<PAGE>          1


                                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  September  30,  1996

                                      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  November  14,  1996,  500,000 shares of common stock and 145,665 shares of
preferred  stock  were  outstanding.

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


<PAGE>
<TABLE>

<CAPTION>

PART  I.          FINANCIAL  INFORMATION
ITEM  1.          FINANCIAL  STATEMENTS

                                  JETFLEET III
                                 Balance Sheets

                                     ASSETS

                                     September  30,          December  31,
                                          1996                   1995
                                      (Unaudited)


<S>                                          <C>          <C>       

Current assets:
Cash                                         $  230,754   $   68,328 
Accounts receivable                                   -        1,132 
                                             ----------   ----------       
Total current assets                            230,754       69,460 
Aircraft under operating lease, net of
accumulated depreciation of $486,898
in 1996 and $47,090 in 1995                   4,407,667    4,477,120 
Debt issue costs, net of accumulated
amortization of $80,097 in 1996
and $4,881 in 1995                            1,009,688      510,304 
Secured notes receivable                      2,361,635            - 
Other, including deferred taxes,
net of valuation allowance                      184,736            - 
                                             ----------   ----------

                                             $8,194,480   $5,056,884
                                             ==========   ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable - trade                     $      285   $    7,226 
Payable - aircraft                                    -    2,901,733 
Payable to affiliates                                71      223,448 
Interest payable                                138,833        9,757 
Maintenance reserve                               9,533            - 
Prepaid rent                                          -       18,546 
                                             ----------   ----------  
Total current liabilities                       148,722    3,160,710 
Medium-term secured bonds                     7,072,850    1,326,850 
                                             ----------   ----------            
Total liabilities                             7,221,572    4,487,560 
                                             ----------   ----------

Preferred stock, no par value,
300,000 shares authorized, 124,815
shares issued and outstanding in 1996
and 23,415 in 1995                            1,055,835      143,235 
Common stock, no par value,
1,000,000 shares authorized, 500,000 shares
issued and outstanding in 1996 and 1995         500,000      500,000 
Accumulated deficit                           ( 582,927)    ( 73,911)
                                             -----------  -----------          
Total shareholders' equity                      972,908      569,324 
                                             -----------  -----------          
                                              $8,194,480   $5,056,884
                                             ===========  ==========
<FN>

See  accompanying  notes.
</TABLE>



<PAGE>
<TABLE>

<CAPTION>



                                   JETFLEET III
                             Statements of Operations
                                    (Unaudited)

                      For  the          For  the  period           For  the
                   Nine  Months          from  Inception         Three  Months
                       Ended           (August  23,  1994)          Ended
                  September  30,       to  September  30,       September  30,
                        1996           1995          1996            1995

Revenues:


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

Rent income, net
 of finance charges   $  435,427     $      -       $  194,250   $      - 
Interest income           52,133        1,277           47,714        285 
                     -----------    ---------      -----------  ---------
                         487,560        1,277          241,964        285 

Expenses:

Depreciation expense     439,808            -          152,966          - 
Amortization expense      75,216            -           32,292          - 
Interest expense         381,743            -          197,929          - 
Professional fees         19,499        9,620            5,239      5,650 
Management fees           70,909            -           33,045          - 
General and
  administrative           9,401          850            4,919          5 
                     -----------    ---------      -----------  ---------
                         996,576       10,470          426,390      5,655 
                     -----------    ---------      -----------  ---------
Net loss              $( 509,016)    $( 9,193)      $( 184,426)  $( 5,370)
                     ===========    =========      ===========  =========

Weighted average
  common shares          500,000      117,946          500,000    348,370 
                     ===========    =========      ===========  =========

Loss per
  common share       $    ( 1.02)   $  ( 0.08)     $    ( 0.37) $  ( 0.02)
                     ===========    =========      ===========  =========



















<FN>

See  accompanying  notes.
</TABLE>



<PAGE>

<TABLE>

<CAPTION>

                                 JETFLEET III
                           Statements of Cash Flows
                                 (Unaudited)

                                        For  the          For  the  period
                                      Nine  Months         from  Inception
                                          Ended          (August  23,  1994)
                                     September  30,        to September 30,
                                          1996                  1995


<S>                                             <C>            <C>

Net cash used in operating activities           $  ( 287,851)  $( 458,693)

Investing activities -
  Purchase of interests in an aircraft           ( 3,272,088)           - 
  Loans secured by aircraft                      ( 2,361,635)           - 
                                                -------------  -----------
      Net cash used in investing activities      ( 5,633,723)           - 

Financing activities:
  Proceeds from issuance of medium-term
    secured bonds                                  5,746,000            - 
  Debt issue costs                                 ( 574,600)           - 
  Proceeds from issuance of preferred stock        1,014,000            - 
  Offering costs                                   ( 101,400)           - 
  Proceeds from issuance of common stock                   -      500,000 
                                                -------------  -----------
     Net cash provided by financing activities     6,084,000      500,000 
                                                -------------  -----------

Net increase in cash                                 162,426       41,307 

Cash, beginning of period                             68,328            - 
                                                -------------  -----------

Cash, end of period                             $    230,754   $   41,307 
                                                =============  ===========





















<FN>

See  accompanying  notes.
</TABLE>



<PAGE>


                                 JETFLEET III
                        Notes to Financial Statements
                              September 30, 1996
                                 (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 common
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.  ("JetFleet  II  "), publicly offered limited partnership
programs with objectives similar to the Company's.  The accompanying unaudited
financial  statements  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,  1995.

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.

     The Company received Securities and Exchange Commission ("SEC") clearance
on  February  3,  1995  for  a  public offering of up to $20,000,000 in $1,000
Series  A  Units (the "Offering") consisting of an $850 bond maturing on March
1,  2003  and  $150 of preferred stock.  Because the structure of the Offering
was  somewhat  different  than  traditional  bond  offerings,  the  Company
experienced  a  delay  in obtaining clearance from the securities divisions of
some  key states.  As a result, the Offering was restructured, and the Company
received  SEC  clearance on September 27, 1995 for the restructured offering. 
In  the  restructured  offering,  the Company is offering up to $20,000,000 in
$1,000  Series A Units consisting of an $850 bond maturing on November 1, 2003
(the  "Bonds") and $150 of preferred stock (the "Preferred Stock").  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  will be 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.

<PAGE>


                                 JETFLEET III
                        Notes to Financial Statements
                              September 30, 1996
                                 (Unaudited)

2.          Organization  and  Capitalization  (continued)

     JMC has incurred certain costs in connection with the organization of the
Company  and  the  Offering.    The  Company pays an Organization and Offering
Expense  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 has
contributed  $450,000  of  the total it estimates it will pay for organization
and  offering  expenses  as a common stock investment in the Company.  On July
28,  1995,  the  shareholders of the Company unanimously consented to adopt an
amendment  and  restatement of the articles of incorporation of the Company to
increase  the  number  of  authorized  shares  of common stock from 300,000 to
1,000,000.    On  August  1, 1995, the Company issued 450,000 shares of common
stock  to  JMC  in return for the contribution of $450,000 of organization and
offering  costs  related  to  the organization of the Company and the Offering
that  it  has  paid on behalf of the Company.  JMC is also entitled to receive
common  stock  in  the  amount  of  any unreimbursed organization and offering
costs.    The  Company  has  capitalized, and will continue to capitalize, the
portion  of  the  Reimbursement  related  to the Bonds (85%) and amortize such
costs  over  the  life of the Bonds (approximately 8 years).  The remainder of
any  such  Reimbursement  has been deducted, and will continue to be deducted,
from  shareholders'  equity.

3.          Aircraft  Under  Operating  Lease

     deHavilland  Dash-8

     On  November  30,  1995,  the  Company  purchased  a  100%  interest in a
deHavilland  DHC-8-100  Model  102  aircraft, serial number 13 ("S/N 13") from
Bombardier,  as  agent for deHavilland, for $4,200,000 (the "Purchase Price"),
payable  in monthly installments as the Company raised funds in the Offering. 
The final monthly installment payment for S/N 13 was made on June 4, 1996.  In
connection  with  the acquisition, the Company paid a fee equal to 7.5% of the
Purchase  Price  ($315,000)  to  JMC  (the  "S/N  13  Fee").  The Company also
reimbursed  JMC  for  approximately $17,399 in Chargeable Acquisition Expenses
related  to the purchase which had been paid by JMC to third parties (the "S/N
13  Costs").    During 1995, the Company paid to JMC a total of $97,406 of the
S/N  13  Fee  and reimbursed JMC for $9,210 of the S/N 13 Costs.  During 1996,
the  Company  paid  to  JMC  the  balance  of  $217,594  of the S/N 13 Fee and
reimbursed  JMC  for  $8,189  of  the  S/N  13  Costs.

     Immediately  subsequent  to the purchase of S/N 13 by the Company, S/N 13
was  leased  back  to Bombardier for a term of 120 months at a monthly rate of
$60,000  (the  "S/N  13 Lease").  The S/N 13 Lease may be terminated by either
party,  with at least 120 days prior written notice, after the first 36 months
of the lease.  The aircraft is subleased by Bombardier to Air Affaires Afrique
("AAA"),  a schedule and charter airline operating under Cameroon registration
and  French  Civil Aviation Authority regulations.  During the period that the
Company  made  installment  payments  for  the  purchase of S/N 13, Bombardier
retained  a  security  interest in the aircraft.  Monthly finance charges were
paid  to  Bombardier in the form of the pro-rata rent earned on the portion of
the Purchase Price remaining to be paid to Bombardier.  The Company received a
total  of $480,000 in rent under the S/N 13 Lease during the first nine months
of  1996.

<PAGE>


                                 JETFLEET III
                        Notes to Financial Statements
                              September 30, 1996
                                 (Unaudited)

3.          Aircraft  Under  Operating  Lease  (continued)

     Fairchild  Metro  II

     On  June  4,  1996,  the  Company purchased a 50% undivided interest in a
Fairchild SA226-TC aircraft, serial number TC-370, for $335,567 ("S/N TC-370")
from  CMA  Capital Management, Inc. ("CMACM"), an affiliate of JMC.  CMACM had
purchased the interest in February 1996 from Air Metro III, Inc. ("Air Metro")
for  the  express  purpose  of  reselling its interest to the Company when the
necessary funds had been raised.  JetFleet II  owns the remaining 50% interest
which  it  purchased  at the same time that CMACM purchased its interest.  The
purchase  price paid by the Company is the same price paid by CMACM ($341,750)
reduced  by  the net rent received by CMACM during the period the aircraft was
held  for  resale  ($6,183).   The Company reimbursed CMACM and JMC $4,533 and
$1,561,  respectively,  for  third party costs incurred in connection with the
acquisition  of  the  interest  in  the  S/N  TC-370.  The Company also paid a
brokerage fee of $20,505 to JMC. S/N TC-370 is subject to a lease with Sunbird
Air Services, Ltd. for a term expiring September 30, 2000 at a monthly rate of
$9,500, of which the Company is entitled to $4,750 (the "Sunbird Lease").  The
Sunbird Lease contains a guaranty by Air Metro 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 "Sunbird Guaranty").  As part of
the  purchase  of  S/N  TC-370  from  CMACM,  CMACM assigned its interests and
obligations  under  the Sunbird Lease and the Sunbird Guaranty to the Company.

4.          Secured  Notes  Receivable

     On  July  2,  1996,  the Company loaned $800,000 to Aloha IslandAir, Inc.
("Aloha"),  secured  by  a  100%  undivided  interest  in  the  first of three
deHavilland  DHC-6-300  aircraft.    In  connection with this transaction, the
Company  paid  JMC  $58,091  in  brokerage fees, and reimbursed JMC $5,560 for
third  party costs incurred in arranging the loan.  The Security Agreement for
the  aircraft, DHC-6-300 Serial No. 640, contains an option for the Company to
purchase  the  aircraft  and  subsequently  lease  it  back  to  Aloha.

     On August 2, 1996, the Company loaned $800,000 to Aloha for the second of
three  aircraft,  DHC-6-300  Serial  No. 751 ("S/N 751"), mentioned above.  In
connection  with  this  transaction, the Company paid JMC $39,020 in brokerage
fees and reimbursed JMC $3,735 for third party costs incurred in arranging the
loan.   In connection with the loan to Aloha for S/N 751, the Company borrowed
$225,000  from  JMC,  which  was  repaid  as  additional proceeds were raised.

     On September 16, 1996, the Company loaned $800,000 to Aloha for the third
of  three  aircraft, DHC-6-300 Serial No. 696, mentioned above.  In connection
with  this  transaction,  the  Company  paid JMC $71,487 in brokerage fees and
reimbursed  JMC  $6,843  for third party costs incurred in arranging the loan.

<PAGE>


                                 JETFLEET III
                        Notes to Financial Statements
                              September 30, 1996
                                 (Unaudited)

5.          Medium-term  secured  bonds

     As  mentioned  above,  the Company is currently raising funds through the
Offering.    Each  $1,000  Unit  subscribed  in  the offering includes an $850
medium-term  secured bond maturing on November 1, 2003.  During November 1995,
the  Company  reached the $500,000 minimum amount required to be raised in the
Offering.    Through December 31, 1995, the Company accepted subscriptions for
1,561  Units  aggregating  $1,561,000  in  Gross  Offering  Proceeds  from 100
Unitholders,  and,  pursuant to the Prospectus, subsequently issued $1,326,850
in  Bonds  and  23,415 shares of Preferred Stock.During the nine months ended
September  30,  1996,  the  Company  accepted  subscriptions  for  6,760 Units
aggregating  $6,760,000  in Gross Offering Proceeds from 430 Unitholders, and,
pursuant  to  the  Prospectus,  subsequently  issued  $5,746,000  in Bonds and
101,400  shares  of Preferred Stock.The Bonds bear interest at an annual rate
of  12.94%  which  is due and payable on a quarterly basis, in arrears, on the
first  business  day  of  February,  May  and  August  and November each year.

6.          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 nine months
of  1996, the Company accrued and paid to JMC a total of $70,909 in management
fees.

     Capital  Management  Associates  ("CMA"),  an  affiliate of JMC, provides
certain  administrative  services  to  the  Company.    The  Company  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  may  receive  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.  The total
of  the Aggregate Purchase Price plus the brokerage fee cannot exceed the fair
market value of the asset based on appraisal.  During the first nine months of
1996,  the  Company  paid  JMC  a  total  of  $406,697  in  brokerage fees and
reimbursed  JMC  for  $25,788  in  Chargeable  Acquisition  Expenses.

     As  discussed  in  Note  3,  the  Company  purchased a Fairchild Metro II
aircraft  from  CMACM  during  the  second  quarter  of  1996.  As part of the
purchase,  the  Company  reimbursed  CMACM  $4,533  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  nine  months  of  1996,  the  Company  paid  $135,200  to JMC.

<PAGE>


                                 JETFLEET III
                        Notes to Financial Statements
                              September 30, 1996
                                 (Unaudited)

7.          Subsequent  Events

     On  October  2,  1996, October 17, 1996 and November 4, 1996, the Company
accepted  subscriptions  for 491, 324 and 575 Units, respectively, aggregating
$491,000,  $324,000  and  $575,000,  respectively,  from  a  total  of  108
Unitholders.   On November 6, 1996, a portion of the net proceeds were used to
purchase  a  Pratt  & Whitney JT8D-9A engine Serial No. P-674267B for $675,000
(the  "Engine")  from Interglobal, Inc. ("Interglobal").  The Engine is leased
back to Interglobal for sixty months at a monthly rate of $13,000.  The Engine
is sub-leased to and is being operated by Aero California S.A. de CV.  As part
of  the  purchase  of  the  Engine, Interglobal assigned its rights under this
sublease  to  the  Company.

     In  addition  to  the purchase price, the Company paid a brokerage fee of
$41,239  to  JMC  and  reimbursed  JMC  $5,134  for  third  party  costs.

     After  the purchase of the Engine, approximately $540,000 in net proceeds
are  available  for  investment  in  additional  assets.


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

Capital  Resources  and  Liquidity

       At the end of the third quarter of 1996, the Company had cash balances
of  $230,754.    This  amount  was  held  for the interest payment made to the
Unitholders  in  November  1996  and  for  normally  recurring  expenses.

     Since Inception, the Company's source of capital has been in the form of
an  initial  contribution  from JMC, proceeds from the Offering and net rental
revenue  from the Income Producing Assets 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.

     Cash  flow  from  operations  was  ($287,851) and ($458,693) for the nine
months  ended September 30, 1996 and for the period from Inception (August 23,
1994)  to  September  30,  1995,  respectively.    There  were  no significant
operations  in  1995  until  the  fourth  quarter.

Results  of  Operations

     The  Company  recorded  a net loss of ($509,016) and ($9,193)  or ($1.02)
and ($0.08) per share for the nine months ended September 30, 1996 and for the
period  from  Inception (August 23, 1994) to September 30, 1995, respectively,
and a net loss of ($184,426) and ($5,370) or ($0.37) and ($0.02) per share for
the  three  months ended September 30, 1996 and 1995.  As mentioned above, the
Company did not have significant operations until the fourth quarter of 1995. 
As  a  result  of  the Company raising funds in the Offering, beginning in the
fourth  quarter  of  1995, the Company incurred considerably greater operating
expenses, primarily depreciation and interest expense, in 1996.  This increase
in expenses was only partially offset by the receipt of rental income received
from  the  leases  on  the  assets  purchased.

<PAGE>
                                 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  November  14,  1996.

     JETFLEET  III



     By:          /s/  Neal  D.  Crispin
                 Neal  D.  Crispin
                 Title:    President

     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
November  14,  1996.
<TABLE>

<CAPTION>

     Signature          Title

<S>                      <C>

/s/ Neal D. Crispin      President and Chairman of the
-------------------                               
Neal D. Crispin          Board of Directors of the Registrant





/s/ Toni M. Perazzo      Vice President-Finance and Director
-------------------                               
Toni M. Perazzo          of the Registrant

</TABLE>




























<PAGE>          12

                                    EXHIBIT  INDEX

Exhibit  No.                        Description                       Page No.
-----------                         -----------                       --------
EX-27                          Financial Data Schedule