UNITED STATES
                       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, 2003

[ ] 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
              (Exact 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, 2003 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, 2003 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, 2003
                                    Unaudited

                                     ASSETS

Current assets:
     Cash                                                          $   2,193,930
     Deposits                                                          3,018,090
     Accounts receivable                                                 110,940
                                                                   -------------
Total current assets                                                   5,322,960

Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $498,130                       4,792,430
Debt issue costs, net of accumulated
     amortization of $1,642,400                                           19,050
Deferred rent receivable                                                  11,090
Prepaid expenses                                                          16,660
                                                                   -------------

Total assets                                                       $  10,162,190
                                                                   =============

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
     Accounts payable                                              $      27,950
     Interest payable                                                    152,120
     Prepaid rents                                                       106,280
     Security deposits                                                   369,980
     Maintenance deposits                                              2,730,140
     Medium-term secured bonds                                        11,076,350
                                                                   -------------

Total liabilities                                                     14,462,820
                                                                   -------------

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                                                  (6,777,280)
                                                                   -------------
Total shareholders' deficit                                          (4,300,630)
                                                                   -------------

Total liabilities and shareholders' deficit                        $  10,162,190
                                                                   =============

The accompanying notes are an integral part of these statements.


<PAGE>



                                  JETFLEET III
                            Statements of Operations

<TABLE>
<CAPTION>



                                          For the Nine Months Ended               For the Three Months Ended
                                                 September 30,                           September 30,
                                              2003            2002                   2003              2002
                                              ----            ----                   ----              ----
                                                    Unaudited                               Unaudited
<S>  <C>                                <C>               <C>                   <C>              <C>


Revenues:

     Rent income                        $   1,154,210     $   1,679,270         $     447,240    $     565,660
     Other income                              26,160            41,140                 8,290           18,010
                                        -------------     -------------         -------------    -------------

                                            1,180,370         1,720,410               455,530          583,670
                                        -------------     -------------         -------------    -------------


Expenses:

     Depreciation                             524,470           523,130               175,720          174,380
     Amortization                             171,470           171,470                57,160           57,160
     Provision for impairment
        in value of aircraft                5,505,000                 -             5,505,000                -
     Interest                                 684,520           684,520               228,170          228,170
     Maintenance                               75,240             8,780                25,230            6,980
     Insurance                                126,030            16,150                21,150            4,890
     Professional fees and
        general and administrative             34,600            21,540                19,410            6,590
     Management fees                          146,600           146,600                48,860           48,860
                                        -------------     -------------         -------------    -------------

                                            7,267,930         1,572,190             6,080,700          527,030
                                        -------------     -------------         -------------    -------------

(Loss)/income before taxes                (6,087,560)           148,220           (5,625,170)           56,640

Tax provision                                 238,380            56,900               395,250           19,880
                                        -------------     -------------         -------------    -------------

Net (loss)/income                       $ (6,325,940)     $      91,320         $ (6,020,420)    $      36,760
                                        =============     =============         =============    =============

Weighted average common
   shares outstanding                         815,200           815,200               815,200          815,200
                                        =============     =============         =============    =============

Basic (loss)/income per common share    $      (7.76)     $        0.11         $      (7.39)    $        0.05
                                        =============     =============         =============    =============
</TABLE>


The accompanying notes are an integral part of these statements.




<PAGE>



                                  JETFLEET III
                            Statements of Cash Flows

<TABLE>
<CAPTION>


                                                                 For the Nine Months Ended September 30,
                                                                       2003                  2002
                                                                       ----                  ----
                                                                                Unaudited

<S>  <C>                                                          <C>                   <C>


Net cash provided by operating activities                         $      151,780        $     590,640
                                                                  --------------        -------------

Investing activities:
     Purchase of interests in aircraft                                  (23,680)                    -
     Proceeds from sale of aircraft and aircraft engines                       -              197,000
                                                                  --------------        -------------
Net cash (used)/provided by investing activity                          (23,680)              197,000
                                                                  --------------        -------------

Net increase in cash                                                     128,100              787,640

Cash, beginning of period                                              2,065,830            1,045,450
                                                                  --------------        -------------

Cash, end of period                                               $    2,193,930        $   1,833,090
                                                                  ==============        =============

Supplemental disclosures of cash flow information:
Cash paid during the period for:                                       2003                  2002
                                                                       ----                  ----
     Interest, net of amount capitalized                          $      684,520        $     684,520
     Income taxes                                                              -                4,430

</TABLE>


The accompanying notes are an integral part of these statements.


<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

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"). In accordance with the trust indenture governing the Bonds, the
maturity date of the Bonds may be extended by up to six months at the Company's
sole discretion. In August 2003, the Company sent a notice to the indenture
trustee extending the maturity date of the Bonds to April 30, 2004.

         All of the Company's outstanding common stock is owned by JetFleet
Holding Corp. ("JHC"), a California corporation formed in January 1994. JHC's
wholly owned subsidiary, JetFleet Management Corp. ("JMC") has a management
agreement with the Company. JMC also manages AeroCentury Corp., a Delaware
corporation, and has acted as manager for 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.

         Although the Company believes that it has included all adjustments
necessary for a fair presentation of the interim periods presented and that the
disclosures are adequate to make the information presented not misleading, the
Company suggests that these financial statements be read in conjunction with the
financial statements and related notes included in the Company's annual report
on Form 10-KSB for the fiscal year ended December 31, 2002.

         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, 2003, the Company maintained $4,909,340 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 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 third party valuations. In the event such valuations are
less than the recorded value of the assets, the assets are written down to their
estimated realizable value. For those assets on which an impairment is realized,
accumulated depreciation and impairment loss are netted against the original
cost basis and a new cost basis for such assets is then listed on the balance
sheet. As discussed in Notes 2 and 3, the Company wrote down four of its assets
in September 2003.



<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

1.       Summary of Significant Accounting Policies (continued)

         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").

         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 has been 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, the estimated amount and timing of cash flow associated with each
aircraft that are used to evaluate impairment, if any, and accrued maintenance
costs in excess of amounts received from lessees.

         Maintenance Deposits

         Maintenance costs under the Company's triple net leases are generally
the responsibility of the lessees. The Company periodically reviews maintenance
deposits for adequacy in light of the number of hours flown, airworthiness
directives issued by the manufacturer or government authority, and the return
conditions specified in the lease. As a result of such review, when it is
probable that the Company has incurred costs for maintenance in excess of
amounts received from lessees, the Company accrues its share of costs for work
to be performed as a result of hours flown.


<PAGE>

                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

1.       Summary of Significant Accounting Policies (continued)

         Recent Accounting Pronouncements

     In January 2003, the FASB issued  interpretation FIN No. 46,  Consolidation
of Variable  Interest  Entities  ("FIN No. 46").  FIN No. 46 requires a variable
interest  entity to be  consolidated by a company if that company is the primary
beneficiary of the entity.  FIN No. 46 also requires  disclosures about variable
interest  entities that a company is not required to consolidate but in which it
has a significant variable interest. The Company has no material interest in any
variable interest entity.

2.       Aircraft and Aircraft Engines Under Operating Leases

         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"). The Company did not acquire any assets during the first nine months
of 2003 because, in accordance with the trust indenture, the Company's excess
cash flow is being held for deposit to a sinking fund account.

         In June 2003, S/N 13 was re-leased to a new customer, a U.S. company
which is using the aircraft in Asia, under a six month lease, with an option to
extend for an additional six months. The Customer has indicated that it will
return the aircraft at the expiration of the initial six month lease.

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

         S/N 640 and S/N 751 are leased to a regional carrier in the Maldives
for terms expiring in August 2005 and October 2004, respectively.

         In May 2003, the lease for S/N 696 was extended by the carrier in the
United Kingdom through April 2004.

         S/N 24 was re-delivered to the Company in November 2002 after
expiration of the lease. Although the Company had signed a term sheet for the
re-lease of this aircraft, during the third quarter, the potential lessee
decided not to take delivery of the aircraft. The Company is seeking re-lease or
sale possibilities for S/N 24.

         In preparation for the sale of its aircraft prior to the maturity date
of the Bonds on April 30, 2004, the Company has obtained an appraisal of its
aircraft portfolio. Based on the projected net sales values for the Company's
aircraft, in September 2003, the Company recorded a provision for impairment in
value for S/N 13, S/N 106, S/N 696 and S/N 24, totaling $5,505,000. The Company
has begun seeking buyers for its aircraft and intends to complete sales
transactions for all its aircraft prior to the maturity date of the Bonds.

<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

2.       Aircraft and Aircraft Engines Under Operating Leases (continued)

         As of September 30, 2003, minimum future lease rent payments receivable
under noncancelable leases were as follows:

         Year                          Amount

         2003                       $     433,750
         2004                           1,025,000
         2005                             157,500
                                    -------------
                                    $   1,616,250
                                    =============

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,
2002. The rate will remain at 8.24% through April 30, 2004.

         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. As of September 30, 2003, the Company had approximately $2,194,000
available for deposit to the sinking fund, interest payments on the Notes and
operational expenses.

         As provided for in the trust indenture, the Company has elected to
extend the maturity date of the Bonds to April 30, 2004. As discussed in Note 2,
the Company has obtained an appraisal of its assets and recorded a provision for
impairment in value for four of its aircraft. The Company has also begun seeking
buyers for its aircraft. The proceeds of such sales would be used to repay all
or part of the outstanding indebtedness of the Bonds, depending on the sales
proceeds obtained. It is likely, however, that the total amount of sales
proceeds received will not be sufficient to repay the entire amount of the
Bonds.




<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

4.       Income Taxes

         The items comprising income tax expense are as follows:

<TABLE>
<CAPTION>

                                                                                      For the Nine Months Ended
                                                                                             September 30,
                                                                                          2003             2002
                                                                                          ----             ----
<S>     <C>                                                                         <C>              <C>


         Current tax (benefit)/provision
              Federal                                                               $           -    $            -
              State                                                                       (3,920)             4,850
                                                                                    -------------    --------------
              Current (benefit)/provision                                                 (3,920)             4,850
                                                                                    -------------    --------------

         Deferred tax (benefit)/provision
              Federal                                                                 (2,068,980)            49,380
              State                                                                         (410)             2,670
                                                                                    -------------    --------------
              Deferred tax (benefit)/provision                                        (2,069,390)            52,050
              Valuation allowance                                                       2,311,690                 -
                                                                                    -------------    --------------

         Total provision for income taxes                                           $     238,380    $       56,900
                                                                                    =============    ==============

         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:

                                                                                      For the Nine Months Ended
                                                                                             September 30,
                                                                                          2003             2002
                                                                                          ----             ----

         Income tax (benefit)/expense at statutory federal income tax rate          $ (2,069,770)    $       50,390
         State tax (benefit)/expense net of federal benefit                               (4,320)               890
         Tax refunds                                                                      (4,720)                 -
         Tax rate differences                                                               5,500             5,620
         Valuation allowance                                                            2,311,690                 -
                                                                                    -------------    --------------
         Total (benefit)/provision for income taxes                                 $     238,380    $       56,900
                                                                                    =============    ==============

         Temporary differences and carryforwards which gave rise to a
significant portion of deferred tax assets and liabilities as of September 30,
2003 are as follows:

         Deferred tax assets:
              Amortization of offering costs                                        $       9,720
              Depreciation and impairment on aircraft                                   1,187,930
              Maintenance deposits                                                        930,180
              Net operating loss                                                          154,900
              Prepaid rent and other                                                       36,480
                                                                                    -------------
                  Subtotal                                                              2,319,210
                  Valuation allowance                                                 (2,311,680)
                                                                                    -------------
                  Net deferred tax assets                                                   7,530
         Deferred tax liability -
              Unearned income                                                             (7,530)
                                                                                    -------------
         Net deferred tax assets                                                    $           -
                                                                                    =============
</TABLE>


<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

4.       Income Taxes (continued)

         The Company does not expect to generate adequate future taxable income
to realize the benefits of the remaining deferred tax assets on the balance
sheet. Therefore, the Company has recognized a valuation allowance equal to the
net deferred tax asset. The Company's net operating losses of $452,500 may be
carried forward for twenty years and begin to expire in 2021.

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 2003
and 2002, 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 2003 or 2002, it did not pay any acquisition
fees or Chargeable Acquisitions Expenses to JMC. The Company paid remarketing
fees of $3,000 to JMC in the first nine months of 2002 in connection with the
sale of an aircraft. No such fees were paid in 2003.

         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 2003 or 2002.



<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 intention to sell all of the aircraft prior to the
maturity date of the Bonds; the likelihood that the sales proceeds for the
aircraft will not be sufficient to fully repay the Bonds; the generation of
future taxable income sufficient to realize the benefits of the remaining
deferred tax asset on the balance sheet; the incurrence of significant operating
expenses in connection with its ownership of Income Producing Assets on lease;
the sufficiency of reserves to meet immediate cash requirements for off-lease
aircraft; the Company's belief that a sale of assets at this time is the only
feasible means to raise cash to apply toward the Bond obligations; the Company's
intention to complete aircraft portfolio sales prior to the Bond maturity date;
management's intention to seek sales opportunities for the assets at or above
the appraised amount; the anticipation that sales proceeds are likely to be
insufficient to repay the entire amount of the Bonds; are forward looking
statements. While the Company believes that such statements are accurate, actual
results may differ due to the short-term market for used turboprop aircraft; the
condition and marketability of the aircraft in lessee's possession at the time
of sale of such aircraft; the costs for repair and maintenance of returned
aircraft, market conditions in the air travel industry; lack of unanticipated
defaults or terminations by lessees; and future trends and results that cannot
be predicted with certainty. There can be no assurance that the Company will
actually be able to sell all of its aircraft assets prior to the maturity date
of the Bonds. 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 policies by considering
those that involve the most complex or subjective decisions or assessments. The
Company identified these policies to be those related to lease rental revenue
recognition, depreciation policies, valuation of aircraft and maintenance
deposits.

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 are recorded at cost, which includes
acquisition costs. Depreciation is computed using the straight-line method over
each aircraft's estimated economic life to its estimated residual value.

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 third party
valuations. In the event such valuations are less than the recorded value of the
assets, the assets are written down to their estimated realizable value.

Maintenance Deposits

Maintenance costs under the Company's triple net leases are generally the
responsibility of the lessees. The Company periodically reviews maintenance
deposits for adequacy in light of the number of hours flown, airworthiness
directives issued by the manufacturer or government authority, and the return
conditions specified in the lease. As a result of such review, when it is
probable that the Company has incurred costs for maintenance in excess of
amounts received from lessees, the Company accrues its share of costs for work
to be performed as a result of hours flown.

<PAGE>


Results of Operations

The Company recorded net loss of ($6,325,940) or ($7.76) per share for the nine
months ended September 30, 2003 versus net income of $91,320 or $0.11 per share
for the same period in 2002. The Company recorded net loss of ($6,020,420) or
($7.39) per share for the three months ended September 30, 2003 versus net
income of $36,760 or $0.05 per share for the same period in 2002.

Rent income was approximately $525,000 and $118,000 lower in the nine months and
three months, respectively, ended September 30, 2003 than 2002, primarily
because of the loss of rent from aircraft which were returned to the Company in
the fourth quarter of 2002 after lease expiration, the effect of which was
partially offset by the rent received in 2003 for an aircraft which had been off
lease for part of 2002. Other income was lower in the nine month and three month
periods of 2002 by approximately $15,000 and $10,000, respectively, due to lower
cash balances and lower prevailing interest rates.

Depreciation, amortization, interest and management fees were approximately the
same in both years. Although the Company obtains periodic appraisals for
compliance with SFAS No. 144, it has recently obtained a liquidation value
appraisal in connection with management's plan to sell the Company's aircraft
portfolio. Based on that appraisal and the projected net sales values for the
Company's aircraft, in September 2003, the Company recorded a provision for
impairment in value for S/N 13, S/N 106, S/N 696 and S/N 24, totaling
$5,505,000. Given the current depressed market for aircraft such as that owned
by the Company, the Company has extended the maturity date of the Bonds to April
30, 2004, in an effort to increase the likelihood of locating buyers for the
aircraft and to maximize proceeds realizable from the aircraft sale applicable
toward repayment on the Bonds. See "Outlook," below.

Maintenance expense was approximately $66,000 and $18,000 higher in the nine
months and three months ended September 30, 2003, respectively, versus the same
periods in 2002 primarily as a result of work performed on two aircraft to
prepare them for delivery to a new customer.

Insurance expense was approximately $110,000 and $16,000 higher in the nine
months and three months ended September 30, 2003, respectively, versus the same
periods in 2002 as a result of higher insurance premium costs for coverage of
aircraft which were on lease in 2002 (and therefore covered by lessee's
insurance) but were off lease in 2003.

Professional fees and general and administrative expenses were approximately
$13,000 higher in both the nine month and three month periods of 2003 due to
legal fees incurred in connection with the potential re-lease of one of the
Company's aircraft. These fees, which would have been amortized over the lease
term, were expensed in September 2003 as a result of the lessee's decision not
to take delivery of the aircraft.

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 leases for the Company's aircraft expire at varying times through September
2005.

The Company's primary use of its operating cash flow is interest payments to its
Unitholders. 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. Although the Company
currently has available adequate reserves to meet any cash requirements for
off-lease aircraft, the Company does not expect that sales proceeds, when
combined with the Company's cash holdings, will be sufficient to repay the
entire amount of the Bonds. See "Outlook," below.

<PAGE>


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, 2002. The Company has
determined that the rate will remain at 8.24% through April 30, 2004.

The Company's decrease in cash flow from operations was due primarily to
decreased rent income, increased insurance expense and the effect of the change
in deposits. The effect of these changes was partially offset by the effect of
the change in accounts receivable, deferred taxes and accounts payable.

Cash flow provided by investing activities was lower in 2003 versus 2002 because
the Company sold no aircraft in 2003 versus one such sale in 2002 and because,
in 2003, the Company made equipment purchases of $23,680 for equipment added to
aircraft already owned. There were no cash flows from financing activities
during 2003 or 2002 because the Offering terminated during June 1997.

Outlook

As provided for in the trust indenture, the Company has elected to extend the
maturity date of the Bonds to April 30, 2004. Although the Company had
previously anticipated obtaining bank financing secured by the Company's
portfolio, management was unable to find suitable financing sources for the
aircraft. Therefore, management believes that a sale of the aircraft portfolio
is the only feasible means to raise cash to apply toward the Bond obligations.
In connection therewith, management has begun soliciting buyers for the aircraft
and has obtained a liquidation value appraisal for each of the aircraft assets.
Although the Company intends to complete sales transactions for all its aircraft
prior to the maturity date of the Bonds in April 2004, given the current market
for aircraft such as those owned by the Company, there is no assurance that the
Company will locate willing buyers, or if located, that the buyers will pay a
price for the asset at least equal to the appraised value.

As a result of the aircraft appraisals received by management, in September
2003, the Company recorded a provision for impairment in value, totaling
$5,505,000, for four of its aircraft. The Bond indebtedness exceeds the
aggregate appraised value of the aircraft by approximately $5,842,000. Though
management will seek sales opportunities for all of its assets at or above the
appraised amounts, it is likely, that the total amount of sales proceeds
received, when combined with the Company's cash holdings of approximately
$2,194,000, will not be sufficient to repay the entire amount of the Bonds.

Factors that May Affect Future Results

Further Deterioration of the Air Travel Industry. The Company's ability to make
a substantial repayment on the Bonds at their maturity date will depend upon its
ability to locate buyers and consummate sales transactions by that date. Based
on the most recent appraisals, it appears likely that the Company will be unable
to repay the entire Bond indebtedness when it comes due on April 30, 2003. The
aircraft leasing industry is currently on the downside of a business cycle, and
this has resulted in depressed sales prices for assets such as the Company's
aircraft. See "Leasing Risks," below. It does not appear that the industry will
recover significantly prior to maturity of the Bonds. Moreover, any further
weakening of the industry could cause the proceeds realized from the sale of
aircraft to be even less than suggested by the Company's recent appraisal.

Unexpected Expenses. The Company anticipates that nearly all of the available
cash it currently holds will be combined with sales proceeds to repay the
Bondholder indebtedness. Unanticipated events such as changes in governmental
regulations or casualties could create obligations for the Company as lessor or
owner of the aircraft and require the Company to immediately use funds in order
to comply with such obligations. If there is an unanticipated expense with
respect to the Company's operations or any of its aircraft that is not covered
by the lessee under its lease or by appropriate insurance, the Company may be
required to use cash reserves in order to comply with its lease or other
contractual obligations to lessees or other obligations. Any significant
unexpected expense may result in a decrease in funds available to repay the
Bondholder indebtedness at maturity. See, also "Casualties; Insurance Coverage,"
below.

<PAGE>


Ownership Risks. As the Bond maturity date is within six months, factors that
could affect the short term value of the aircraft are crucial to the ability of
the Company to maximize its repayment to the Bondholders. As discussed above,
industry conditions will be an important determining factor in the 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, will be a significant factor
in what proceeds could be realized from the aircraft assets at the maturity date
of the Bonds.

Inability to Sell Assets. The Company intends to sell all of its aircraft before
the April 30, 2004 Bond maturity date. There is no assurance that the Company
will locate a willing buyer, or if one is located, that the buyer will pay a
price for the asset at least equal to the appraised value. ,If any aircraft
remain unsold at the Bond Maturity Date, it is likely that after the required
cure period passes, the Indenture Trustee will declare a default on the Bond
indebtedness. One remedy available to the Trustee is to repossess the unsold
aircraft unsold and engage a third party agent to liquidate the remaining
JetFleet III assets. This is likely to result in higher costs than would have
been the case had the Company been able to consummate the sale of the aircraft
portfolio without the involvement of the Trustee.

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 carriers. 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.

Reliance on JMC. All management of the Company is performed by JMC pursuant to a
management agreement between JMC and the Company. The Company's 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. In particular, JMC is management
company for AeroCentury Corp ("ACY"), which specializes in owning and leasing
the same type of regional aircraft as the Company. In fact, ACY and the Company
have two common lessees, and in any sale of an asset, ACY may be a potential
purchaser. The Company is mindful of the inherent conflict of interests in such
a sale and intends to take steps, such as the hiring of third parties to provide
objective information regarding aircraft, sale pricing and potential customers
to help ensure that any sale to ACY is conducted as an arms-length, third party
market transaction.

JMC was also management company for another aircraft portfolio owner,
AeroCentury IV, Inc. ("AeroCentury IV) AeroCentury IV is in the final stages of
liquidation or wrap-up phase. In the first quarter of 2002, AeroCentury IV
defaulted on certain obligations to noteholders. In June 2002, the indenture
trustee for AeroCentury IV's noteholders repossessed AeroCentury IV's assets and
took over management of AeroCentury IV's remaining assets.

Lessee Credit Risk. If a lessee defaults upon its obligations under a lease, the
Company may be limited in its ability to enforce remedies. 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.

<PAGE>


Leasing Risks. As discussed above, in "Further Deterioration of the Air Travel
Industry" the aircraft industry is currently in the midst of a severe downturn,
and it does not appear likely that a recovery in aircraft prices will occur
prior to the Bond maturity date. Demand for 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
prices 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 used aircraft in the recent
past has been and remains 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 further in value. .

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. 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.

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.

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.



<PAGE>



Item 3. Controls and Procedures

Quarterly evaluation of the Company's Disclosure Controls and Internal Controls.
As of the end of the period covered by this report, the Company evaluated the
effectiveness of the design and operation of its "disclosure controls and
procedures" ("Disclosure Controls"), and its "internal control over financial
reporting" ("Internal Controls"). This evaluation (the "Controls Evaluation")
was done under the supervision and with the participation of management,
including the Company's Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"). Rules adopted by the SEC require that in this section of the
Report the Company present the conclusions of the CEO and the CFO about the
effectiveness of our Disclosure Controls and Internal Controls based on and as
of the date of the Controls Evaluation.

CEO and CFO Certifications. Attached as exhibits to this report are two separate
forms of "Certifications" of the CEO and the CFO. The first form of
Certification is required in accordance with Section 302 of the Sarbanes-Oxley
Act of 2002 (the "Section 302 Certification"). This section of the report which
you are currently reading is the information concerning the Controls Evaluation
referred to in the Section 302 Certifications and this information should be
read in conjunction with the Section 302 Certifications for a more complete
understanding of the topics presented.

Disclosure Controls and Internal Controls. Disclosure Controls are procedures
that are designed with the objective of ensuring that information required to be
disclosed in the Company's reports filed under the Securities Exchange Act of
1934 (the "Exchange Act"), such as this report, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's ("SEC") rules and forms. Disclosure Controls are also
designed with the objective of ensuring that such information is accumulated and
communicated to the Company's management, including the CEO and CFO, as
appropriate to allow timely decisions regarding required disclosure. Internal
Controls are procedures which are designed with the objective of providing
reasonable assurance that (1) the Company's transactions are properly
authorized; (2) the Company's assets are safeguarded against unauthorized or
improper use; and (3) the Company's transactions are properly recorded and
reported, all to permit the preparation of the Company's financial statements in
conformity with generally accepted accounting principles.

Limitations on the Effectiveness of Controls. The Company's management,
including the CEO and CFO, does not expect that its Disclosure Controls or its
Internal Controls will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, control may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation. The CEO/CFO evaluation of the Company's
Disclosure Controls and the Company's Internal Controls included a review of the
controls objectives and design, the controls implementation by the company and
the effect of the controls on the information generated for use in this report.
In the course of the Controls Evaluation, we sought to identify data errors,
controls problems or acts of fraud and to confirm that appropriate corrective
action, including process improvements, were being undertaken. This type of
evaluation will be done on a quarterly basis so that the conclusions concerning
controls effectiveness can be reported in the Company's quarterly reports on
Form 10-QSB and annual report on Form 10-KSB. The Company's Internal Controls
are also evaluated on an ongoing basis by other personnel in the Company's
finance organization and by the Company's independent auditors in connection
with their audit and review activities. The overall goals of these various
evaluation activities are to monitor the Company's Disclosure Controls and the
Company's Internal Controls and to make modifications as necessary; the
Company's intent in this regard is that the Disclosure Controls and the Internal
Controls will be maintained as dynamic systems that change (including with
improvements and corrections) as conditions warrant.

<PAGE>


Among other matters, the Company sought in its evaluation to determine whether
there were any "significant deficiencies" or "material weaknesses" in the
Company's Internal Controls, or whether the Company had identified any acts of
fraud involving personnel who have a significant role in the Company's Internal
Controls. This information was important both for the Controls Evaluation
generally and because item 5 in the Section 302 Certifications of the CEO and
CFO require that the CEO and CFO disclose that information to the Audit
Committee of the Company's Board and to the Company's independent auditors and
to report on related matters in this section of the Report. In the professional
auditing literature, "significant deficiencies" are referred to as "reportable
conditions"; these are control issues that could have a significant adverse
effect on the ability to record, process, summarize and report financial data in
the financial statements. A "material weakness" is defined in the auditing
literature as a particularly serious reportable condition where the internal
control does not reduce to a relatively low level the risk that misstatements
caused by error or fraud may occur in amounts that would be material in relation
to the financial statements and not be detected within a timely period by
employees in the normal course of performing their assigned functions. The
Company also sought to deal with other controls matters in the Controls
Evaluation, and in each case if a problem was identified, the Company considered
what revision, improvement and/or correction to make in accordance with our
on-going procedures.

In accordance with SEC requirements, the CEO and CFO note that, there has been
no significant change in Internal Controls that occurred during our most recent
fiscal quarter that has materially affected or is reasonably likely to
materially affect our Internal Controls.

Conclusions. Based upon the Controls Evaluation, the Company's CEO and CFO have
concluded that, subject to the limitations noted above, the Company's Disclosure
Controls are effective to ensure that material information relating to the
Company and its consolidated subsidiaries is made known to management, including
the CEO and CFO, particularly during the period when periodic reports are being
prepared, and that the Company's Internal Controls are effective to provide
reasonable assurance that the Company's financial statements are fairly
presented in conformity with generally accepted accounting principles.



<PAGE>


                                     PART II

                                OTHER INFORMATION

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

(a)      Exhibits.

                    Exhibit
                    Number                  Description

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


* This certificate is furnished to, but shall not be deemed to be filed with,
the Securities and Exchange Commission.



 (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, 2003        By:    /s/ Neal D. Crispin
                                         -------------------------------
                                         Neal D. Crispin

                                  Title: President, Chief Financial Officer