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 March 31, 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
                 (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 May 15, 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 May 15, 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
                                 March 31, 2003
                                    Unaudited

                                     ASSETS

Current assets:
     Cash                                                         $   2,079,640
     Deposits                                                         2,576,520
     Accounts receivable                                                118,890
                                                                  -------------
Total current assets                                                  4,775,050

Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $2,999,240                   10,623,840
Debt issue costs, net of accumulated
     amortization of $1,528,090                                         133,360
Deferred rent receivable                                                 24,790
Deferred taxes                                                          315,760
Prepaid expenses                                                          9,970
                                                                  -------------

Total assets                                                      $  15,882,770
                                                                  =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                             $     128,380
     Interest payable                                                   152,120
     Prepaid rents                                                       35,000
     Security deposits                                                  272,480
     Maintenance deposits                                             2,344,980
     Medium-term secured bonds                                       11,076,350
                                                                  -------------

Total liabilities                                                    14,009,310
                                                                  -------------

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                                                   (603,190)
                                                                  -------------
Total shareholders' equity                                            1,873,460
                                                                  -------------

Total liabilities and shareholders' equity                        $  15,882,770
                                                                  =============


The accompanying notes are an integral part of these statements.


<PAGE>





                                  JETFLEET III
                            Statements of Operations

<table>
<caption>
                                                                             For the Three Months Ended March 31,
                                                                                     2003              2002
                                                                                     ----              ----
                                                                                           Unaudited

                                                                             <c>              <c>
Revenues:

     Rent income                                                                $     340,990    $     571,110
     Other income                                                                       8,430            9,690
                                                                                -------------    -------------

                                                                                      349,420          580,800
                                                                                -------------    -------------


Expenses:

     Depreciation                                                                     174,380          174,380
     Amortization                                                                      57,150           57,150
     Interest                                                                         228,170          228,170
     Professional fees and general and administrative                                  70,080            9,050
     Management fees                                                                   48,870           48,870
                                                                                -------------    -------------

                                                                                      578,650          517,620
                                                                                -------------    -------------

(Loss)/income before taxes                                                          (229,230)           63,180

Tax (benefit)/provision                                                              (77,380)           26,470
                                                                                -------------    -------------

Net (loss)/income                                                               $   (151,850)    $      36,710
                                                                                =============    =============

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

Basic (loss)/income per common share                                            $      (0.19)    $        0.05
                                                                                =============    =============

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




<PAGE>



                                  JETFLEET III
                            Statements of Cash Flows

<table>
<caption>
                                                                  For the Three Months Ended March 31,
                                                                       2003                  2002
                                                                       ----                  ----
                                                                                Unaudited

                                                               <c>                   <c>

Net cash provided by operating activities                         $       13,810        $      38,540
                                                                  --------------        -------------

Investing activity -
     Proceeds from sale of aircraft and aircraft engines                       -              197,000
                                                                  --------------        -------------
Net cash provided by investing activities                                      -              197,000
                                                                  --------------        -------------

Net increase in cash                                                      13,810              235,540

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

Cash, end of period                                               $    2,079,640        $   1,280,990
                                                                  ==============        =============

Supplemental disclosures of cash flow information:
Cash paid during the period for:                                       2003                  2002
                                                                       ----                  ----
     Interest, net of amount capitalized                          $      228,170        $     228,170
     Income taxes                                                              -                1,480
</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").

         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 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 March 31, 2003, the Company maintained $4,391,660 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 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.

         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
                                    Unaudited

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.

         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

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"). The Company did not acquire any assets during the first three 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.

         From June 2001 through October 2002, S/N 13 was on lease with the same
Australian carrier under a series of short-term lease extensions. The aircraft
was returned to the Company in November 2002 and maintenance work was performed,
financed by maintenance reserves previously collected from the lessee. As
discussed in Note 6, the Company has signed a term sheet for the re-lease of
this aircraft.

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

         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.

         S/N 696 is leased to a regional carrier in the United Kingdom for a
term expiring in April 2003. As discussed in Note 6, the Company and the lessee
have agreed to a one-month extension of this lease and are currently discussing
a long-term extension.

         S/N 24 was re-delivered to the Company in November 2002 after
expiration of the lease. The Company has signed a term sheet for the re-lease of
this aircraft. Delivery is expected to occur in the third quarter of 2003.

         As of March 31, 2003, minimum future lease rent payments receivable
under noncancelable leases were as follows:

         Year                          Amount

         2003                       $     857,500
         2004                             940,000
         2005                             157,500
                                    -------------

                                    $   1,955,000






<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

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 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 March 31, 2003, the Company had approximately
$2,080,000 available for deposit to the sinking fund, interest payments on the
Notes and operational expenses.

         As the maturity date of the Bonds nears, it is likely that the Company
will seek to refinance the Bonds using bank financing. The proceeds of such
financing would be used to repay all or part of the outstanding indebtedness of
the Bonds, depending on the appraised value of the aircraft and the amount of
the financing that the Company is able to obtain.

4.       Income Taxes

         The items comprising income tax expense are as follows:

<table>
<caption>
                                                                                 For the Three Months Ended March 31,
                                                                                          2003             2002
                                                                                          ----             ----

         
                                                                        <c>              <c>
         Current tax (benefit)/provision
              Federal                                                               $           -    $            -
              State                                                                       (3,920)             2,280
                                                                                    -------------    --------------
              Current (benefit)/provision                                                 (3,920)             2,280
                                                                                    -------------    --------------

         Deferred tax (benefit)/provision
              Federal                                                                    (77,150)            22,630
              State                                                                         3,690             1,560
                                                                                    -------------    --------------
              Deferred tax (benefit)/provision                                           (73,460)            24,190
                                                                                    -------------    --------------

         Total (benefit)/provision for income taxes                                 $    (77,380)    $       26,470
                                                                                    =============    ==============

         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 Three Months Ended March 31,
                                                                                          2003             2002
                                                                                          ----             ----

         Income tax (benefit)/expense at statutory federal income tax rate          $    (77,940)    $       21,480
         State taxes net of federal benefit                                                 (240)               560
         Tax refunds                                                                      (4,720)                 -
         Tax rate differences                                                               5,520             4,430
                                                                                    -------------    --------------
         Total (benefit)/provision for income taxes                                 $    (77,380)    $       26,470
                                                                                    =============    ==============

</table>
<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                                    Unaudited

4.       Income Taxes (continued)

         Temporary differences and carryforwards which gave rise to a
significant portion of deferred tax assets and liabilities as of March 31, 2003
are as follows:

         Deferred tax assets:
              Net operating loss                              $     148,140
              Maintenance deposits                                  799,730
              Prepaid rent and other                                 12,210
                                                              -------------
                  Subtotal                                          960,080
                  Valuation allowance                                     -
                                                              -------------
                  Net deferred tax assets                           960,080
         Deferred tax liability -
              Depreciation of aircraft                            (634,900)
              Other                                                 (9,420)
                                                              -------------
                                                              $     315,760
                                                              =============

         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 $433,000 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 2003 and 2002, the Company
accrued a total of $48,870 and $48,870, 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 three 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 three 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.

6.       Subsequent Events

         In April 2003, the Company and the lessee of S/N 696 agreed to a
one-month extension of the lease and are currently discussing a long-term
extension.

         In May 2003, the Company signed a term sheet for the re-lease of S/N 13
for a term of six months, with an option to extend for an additional six months.

<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 delivery of S/N in the third quarter; the refinancing of the Bonds
using bank financing; the generation of future taxable income sufficient to
realize the benefits of the remaining deferred tax asset on the balance sheet;
the sufficiency of the Company's cash flow to meet interest obligations and fund
sinking fund deposits; and the belief that refinancing its indebtedness may
offer the best option to repay bondholders; are forward looking statements.
While the Company believes that such statements are accurate, actual results may
differ due to unanticipated defaults or terminations by lessees, the
availability of sufficient refinancing funds on terms and conditions acceptable
to the Company; the depth and length of the current aircraft industry downturn,
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 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 $151,850 or ($0.19) per share for the three
months ended March 31, 2003 and net income of $36,710 or $0.05 per share for the
three months ended March 31, 2002.

Rent income was approximately $230,000 lower in the three months ended March 31,
2003 versus the same period in 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 only partially offset by the rent
received in 2003 for an aircraft which had been off lease for part of the first
quarter of 2002. Other income was approximately the same in both three month
periods.

Depreciation, amortization, interest and management fees were the same in both
years. Professional fees and general and administrative expenses were
approximately $61,000 higher in the three months ended March 31, 2003 compared
to the same period in 2002 as a result of additional 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.

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

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 October 31, 2003.

The Company's decrease in cash flow from operations was due primarily to a net
loss in 2003 versus net income in 2002, and by the effect of the change in
deposits. The effect of these changes was partially offset by the effect of the
change in accounts receivable 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. There were no
cash flows from financing activities during 2003 or 2002 because the Offering
terminated during June 1997.

Outlook

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 March 31, 2003, the Company had approximately
$2,080,000 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.

<page>

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 deliver
the two aircraft for which it has signed re-lease term sheets and 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 and increased
geopolitical tensions. More recently, fears surrounding Severe Acute Respiratory
Syndrome ("SARS") have caused a reduction in airline passenger loads,
particularly in markets where the outbreak is concentrated. As a result, there
has been a severe reduction in air travel and less demand for aircraft capacity
by the major air carriers. The duration of the downturn is uncertain. 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 six months 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.

As the maturity date of the Bonds nears, the Company may seek to refinance the
Bonds using bank financing. The proceeds of such financing would be used to
repay all or part of the outstanding indebtedness of the Bonds, depending on the
appraised value of the aircraft and the amount of the financing that the Company
is able to obtain. The Company believes that refinancing its current
indebtedness may offer the best option because it would enable the Company to
repay its Bondholders, while not being forced to sell the Company's assets
during the current industry downturn.

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 six months 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.

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.

Ownership Risks. Two of the Company's aircraft are 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 six months from now,
factors that could affect the short-to-medium term value of the aircraft are
crucial 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.

<page>

Portfolio Management. As leases on the Company's aircraft expire in the coming
months, the Company will need to make strategic decisions regarding the sale or
re-lease of the aircraft. As to each aircraft, as a lease expires, the Company
will need to decide whether to renew the lease with the current lessee (if
requested by lessee), attempt to find a new lessee, and/or sell the aircraft. If
the aircraft are re-leased in the coming months, this would contribute to the
revenue deposited into the sinking fund for repayment of the Bonds. However, the
re-lease of the aircraft could affect the value of the aircraft if the Company
subsequently sold the aircraft subject to the lease. That impact will depend on
the types of aircraft buyers in the market at the time the aircraft is sold. On
the one hand, the lease could have a positive impact on the value of the
aircraft (relative to the value of the aircraft unencumbered by a lease) by
those buyers seeking a revenue bearing investment. On the other hand, buyers
seeking to operate the aircraft would desire an aircraft that is available for
use immediately and not subject to a current lease. A further factor that will
be considered is the current industry state and the likelihood that a
mid-to-long term lease entered into during this downturn will likely be at a
lease rate that would turn into a below-market lease rate once the industry
recovers.

The Company will need to take all of these factors, as well as the timing of the
Bond repayment into consideration as it manages its portfolio during the coming
months in its effort maximize its ability to repay the Bonds. A critical factor
in making these decisions will be to locate refinancing debt, the proceeds of
which will be used to pay off the Bondholder debt. In doing so, management of
the Company will need to draw on its industry experience and make business
judgments about the recovery from the downturn, future market needs and
conditions, aircraft values, and the best timing for sale and/or re-lease of its
portfolio. These factors, however, cannot be predicted with certainty.

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 used 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.

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. JMC is also management company for
two other aircraft portfolio owners, AeroCentury Corp. and AeroCentury IV, Inc.
("AeroCentury IV") and conflicts may arise as a result of those roles. For
instance, AeroCentury Corp. and the Company have common customers, and the
management Company's decisions with respect to such shared customers may create
a conflict when negotiating with the customer with respect to re-leasing of the
respective aircraft owned by the Company and AeroCentury Corp. AeroCentury IV is
in the liquidation or wrap-up phase. In the first quarter of 2002, AeroCentury
IV defaulted on certain obligations to noteholders. The indenture trustee for
AeroCentury IV's noteholders has foreclosed and 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

Quarterly evaluation of the Company's Disclosure Controls and Internal Controls.
Within the 90 days prior to the date of this quarterly report on Form 10-QSB,
the Company evaluated the effectiveness of the design and operation of its
"disclosure controls and procedures" ("Disclosure Controls"), and its "internal
controls and procedures for 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 Annual 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. Appearing immediately following the Signatures
section of this annual report there 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 annual 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 (Exchange Act), such as this annual 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 annual
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 items 5 and 6 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 Annual 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, since the date
of the Controls Evaluation to the date of this report, there have been no
significant changes in Internal Controls or in other factors that could
significantly affect Internal Controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.

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

         99.1*         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:    May 15, 2003                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:  May 15, 2003                                /s/ Neal D. Crispin
                                               ---------------------------------
                                            Neal D. Crispin
                                            President, Chief Financial Officer