
                                        =============     =============         =============    =============
Basic income per common share           $        0.11     $        0.33         $        0.05    $        0.11
                                        =============     =============         =============    =============
</table>
The accompanying notes are an integral part of these statements.





<PAGE>



                                                        JETFLEET III
                                                 Statements of Cash Flows
<table>
                                                                 For the Nine Months Ended September 30,
<CAPTION>
                                                                       2002                  2001
                                                                       ----                  ----
                                                                                Unaudited
<S>                                                               <C>                   <C>
Net cash provided by operating activities                         $      590,640        $     348,230
                                                                  --------------        -------------
Investing activity -
     Proceeds from sale of aircraft and aircraft engines                 197,000            1,386,810
                                                                  --------------        -------------
Net cash provided by investing activities                                197,000            1,386,810
                                                                  --------------        -------------

Net increase in cash                                                     787,640            1,735,040

Cash, beginning of period                                              1,045,450            2,788,090
                                                                  --------------        -------------

Cash, end of period                                               $    1,833,090        $   4,523,130
                                                                  ==============        =============


Supplemental disclosures of cash flow information:
Cash paid during the period for:                                       2002                  2001
                                                                       ----                  ----
     Interest (net of amount capitalized)                         $      684,520        $     684,520
     Income taxes                                                          4,430                  500

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



<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies

         Basis of Presentation

      JetFleet III (the "Company") was incorporated in the state of California
in August 1994 ("Inception"). The Company was formed solely for the purpose of
acquiring Income Producing Assets. The Company offered up to $20,000,000 in
$1,000 Series A Units (the "Offering") consisting of $850 of bonds maturing on
November 1, 2003 (the "Bonds") and $150 of preferred stock (the "Preferred
Stock") pursuant to a prospectus dated September 27, 1995 (the "Prospectus").

     All of the Company's outstanding common stock is owned by JetFleet Holding
Corp. ("JHC"), a California corporation formed in January 1994. In May 1998,
JetFleet Management Corp., the sole shareholder of the Company was renamed
JetFleet Holding Corp. The rights and obligations under the management agreement
between the Company and JHC were assigned by JHC to its newly-created
wholly-owned subsidiary named "JetFleet Management Corp." ("JMC"). JMC also
manages AeroCentury Corp., a Delaware corporation, and AeroCentury IV, Inc., a
California corporation, which are affiliates of JHC and which have objectives
similar to the Company's. Neal D. Crispin, the President of the Company, holds
the same position with JHC and JMC and owns a significant amount of the common
stock of JHC.

         Cash and Cash Equivalents/Deposits

     The Company considers highly liquid investments readily convertible into
known amounts of cash, with original maturities of 90 days or less, as cash
equivalents. Deposits represent cash balances held related to maintenance
reserves and security deposits and generally are subject to withdrawal
restrictions. As of September 30, 2002, the Company maintained $2,874,400 of its
cash balances in two money market funds held by regional brokerage firms, which
are not federally insured.

         Aircraft and Aircraft Engines Under Operating Leases

     The Company's interests in aircraft are recorded at cost, which includes
acquisition costs (see Note 2). Depreciation is computed using the straight-line
method over each aircraft's estimated economic life to its estimated residual
value.

         Impairment of Long-lived Assets

     In accordance with Statement of Financial Accounting Standards ("SFAS") No.
144, "Accounting for the Impairment or Disposal of Long-lived Assets", assets
are reviewed for impairment whenever events or changes in circumstances indicate
that the book value of the asset may not be recoverable. Periodically, the
Company reviews its long-lived assets for impairment based on estimated future
nondiscounted cash flows attributable to the assets. In the event such cash
flows are not expected to be sufficient to recover the recorded value of the
assets, the assets are written down to their estimated realizable value.

         Organization and Offering Costs

     Pursuant to the terms of the Prospectus, the Company paid an Organization
and Offering Expense Reimbursement to JHC in cash in an amount up to 2.0% of
Aggregate Gross Offering Proceeds for reimbursement of certain costs incurred in
connection with the organization of the Company and the Offering (the
"Reimbursement").
<PAGE>







                                  JETFLEET III
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies (continued)

         Organization and Offering Costs (continued)

     JHC contributed $450,000 of the total it paid for organization and offering
expenses as a common stock investment in the Company (the "Initial
Contribution"). The Company issued 450,000 shares of common stock to JHC in
return for the Initial Contribution. To the extent that JHC incurred expenses in
excess of the 2.0% cash limit, such excess expenses were repaid to JHC in the
form of Common Stock issued by the Company at a price of $1.00 per share (the
"Excess Stock"). The amount of Excess Stock that the Company issued was limited
according to the amount of Aggregate Gross Offering Proceeds raised by the
Company.

     The Company capitalized the portions of both the Reimbursement paid and the
Initial Contribution related to the Bonds (85%) and amortizes such costs over
the life of the Bonds (approximately eight years). The remainder of any of the
Initial Contribution and Reimbursement is deducted from shareholders' equity.

         Assets Subject to Lien

     The Company's obligations under the Bonds are secured by a security
interest in all of the Company's right, title and interest in the Income
Producing Assets acquired by the Company.

         Income Taxes

     The Company follows the liability method of accounting for income taxes as
required by the provisions of Statement of Financial Accounting Standards No.
109 - Accounting for Income Taxes.

         Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

     The most significant estimates with regards to these financial statements
are the residual values of the aircraft, the useful lives of the aircraft, and
the estimated amount and timing of cash flow associated with each aircraft that
are used to evaluate impairment, if any.

         Recent Accounting Pronouncements

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
144,  "Accounting  for the  Impairment or Disposal of Long-lived  Assets," which
supercedes SFAS No. 121, "Accounting for the Impairment of Long-lived Assets and
Long-lived  Assets to Be Disposed  of." SFAS No. 144 is effective  for financial
statements  issued for fiscal years  beginning  after  December  15,  2001,  and
interim  periods within those fiscal years.  The Company adopted SFAS No. 144 on
January 1, 2002. Because SFAS No. 144 retains the fundamental provisions of SFAS
No. 121 for (a)  recognition  and  measurement  of the  impairment of long-lived
assets  to be held and used  and (b)  measurement  of  long-lived  assets  to be
disposed of by sale, the adoption of SFAS No. 144 has not had a material  effect
on the Company's results of operations or financial position.





<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

2.       Aircraft and Aircraft Engines Under Operating Leases

         Aircraft and Aircraft Engines

     The Company owns a deHavilland DHC-8-100, serial number 13 ("S/N 13"), a
deHavilland DHC-8-102, serial number 106 ("S/N 106"), three deHavilland
DHC-6-300 aircraft ("S/Ns 640, 751 and 696") and a Saab 340A, serial number 24
("S/N 24"). During March 2002, the Company sold its Pratt & Whitney JT8D-9A
aircraft engine, serial number 674267 ("S/N 674267"). The Company did not
acquire any assets during the first nine months of 2002 because, in accordance
with the Trust Indenture, the Company's excess cash flow is being held for
deposit to a sinking fund account.

     Since June 2001, S/N 13 has been on lease with the same Australian carrier
under a series of short-term lease extensions through October 2002. The aircraft
was returned to the Company in November 2002 and the Company is seeking re-lease
or sale opportunities.

     S/N 106 is subject to a lease, expiring in November 2004, with a regional
carrier in the Caribbean.

     S/N 751 is leased to a regional carrier in the Maldives for a term expiring
in October 2004. During March 2002, the Company agreed to the terms for the
lease of S/N 640 to the same lessee, expiring in August 2005. The Company
delivered the aircraft to the lessee during August 2002.

     S/N 696 is leased to a regional carrier in the United Kingdom for a term
expiring in April 2003.

     S/N 24 which was subject to a lease expiring in October 2002, with a
regional carrier in North America was re-delivered to the Company in November
2002 and the Company is currently seeking re-lease or sale opportunities for the
aircraft.

     During March 2002, the Company sold S/N 674267, which had been written down
to the net sales price during 2001.

     As of September 30, 2002, minimum future lease rent payments receivable
under noncancelable leases were as follows:

         Year                          Amount

         2002                       $     693,750
         2003                             975,000
         2004                             730,000
                                    -------------
                                    $   2,398,750
                                    =============

<PAGE>





                                  JETFLEET III
                          Notes to Financial Statements

3.       Medium-Term Secured Bonds

     The Company raised $13,031,000 through the Offering from November 1995 to
June 1997. Each $1,000 Unit subscribed in the offering included an $850
medium-term secured bond maturing on November 1, 2003. The Bonds bore interest
at an annual rate of 12.94% through October 31, 1998 and, thereafter, a variable
rate, adjusted annually on November 1, equal to the one-year United States
Treasury bill rate plus 2%, but not less than 8.24%. Based on the one-year
Treasury Bill rate at the measurement dates, the Bonds have borne interest at
the rate of 8.24% per annum for the periods November 1, 1998 through October 31,
2001. The rate will remain at 8.24% through October 31, 2003. The carrying
amount of the Bonds approximates fair value.

     The revenue generated from the Income Producing Assets is used to fund
interest payments on the Bonds and, since November 2001, deposits to a sinking
fund established to facilitate repayment of principal on the Bonds on their
maturity (or such earlier time if the Company decides to make prepayments on the
principal of the Bonds). As of September 30, 2002, the Company had approximately
$1,833,000 available for deposit to the sinking fund, interest payments on the
Notes and operational expenses.

4.       Income Taxes

         The items comprising income tax expense are as follows:
<table>
<S>                                                                             <c>              <c>

                                                                                          2002             2001
                                                                                          ----             ----
         Current tax provision
              Federal                                                           $           -    $            -
              State                                                                     4,850             2,040
                                                                                -------------    --------------
              Current provision                                                         4,850             2,040
                                                                                -------------    --------------

         Deferred tax provision
              Federal                                                                  49,380           139,010
              State                                                                     2,670             8,760
                                                                                -------------    --------------
              Deferred tax provision                                                   52,050           147,770
                                                                                -------------    --------------

         Total provision for income taxes                                       $      56,900    $      149,810
                                                                                =============    ==============

     The total provision for income taxes differs from the amount which would be
provided by applying the statutory federal income tax rate to pretax earnings as
illustrated below:


                                                                                      2002             2001
                                                                                      ----             ----
         Income tax expense at statutory federal income tax rate                $      50,390    $      141,370
         State taxes net of federal benefit                                               890             5,760
         Tax rate differences                                                           5,620             2,680
                                                                                -------------    --------------
         Total provision for income taxes                                       $      56,900    $      149,810
                                                                                =============    ==============
</table>
<Page>





                                  JETFLEET III
                          Notes to Financial Statements

4.       Income Taxes (continued)

     Temporary differences and carryforwards which gave rise to a significant
portion of deferred tax assets and liabilities as of September 30, 2002 are as
follows:

         Deferred tax assets:
              Net operating loss                             $     111,450
              Maintenance deposits                                 666,000
              Prepaid rent and other                                31,150
                                                             -------------
                  Subtotal                                         808,600
                  Valuation allowance                                    -
                                                             -------------
                  Net deferred tax assets                          808,600
         Deferred tax liability -
              Depreciation of aircraft                           (565,120)
              Other                                               (11,470)
                                                             -------------
                                                             $     232,010
                                                             =============

     The Company expects to generate adequate future taxable income to realize
the benefits of the remaining deferred tax assets on the balance sheet. The
Company's net operating losses of $319,780 may be carried forward for fifteen or
twenty years, depending on when they were created, and begin to expire in 2012.

5.       Related Party Transactions

     The Company's Income Producing Asset portfolio is managed and administered
under the terms of a management agreement with JMC. Under this agreement, on the
last day of each calendar quarter, JMC receives a quarterly management fee equal
to 0.375% of the Company's Aggregate Gross Proceeds received through the last
day of such quarter. In the first nine months of 2002 and 2001, the Company
accrued a total of $146,600 and $146,600, respectively, in management fees.

     JMC may receive an acquisition fee for locating assets for the Company and
a remarketing fee in connection with the sale of the Company's assets, provided
that such fees are not more than the customary and usual fees that would be paid
to an unaffiliated party for such a transaction. The total of the Aggregate
Purchase Price plus the acquisition fee cannot exceed the fair market value of
the asset based on appraisal. JMC may also receive reimbursement of Chargeable
Acquisition Expenses incurred in connection with a transaction which are payable
to third parties. Because the Company did not purchase aircraft during the first
nine months of 2002 or 2001, it did not pay any acquisition fees or Chargeable
Acquisitions Expenses to JMC. During the first nine months of 2002 and 2001,
remarketing fees of $0 and $16,580, respectively, were paid to JMC in connection
with the sale of aircraft.

     As discussed in Note 1, the Company reimbursed JHC for certain costs
incurred in connection with the organization of the Company and the Offering.
The Company made no such payments during 2002 or 2001.







<PAGE>



Item 2.           Management's Discussion and Analysis or Plan of Operation.

Forward-Looking Statements

Certain statements contained in this report and, in particular, the discussion
regarding the Company's beliefs, plans, objectives, expectations and intentions
regarding the Company's lack of significant operating expenses in connection
with assets that remain on lease and the sufficiency of the Company's cash flow
to meet interest obligations and fund sinking fund deposits; are forward looking
statements. While the Company believes that such statements are accurate, actual
results may differ due to the depth and length of the current aircraft industry
downturn, unanticipated defaults or terminations by lessees, and future trends
and results that cannot be predicted with certainty. The Company's actual
results could differ materially from those discussed in such forward looking
statements. Factors that could cause or contribute to such differences include
those discussed below in the section entitled "Factors that May Affect Future
Results." The cautionary statements made in this Report should be read as being
applicable to all related forward-looking statements wherever they appear in
this Report.

Critical Accounting Policies

In response to the Securities and Exchange Commission's Release No. 33-8040,
"Cautionary Advice Regarding Disclosure About Critical Accounting Policies", the
Company has identified the most critical accounting policies upon which its
financial status depends. It determined the critical principles by considering
accounting policies that involve the most complex or subjective decisions or
assessments. The Company identified its most critical accounting policies to be
those related to lease rental revenue recognition, depreciation policies and
valuation of aircraft.

Revenue Recognition

Revenue from leasing of aircraft assets is recognized as operating lease revenue
on a straight-line basis over the terms of the applicable lease agreements.

Depreciation Policies

The Company's interests in aircraft and aircraft engines are recorded at cost,
which includes acquisition costs. Depreciation is computed using the
straight-line method over the aircraft's estimated economic life (generally
assumed to be twelve years), to an estimated residual value based on appraisal.

Valuation of Aircraft

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets," assets are
reviewed for impairment whenever events or changes in circumstances indicate
that the book value of the asset may not be recoverable. Periodically, the
Company reviews its long-lived assets for impairment based on estimated future
nondiscounted cash flows attributable to the assets. In the event such cash
flows are not expected to be sufficient to recover the recorded value of the
assets, the assets are written down to their estimated realizable value.

Results of Operations

The Company recorded net income of $91,320 and $265,990 or $0.11 and $0.33 per
share for the nine months ended September 30, 2002 and 2001, respectively. The
Company recorded net income of $36,760 and $91,810 or $0.05 and $0.11 per share
for the three months ended September 30, 2002 and 2001, respectively.

Rent income was approximately $190,000 and $114,000 higher in the nine months
and three months, respectively, ended September 30, 2002 than 2001, due to the
acquisition of S/N 106 during the fourth quarter of 2001, the effect of which
was only partially offset by the disposition of S/N 3656 during the second
quarter of 2001. In early 2002, the Company disposed of one aircraft, which had
been written down to its sales price during 2001, versus two dispositions in the
first nine months of 2001, both of which resulted in gains. Therefore, gain on
sale of aircraft was approximately $494,000 and $148,000 lower in the nine month
and three month periods, respectively, of 2002 versus 2001. Other income was
<page>

lower in the nine month and three month periods of 2002 by approximately
$113,000 and $31,000, respectively, due to lower cash balances and lower
prevailing interest rates.

Depreciation increased approximately $121,000 and $56,000 during the nine month
and three month periods, respectively, of 2002 due to the acquisition of S/N 106
during the fourth quarter of 2001, the effect of which was only partially offset
by the asset dispositions noted above. Maintenance expense was approximately
$280,000 and $37,000 lower in the nine month and three month periods of 2002
than in 2001, respectively, primarily because of the purchase of a replacement
engine for S/N 3656 in January 2001. The replacement was necessary because of
hours flown by the previous lessee, which filed for reorganization and returned
the aircraft during late 2000. Rather than overhaul the original engine, the
Company determined that it was more cost-effective to purchase a replacement,
which purchase was partially funded by maintenance reserves collected from the
new lessee.

Capital Resources and Liquidity

Since Inception, the Company's funds have come primarily in the form of an
initial contribution from JHC, proceeds from the Offering and rental income from
the Income Producing Assets purchased using those proceeds. The Company's
liquidity varies, increasing to the extent cash flows from operations exceed
expenses, and decreasing to the extent expenses, including interest payments to
the Unitholders, exceed cash flows from leases.

The Company's primary use of its operating cash flow is interest payments to its
Unitholders. Excess cash flow, after payment of interest and operating expenses,
has been held for investment in additional Income Producing Assets. Since the
Company has acquired Income Producing Assets which are subject to triple net
leases (the lessee pays operating and maintenance expenses, insurance and
taxes), the Company has not and does not anticipate that it will incur
significant operating expenses in connection with ownership of its Income
Producing Assets while they remain on lease.

The Company currently has available adequate reserves to meet its immediate cash
requirements. The leases for the Company's aircraft expire at varying times
through November 2004. The revenue generated from the Income Producing Assets is
used to fund interest payments on the Bonds and deposits to a sinking fund
established to facilitate repayment of principal of the Bonds on their maturity
(or such earlier time if the Company decides to make prepayments on the
principal of the Bonds).

As discussed in Item 1, the interest rate on the Bonds was 12.94% through
October 31, 1998 and has been a variable rate thereafter, calculated annually on
November 1. The variable rate is equal to the higher of (i) 2% plus the annual
yield rate on one-year U.S. Treasury Bills on the last business day of October
of that year or (ii) 8.24%. Based on the one-year Treasury Bill rate at the
measurement dates, the Bonds have borne interest at the rate of 8.24% per annum
for the periods November 1, 1998 through October 31, 2001. The Company has
determined that the rate will remain at 8.24% through October 31, 2003.

The Company's increase in cash flow from operations was due primarily to higher
net income, excluding the gain on sale of aircraft, during 2002 versus 2001 and
by the effect of the change in maintenance deposits from year to year. The
effect of these changes was partially offset by the effect of the change in
deposits, accounts receivable, and accounts payable.

Specifically, the Company's cash flow from operations for the nine months ended
September 30, 2002 consisted of net income of $91,320 and adjustments consisting
primarily of depreciation and amortization of $523,130 and $171,470,
respectively, increases in cash classified as deposits, accounts receivable,
other assets, maintenance deposits, and security deposits of $631,470, $56,820,
$1,450, $1,924,970 and $328,480, respectively, and decreases in deferred taxes,
accounts payable, and prepaid rent of $232,010, $8,940 and $89,250,
respectively.

Specifically, the Company's cash flow from operations for the nine months ended
September 30, 2001 consisted of net income of $265,990 and adjustments
consisting primarily of depreciation, amortization and gain on sale of aircraft
of $402,080, $171,470 and $494,450, respectively, an increase in other assets of
$3,680, and decreases in cash classified as deposits, accounts receivable,
accounts payable and maintenance deposits of $5,310, $112,630, $51,360 and
$74,910, respectively.

<page>
Cash flow provided by investing activities was $1,189,810 lower in the nine
months ended September 30, 2002 versus the prior year because, although the
Company sold an aircraft during each year, the Company also received sales and
insurance proceeds associated with the disposition of a second aircraft during
the second and third quarters of 2001. There were no cash flows from financing
activities during 2002 or 2001 because the Offering terminated during June 1997.

Outlook

As discussed in "Capital Resources and Liquidity", the revenue generated from
the Income Producing Assets is used to fund interest payments on the Bonds and,
since November 2001, deposits to a sinking fund established to facilitate
repayment of principal on the Bonds on their maturity (or such earlier time if
the Company decides to make prepayments on the principal of the Bonds). As of
September 30, 2002, the Company had approximately $1,833,000 available for
deposit to the sinking fund, interest payments on the Notes and operational
expenses. The Company believes it will continue to have sufficient cash flow to
meet its interest obligations and operational expenses and make deposits into
the sinking fund.

The Company's ability to repay the principal due under the Bonds at maturity on
November 1, 2003 is dependent upon two factors. First, the Company must re-lease
or sell its two aircraft which are currently off lease in order to permit
significant contributions to the sinking fund. The Company must also have no
unexpected expenses as a result of lessee defaults or early terminations.
Second, but a more significant factor, is the amount of proceeds available from
the ultimate sale or refinance of the Company's aircraft portfolio.

The aircraft industry is currently in the midst of a downturn due to the global
economic situation exacerbated by the events of September 11, 2001. The downturn
increases the chances of a lessee default or early terminations of leases. A
lessee may experience less traffic and realize less revenue from operations, and
may be forced to return excess leased aircraft, or in the worst case, may be
driven out of business. The downturn also may make it more difficult for the
Company to re-lease assets to existing lessees or find replacement lessees upon
expiration of the current leases.

More importantly, the downturn has reduced demand for aircraft assets, with an
attendant decrease in aircraft valuations. Depressed valuations, if still
present at the time the Company begins disposition of its assets, may result in
less proceeds (either through sale or refinance) to the Company than it had
previously anticipated.

It is unclear how long it will take for the industry to recover. Because the
time period until maturity of the Bonds is less than two years from now, the
speed of the recovery of the industry has great importance as a factor in the
Company's ability to fully repay the Bond principal upon maturity.

Factors that May Affect Future Results

Recovery of the Air Travel Industry. As discussed in the "Outlook" section
above, the Company's ability to repay the Bonds at their maturity date will
depend upon its ability to refinance the debt obligation or sell its aircraft at
a price sufficient to retire the outstanding Bond principal. Since the maturity
of the Bonds is less than two years from now, and the industry is currently on
the downside of a business cycle, the speed of recovery of the industry will be
an important factor in the Company's ability to repay the Bonds. First and
foremost, a weak travel industry results in greater ownership risk because of
lower demand for aircraft and because of lower valuations for aircraft assets.
See "Ownership Risks," below. In addition, the weakness in the air travel
industry may also make lease extensions and re-leases more difficult and also
results in lower lease rental rates. See "Leasing Risks, " below. Significant
off-lease periods for the Company's aircraft could result in lower rental
revenue received by the Company, and that could affect its ability to repay
interest, and eventually, the full principal indebtedness under the Bonds.

Thus, the failure of the industry to move out of its current down cycle before
the Bond maturity date, or any further weakening of the air travel industry in
the short term, could have a negative impact on the Company's ability to repay
the Bonds at their maturity date. Since the holders of preferred stock are not
entitled to any redemption or dividend payments until the Bonds are paid in
full, the Company's ability to repay the Bonds directly determines whether the
holders of Preferred Stock will receive any amounts with respect to the
Preferred Stock.
<page>
Ownership Risks. All of the Company's portfolio is leased under operating
leases, where the terms of the leases are less than the entire anticipated life
of the asset. As the Bond maturity date is less than two years from now, factors
that could affect the short-to-medium term value of the aircraft have become
increasingly important to the ability of the Company to repay the Bond
indebtedness. As discussed above, industry conditions will be an important
determining factor in the valuation of the aircraft and potential proceeds
realizable from their sale at Bond maturity. In addition, the condition of the
aircraft assets at the time of maturity will also have an effect on their value.
Therefore, continued lessee compliance with maintenance obligations and with
return conditions if an aircraft is returned (particularly with respect to those
aircraft whose leases expire prior to the maturity date of the Bonds), will be a
significant factor in what proceeds could be realized from the aircraft assets
at the maturity date of the Bonds (either through sale or refinance). While the
leases require lessees to be responsible for maintenance and return conditions,
a lessee default in those obligations could result in a reduced value of the
subject aircraft or an expenditure by the Company of funds to optimize the value
of the aircraft. Finally, those aircraft with leases that expire in the coming
months will need to be re-leased, and the lease rates obtained for the aircraft
may affect aircraft values, if the aircraft is sold subject to the lease. If the
leases are negotiated during this period of industry weakness, the lease rates
are likely to be lower than they otherwise would be, and this may adversely
affect the sale or refinance proceeds obtainable with respect to the aircraft at
the maturity date of the Bonds.

Leasing Risks. The Company's successful negotiation of lease extensions,
re-leases and sales may be critical to its ability to repay the Bonds,
particularly as the maturity date nears, and will involve a number of
substantial risks. Demand for lease or purchase of the assets depends on the
economic condition of the airline industry which is in turn highly sensitive to
general economic conditions. Ability to remarket equipment at acceptable rates
may depend on the demand and market values at the time of remarketing. The
market for used aircraft is cyclical, and generally, but not always, reflects
economic conditions and the strength of the travel and transportation industry.
The demand for and value of many types of older aircraft in the recent past has
been depressed by such factors as airline financial difficulties, increased fuel
costs, the number of new aircraft on order and the number of older aircraft
coming off lease. The Company's concentration in a limited number of airframe
and aircraft engine types (generally, turboprop equipment) subjects the Company
to economic risks if those airframe or engine types should decline in value. The
recent introduction of "regional jets" to serve on short routes previously
thought to be economical only for turboprop aircraft operation could decrease
the demand for turboprop aircraft, while at the same time increasing the supply
of used turboprop aircraft. This could result in lower lease rates and values
for the Company's turboprop aircraft.

Risks Related to Regional Air Carriers. Because the Company's leases are all
with regional air carriers, it will be subject to certain risks. First, lessees
in the regional air carrier market include a number of companies that are
start-up, low capital, low margin operations. Often, the success of such
carriers is dependent upon arrangements with major trunk carriers, which may be
subject to termination or cancellation by such major carrier. This market
segment is also characterized by low entry costs, and thus, there is strong
competition in this industry segment from start-ups as well as major airlines.
Thus, leasing transactions with these types of lessees result in a generally
higher lease rate on aircraft, but may entail higher risk of default or lessee
bankruptcy.

General Economic Conditions. The market for used aircraft has been cyclical, and
usually reflects economic conditions and the strength of the travel and
transportation industry. At any time, the market for used aircraft may be
adversely affected by such factors as airline financial difficulties, higher
fuel costs, and improved availability and economics of new replacement aircraft.

An adverse change in the global air travel industry, however, could result in
reduced carrier revenue and excess capacity and increase the risk of failure of
some weaker regional air carriers.

Reliance on JMC. All management of the Company is performed by JMC pursuant to a
management agreement between JMC and the Company. The Board of Directors does,
however, have ultimate control and supervisory responsibility over all aspects
of the Company and does owe fiduciary duties to the Company and its
stockholders. In addition, while JMC may not owe any fiduciary duties to the
Company by virtue of the management agreement, the officers of the Company are
also officers or employees of JMC, and in that capacity owe fiduciary duties to
the Company and the stockholders by virtue of holding such offices. Although the
Company has taken steps to prevent such conflicts, such conflicts of interest
arising from such dual roles may still occur. JMC is also management company for
two other aircraft portfolio owners, AeroCentury Corp. and AeroCentury IV, Inc.
("AeroCentury IV"). AeroCentury IV is in the liquidation or wrap-up phase.
AeroCentury IV recently defaulted on certain obligations to noteholders. The
indenture trustee for AeroCentury IV's noteholders has taken over management of
the remaining two assets.
<PAGE>
Lessee Credit Risk. If a lessee defaults upon its obligations under a lease, the
Company may be limited in its ability to enforce remedies. Most of the Company's
lessees are small domestic and foreign regional passenger airlines, which may be
even more sensitive to airline industry market conditions than the major
airlines. As a result, the Company's inability to collect rent under a
significant lease or to repossess equipment in the event of a default by a
lessee could have a material adverse effect on the Company's revenue. If a
lessee that is a certified U.S. airline is in default under the lease and seeks
protection under Chapter 11 of the United States Bankruptcy Code, under Section
1110 of the Bankruptcy Code, the Company would be automatically prevented from
exercising any remedies for a period of 60 days. By the end of the 60 day
period, the lessee must agree to perform the obligations and cure any defaults,
or the Company would have the right to repossess the equipment. This procedure
under the Bankruptcy Code has been subject to significant litigation, however,
and it is possible that the Company's enforcement rights may still be further
adversely affected by a declaration of bankruptcy by a defaulting lessee. Even
if an aircraft can be repossessed, the Company may be unable to recover damages
from the lessee if the condition of the aircraft when repossessed was worse than
that required by the lease.

International Risks. The Company's portfolio includes leases with foreign air
carriers. Leases with foreign lessees may present somewhat different credit
risks than those with domestic lessees.

Foreign laws, regulations and judicial procedures may be more or less protective
of lessor rights as those which apply in the United States. The Company could
experience collection problems related to the enforcement of its lease
agreements under foreign local laws and the remedies in foreign jurisdictions.
The protections potentially offered by Section 1110 of the Bankruptcy Code would
not apply to non-U.S. carriers, and applicable local law may not offer similar
protections. Certain countries do not have a central registration or recording
system with which to locally establish the Company's interest in equipment and
related leases. This could add difficulty in recovering an aircraft in the event
that a foreign lessee defaults.

Leases with foreign lessees are subject to risks related to the economy of the
country or region in which such lessee is located even if the U.S. economy is
strong. On the other hand, a foreign economy may remain strong even though the
domestic U.S. economy does not. A foreign economic downturn may occur and impact
a foreign lessee's ability to make lease payments, even though the U.S. and
other economies remain stable. Furthermore, foreign lessees are subject to risks
related to currency conversion fluctuations. Although the Company's current
leases are all payable in U.S. dollars, in the future, the Company may agree to
leases that permit payment in foreign currency, which would subject such lease
revenue to monetary risk due to currency fluctuations. Even with
dollar-denominated lease payment provisions, the Company could still be affected
by a devaluation of the lessee's local currency which would make it more
difficult for a lessee to meet its dollar-denominated lease payments, increasing
the risk of default of that lessee, particularly if that carrier's revenue is
primarily derived in the local currency.

Competition. The Company has many competitors in the aircraft leasing industry,
including leasing companies, banks and other financial institutions and aircraft
leasing partnerships. The market is highly competitive. Most of the Company's
competitors have substantially greater financial and other resources than the
Company.

Casualties, Insurance Coverage. The Company, as owner of transportation
equipment, may be named in a suit claiming damages for injuries or damage to
property caused by its assets. As a triple net lessor, the Company is generally
protected against such claims, since the lessee would be responsible for, insure
against and indemnify the Company for such claims. Further, some protection may
be provided by the United States Aviation Act with respect to its aircraft
assets. It is, however, not clear to what extent such statutory protection would
be available to the Company and such act may not apply to aircraft operated in
foreign countries. Also, although the Company may require a lessee to insure
against a risk, there may be certain cases where the loss is not entirely
covered by the lessee or its insurance. Though this is a remote possibility, an
uninsured loss with respect to the equipment or an insured loss for which
insurance proceeds are inadequate would result in a possible loss of invested
capital in and any profits anticipated from such equipment.
<PAGE>
Item 3. Controls and Procedures

An evaluation was performed under the supervision and with the participation of
the Company's management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of the design and operation of the
Company's disclosure controls and procedures within 90 days before the filing
date of this quarterly report. Based on that evaluation, the Company's
management, including the CEO and CFO, concluded that the Company's disclosure
controls and procedures were effective. There have been no significant changes
in the Company's internal controls or in other factors that could significantly
affect internal controls subsequent to their evaluation.

                                     PART II

                                OTHER INFORMATION

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

(a)      Exhibits.

                Exhibit
                Number                               Description

                 99.1     Certification of Neal D. Crispin, President, Chief
                          Financial Officer, pursuant to Section 906 of the
                          Sarbanes-Oxley Act of 2002.

 (b)     Reports on Form 8-K.

None



<PAGE>



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   JETFLEET III


Date:    November 14, 2002         By:    /s/ Neal D. Crispin
                                          -------------------------------
                                          Neal D. Crispin

                                   Title: President, Chief Financial Officer



<PAGE>



                                  CERTIFICATION


I, Neal D. Crispin, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of JetFleet III;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;
4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)   designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;
b)   evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and
c)   presented in this quarterly report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;
5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):
a)   all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and
b)   any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and
6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  November 14, 2002                    /s/ Neal D. Crispin
                                            ----------------------
                                            Neal D. Crispin
                                            President, Chief Financial Officer


<PAGE>
                                                                 Exhibit 99.1
JETFLEET III

                    Certification of Chief Executive Officer
                  pursuant to 18 U.S.C. Section 1350 as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


In connection with this quarterly report of JetFleet III (the "Company") on Form
10-QSB for the period ended September 30, 2002 (the "Report"), I, Neal D.
Crispin, President and Chief Financial Officer of the Company, hereby certify as
of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of
the United States Code, that to the best of my knowledge:

              (1) the Report fully complies with the requirements of Section
              13(a) or 15(d), as applicable, of the Securities Exchange Act of
              1934, and

              (2) the information contained in the Report fairly presents, in
              all material respects, the financial condition and results of
              operations of the Company at the dates and for the periods
              indicated.



Date: November 14, 2002                /s/  Neal D. Crispin
                                            -----------------
                                            Neal D. Crispin
                                            President, Chief Financial Officer