UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB




[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1997

or

[  ]    TRANSITION REPORT PURSUANT TO 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 as specified in its charter)


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

                        1440 CHAPIN AVENUE, SUITE 310
                          BURLINGAME, CALIFORNIA
                (Address of principal executive office)
                                 94010
                              (Zip Code)
    Issuer's telephone number, including area code:    (415) 696-3900




Indicate by check mark whether the issuer: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange 
Act of 1934 during the preceding 12 months (or for such shorter period 
that the registrant was required to file such reports), and (2) has 
been subject to the filing requirements for the past 90 days. Yes X No 


On August 14, 1997, 815,200 shares of common stock and 195,465 shares 
of preferred stock were outstanding.

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


PART I.    FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS

JETFLEET III
Balance Sheets

ASSETS
<TABLE>
<CAPTION>
                                            June 30,    December 31,
                                              1997          1996
                                             ------        -------
                                          (Unaudited)
<BTB>
<S>                                    <C>               <C>  
Current assets:
        Cash                           $    2,041,415    $    255,851
        Rent receivable                        55,864          13,000
        Accounts receivable                         -             658
                                          -----------     -----------
        Total current assets                2,097,279         269,509
                                          -----------     -----------

Aircraft under operating lease, net of
    accumulated depreciation of
    $475,672 in 1997 and $258,793 in 1996   9,799,780       6,546,145
Secured notes receivable                            -       2,311,146
Debt issue costs, net of accumulated
    amortization of $215,807 in 1997
    and $119,850 in 1996                    1,274,328       1,143,335
Other                                          65,000         184,736
                                           ----------     -----------
                                       $   13,236,387    $ 10,454,871
                                        =============     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
        Accounts payable - trade       $          539    $    12,285
        Payable to affiliates                  53,379             71
        Interest payable                      238,498        183,053
        Prepaid rent                           63,300              -
        Maintenance reserves                  101,929              -
        Other                                       -         13,271
                                           ----------    -----------
        Total current liabilities             457,645        208,680
Medium-term secured bonds                  11,076,350      8,806,850
                                           ----------    -----------
Total liabilities                          11,533,995      9,015,530

Preferred stock, no par value,
    300,000 shares authorized, 195,465
    and 155,415 issued and outstanding
    in 1997 and 1996, respectively          1,691,685      1,331,235
Common stock, no par value,    
    1,000,000 shares authorized, 613,650
    and 518,050 issued and outstanding in
    1997 and 1996, respectively               613,650        518,050
Accumulated deficit                          (602,943)      (409,944)
                                           ----------    -----------

Total shareholders' equity                  1,702,392      1,439,341
                                           ----------    -----------
                                        $  13,236,387   $ 10,454,871
                                          ===========    ===========
<FN>
See accompanying notes.
</TABLE>


JETFLEET III
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>

                         For the Six Months For the Three Months
                             Ended June 30,    Ended June 30,
                             1997    1996       1997    1996
                             -----   -----      -----   ------
Revenues:
<BTB>
<S>                       <C>       <C>       <C>       <C>
      Rent income, net of 
         finance charges $ 858,194  $ 241,177 $ 472,650 $ 161,935
      Interest income       44,663      4,419     4,013     4,419
                          --------  --------- --------- ---------
                           902,857    245,596   476,663   166,354
                          --------  --------- --------- ---------

Expenses:

      Depreciation expense 216,879    286,842   123,438   145,421
      Amortization expense  95,957     42,924    49,856    24,794
      Interest expense     675,141    183,814   357,885   124,119
      Professional fees      7,774     14,260     1,440     8,000
      Management fees       96,307     37,864    48,866    24,120
      General and 
          administrative     3,798      4,482     3,310       674
                          --------  --------- --------- ---------
                         1,095,856    570,186   584,795   327,128
                          --------  --------- --------- ---------
Net loss                $ (192,999) $(324,590)$(108,132)$(160,774)
                          ========  ========= ========= =========
Weighted average 
      common shares        580,903    500,000   613,650   500,000
                          ========  ========= ========= =========
Loss per common share   $    (0.33) $   (0.65)$   (0.18)$   (0.32)
                          ========  ========= ========= =========





















<FN>
See accompanying notes.
</TABLE>



JETFLEET III
Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>

                                           For the Six Months
                                             Ended June 30,
                                             1997       1996
<BTB>                                        ----       ----

<S>                                     <C>          <C>
Net cash provided/(used) by 
        operating activities            $  278,514   $ (151,092)

Investing activities -
    Purchase of interests in aircraft     (991,550)  (3,272,088)

Financing activities:
    Proceeds from issuance of medium-term
        secured bonds                    2,269,500    3,346,450
    Debt issue costs                      (226,950)    (334,645)
    Proceeds from issuance of
        preferred stock                    400,500      590,550
    Offering costs                         (40,050)     (59,055)
    Proceeds from issuance of common stock  95,600            -
                                        ----------    ---------
        Net cash provided by
            financing activities         2,498,600    3,543,300
                                        ----------    ---------
Net increase in cash                     1,785,564      120,120

Cash, beginning of period                  255,851       68,328
                                        ----------    ---------
Cash, end of period                   $  2,041,415  $   188,448
                                        ==========    =========
<FN>
Supplemental schedule of noncash investing and financing 
activities:
During the first quarter of 1997, the Company exercised its option 
to purchase three aircraft which previously served as collateral 
for loans made by the Company during 1996.  The purchase price for 
the three aircraft was equal to the unpaid balance, including 
principal and interest totalling $2,294,228, on the secured note 
for each aircraft, which balances were paid in full by the seller 
immediately prior to the Company's purchase of each aircraft.

















See accompanying notes.
</TABLE>


JETFLEET III
Notes to Financial Statements
June 30, 1997
(Unaudited)

1.    Basis of Presentation

    JetFleet III (the "Company") was incorporated in the state of 
California on August 23, 1994 ("Inception").  All of the Company's 
outstanding stock is owned by JetFleet Management Corp. ("JMC"), a 
California corporation formed in January 1994.  JMC is an 
integrated aircraft management, marketing and financing business, 
and also manages, on behalf of their respective general partners, 
the aircraft assets of JetFleet Aircraft, L.P.and JetFleet 
Aircraft II, L.P., publicly offered limited partnership programs 
with objectives similar to the Company's.  The accompanying 
balance sheets at June 30, 1997 and December 31, 1996 and 
statements of operations and cash flows for the six months and 
three months ended June 30, 1997 and 1996 reflect all adjustments 
(consisting of only normal recurring accruals) which are, in the 
opinion of the Company, necessary for a fair presentation of the 
financial results.  The results of operations of such periods 
are not necessarily indicative of results of operations for a full 
year.  The statements should be read in conjunction with the 
Summary of Significant Accounting Policies and other notes to 
financial statements included in the Company's Annual Report on 
Form 10-KSB for the year ended December 31, 1996.

2.    Organization and Capitalization

    The Company was formed solely for the purpose of acquiring 
Income Producing Assets.  The Company anticipates that these 
assets will be Equipment, consisting mainly of aircraft, aircraft engines,
aircraft parts or other transportation industry equipment 
subject to operating or full payout leases with third parties.

    Between September 1995 and April 1995, the Company raised 
$13,031,000 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").  The Bonds 
bear an annual interest rate of 12.94% from issuance 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 200 basis points, but not less than 8.24%.  
The Company may prepay all or a portion of the outstanding 
principal of the Bonds at any time beginning November 1, 1998.  
The Preferred Stock is issued for $10 per share and is entitled to 
receive 50%, in the aggregate, of any remaining proceeds after (1) 
the Preferred Stock has been redeemed at $10 per share and (2) the 
Common Stock has been redeemed at $1 per share.  A dividend can 
only be paid on the Common Stock if a dividend has also been paid 
on each share of Preferred Stock in an amount equal to ten times 
the per-share dividend paid on the Common Stock. All of the 
Company's outstanding common stock is owned by JMC.

    JMC has incurred certain costs in connection with the 
organization of the Company and the Offering.  The Company will 
pay an Organization and Offering Expenses reimbursement (the 
"Reimbursement") to JMC in an amount up to 2.0% of Aggregate 
Offering Proceeds.  The Reimbursement is limited to $400,000 or 
the amount paid by JMC in excess of $450,000, whichever is less.  
JMC contributed $450,000 of the total it estimates it will pay 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 JMC in return for the Initial 
Contribution.  To the extent that JMC incurs expenses in excess of 
the 2.0% cash limit, such excess expenses will be repaid to JMC 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 can issue is limited according to the amount of 
Aggregate Gross Offering Proceeds raised by the 

JETFLEET III
Notes to Financial Statements
June 30, 1997
(Unaudited)

2.    Organization and Capitalization (continued)

Company.  The Company capitalized the portions of both the 
Reimbursement paid by the Company and the Initial Contribution 
related to the Bonds (85%) and amortizes such costs over the life 
of the Bonds (approximately 8 years).  The remainder of any of the 
Initial Contribution and Reimbursement is deducted from 
shareholders' equity.

    On December 31, 1996 and March 4, 1997, JMC purchased an 
additional 18,050 and 95,600 shares of common stock, respectively, 
in the Company at a price of $1.00 per share in order to make its 
investment in common stock equal to 5% of the proceeds raised by 
the Company.


3.    Aircraft and Aircraft Engines Under Operating Leases

    Aircraft and aircraft engines

    The Company owns interests in a deHavilland DHC-8-100, serial 
number 13 ("S/N 13"), a Fairchild Metro II SA-226-TC, serial 
number TC-370 ("S/N TC-370"), a Shorts SD-360, serial number S/N 
3611 ("S/N 3611"), a Fairchild Metro III SA227-AC, serial number 
AC621 ("S/N AC621"), three deHavilland DHC-6-300 aircraft (the 
"Dash-6's") and a Pratt & Whitney JT8D-9A aircraft engine, serial 
number 674267 ("S/N 674267").

    The Company invested approximately $992,000, including 
reimbursement for chargeable acquisition costs and brokerage fees 
of approximately $77,000, in aircraft assets during the first six 
months of 1997.  The Company also exercised its option to purchase 
three aircraft which previously served as collateral for loans 
made by the Company during 1996.  The purchase price for the three 
aircraft was equal to the unpaid balance, including principal and 
interest, on the secured note for each aircraft, which balances 
were paid in full by the seller immediately prior to the Company's 
purchase of each aircraft.

    Aircraft and aircraft engines leases

    S/N 13 is subject to a 120-month lease with the seller.  The 
S/N 13 lease may be terminated by either party, with at least 120 
days prior written notice, beginning at the end of the first 36 
months of the lease.

    S/N TC-370 is subject to a lease with a United States charter 
operator operating under FAA regulations.  The lease contains a 
guaranty by the seller for basic rent in an amount not to exceed a 
total aggregate amount of $29,250 (which guaranty is shared 
equally by the Company and JetFleet II, the co-owner of S/N TC-
370).

    S/N 3611 is subject to a 27-month lease with the seller, a 
British regional airline.

    S/N AC621 is subject to a three year lease with a regional 
carrier in Alaska.

    The Dash-6's are subject to a 48-month lease with a United 
States regional carrier.

    S/N 674267 is subject to a 60-month sublease between the 
seller and a Mexican based regional carrier which operates between 
the United States and Mexico.





JETFLEET III
Notes to Financial Statements
June 30, 1997
(Unaudited)

4.    Medium-term secured bonds

    As mentioned above, the Company raised funds through the 
Offering which closed during April 1997.  Each $1,000 Unit 
subscribed in the offering includes an $850 medium-term secured 
bond maturing on November 1, 2003.  During the second quarter of 
1997, the Company accepted subscriptions for 758 Units aggregating 
$758,000 in Gross Offering Proceeds and, pursuant to the 
Prospectus, issued $644,300 in Bonds and 11,370 shares of 
Preferred Stock.

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. During the first six months of 1997 
and 1996, the Company accrued a total of $96,307 and $37,864, 
respectively, in management fees due JMC.

    Capital Management Associates ("CMA"), an affiliate of JMC, 
provides certain administrative services to the Company.  The 
does not reimburse CMA for those services.  JMC may pay a portion 
of its management fee to CMA in connection with services rendered
for the Company.

    JMC receives a brokerage fee for locating assets for the 
Company, provided that such fee is not more than the customary and 
usual brokerage fee that would be paid to an unaffiliated party 
for such a transaction and provided that the total of the 
Aggregate Purchase Price plus the brokerage fee does not exceed 
the fair market value of the asset based on appraisal.  During the 
first six months of 1997 and 1996, the Company paid JMC a total of 
$73,200 and $238,099, respectively, in brokerage fees, and 
reimbursed JMC for $3,350 and $9,750, respectively, in Chargeable 
Acquisition Expenses.

    As discussed in Note 2, the Company reimburses JMC for certain 
costs incurred in connection with the organization of the Company 
and the Offering.  In the first six months of 1997 and 1996, the 
Company paid $53,400 and $78,740, respectively, to JMC.

    Crispin Koehler Securities (formerly CKS Securities, 
Incorporated), a member of the National Association of Securities 
Dealers, Inc. and a related party of JMC, serves as underwriter 
of the Offering and, as such, receives retail commissions and 
underwriter, due diligence and marketing fees, portions of which 
are paid to third parties.  The Company paid Crispin Koehler 
Securities a total of $213,600 and $314,960 in commissions and 
underwriter, due diligence and marketing fees during the first six 
months of 1997 and 1996, respectively.

5.    Subsequent Events

    During July 1997, JetFleet III purchased 100% and 50% 
undivided interests in two Shorts 360 aircraft, serial numbers 
SH3656 ("S/N SH3656") and SH3676 ("S/N SH3676"), respectively.  
The remaining undivided interest in SH3676 is owned by 
AeroCenturyIV, Inc., an affiliate of JetFleet III.  Both aircraft 
are subject to a 48-month lease with a regional carrier in the 
United Kingdom. 

    As discussed in Note 2, JMC is entitled to receive Excess 
Stock in the Company, issued at a price of $1.00 per share, as 
repayment for Organization and Offering Expenses it incurs in 
excess of the 2.0% Reimbursement.  Pursuant to this arrangement, 
on August 11, 1997, the Company issued an additional 201,550 
shares of common stock in the Company to JMC, as repayment of an 
equal amount of expenses incurred by JMC.



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Capital Resources and Liquidity

    At the end of the second quarter of 1997, the Company had cash 
balances of $2,041,415.  This amount was held for the interest 
payments to the Unitholders, for the purchase of additional 
aircraft in July 1997 and for normally recurring expenses.

    Since Inception, the Company's source of capital has come in 
the form of an initial contribution from JMC, proceeds from the 
Offering and rental revenue from the Income Producing Asset 
purchased using those proceeds.  The Company's liquidity will vary 
in the future, increasing to the extent cash flows from operations 
exceed expenses, and decreasing as interest payments are made 
to the Unitholders and to the extent expenses exceed cash flows 
from leases.

    JetFleet currently has available adequate reserves to meet its 
immediate cash requirements.

    1997 versus 1996

    Cash flow from operations was $278,514 and ($151,092) for 
thesix months ended June 30, 1997 and 1996, respectively.  The 
increase from year to year was partially due to a decrease in net 
loss of approximately $132,000, discussed below.  During 1997, 
JetFleet III had cash inflows of approximately $89,000 and $63,000 
for maintenance reserves and prepaid rent, respectively, and 
payments on receivables of approximately $18,000.  JetFleet III 
also recorded payables of $97,000, which was offset by recording 
receivables of $108,000.  During 1996, JetFleet III had 
cash outflows of approximately $165,000 as a result of a net 
change in payables, with no offsetting cash inflows.

Results of Operations

    The Company recorded net losses of ($192,999) or ($0.33) per 
share and ($324,590) or ($0.65) per share for the six months ended 
June 30, 1997 and 1996, respectively and ($108,132) or ($0.18) per 
share and ($160,774) or ($0.32) per share for the three months 
ended June 30, 1997 and 1996, respectively.  The decreased loss 
was a result of lease-related revenue from additional assets 
purchased during the latter part of 1996 and the first quarter of 
1997, as well as a higher average lease rate.  These increases 
were only partially offset by a related increase in interest 
expense and management fees.

    1997 versus 1996

    Rental income increased approximately $617,000 and $311,000 
for the six and three month periods.  The increase from 1996 to 
1997 was due to the rental income received as a result of the 
purchase of additional aircraft.  During the first quarter of 
1997, the Company also recorded $23,882 of interest income 
attributable to secured loans which were made by the Company 
during the second half of 1996.  As discussed in Note 3, during 
the first quarter of 1997, JetFleet III exercised its purchase 
options for the three aircraft which previously served as 
collateral for the secured loans and capitalized its investment in 
the three aircraft.

    Depreciation was approximately $70,000 and $22,000 lower in 
the six and three month periods ended June 30, 1997, respectively, 
than in the same periods of 1996. The decrease from 1996 to 1997 
was due to a change in estimate of the residual value of S/N 13, 
which change was only partially offset by depreciation associated 
with the additional assets purchased during 1996 and the first 
quarter of 1997.




    Management fees increased approximately $58,000 and $25,000 
for the six and three month periods ended June 30, 1997, over the 
same periods in 1996.  The increase in management fees was due to 
the additional proceeds raised by the Company in the Offering 
during 1996 and 1997.  

    The Company uses substantially all its operating cash flow to 
make interest payments to its Unitholders.  Any excess funds, 
after interest payment, will be aggregated and invested in 
additional Income Producing Assets.  Since the Company plans to 
acquire Income Producing Assets which are subject to triple net 
leases (the lessee pays operating and maintenance expenses, 
insurance and taxes), the Company does not anticipate that it will 
incur significant operating expenses in connection with ownership 
of its Income Producing Assets as long as they remain on 
lease.



SIGNATURES


    Pursuant to the requirements of Section 13 or 15(d) of the 
Securities Act of 1934, the Registrant has duly caused this report to 
be signed on its behalf by the undersigned, thereunto duly authorized 
on August 14, 1997.

    JETFLEET III

<TABLE>
<S>            <C>
    By:        /s/ Neal D. Crispin
                ------------------
                 Neal D. Crispin
                 Title:  President
</TABLE>
    Pursuant to the requirements of the Securities Act of 1934, this 
report has been signed below by the following persons in the 
capacities indicated on August 14, 1997.

    Signature    Title


<TABLE>
<S>                             <C>
/s/ Neal D. Crispin             President and Chairman of the 
-------------------------       Board of Directors of the Registrant
Neal D. Crispin                 Chief Financial Officer

</TABLE>


EXHIBIT INDEX


Exhibit No.           Description       Page No.
------------          ------------         ---------

EX-27                Financial Data Schedule