UNITED STATES
                                      
                     SECURITIES AND EXCHANGE COMMISSION
                                      
                           WASHINGTON, D.C. 20549
                                      
                                FORM 10-K/A2
                                      

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                   OF 1934

                      For the Year Ended June 30, 1997

                        Commission File Number 1-6560


                                  THE FAIRCHILD CORPORATION
           (Exact name of Registrant as specified in its charter)
                                      
Delaware                                              34-0728587
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
Incorporation or organization)

45025 Aviation Drive, Suite 400
Dulles, VA                                           20166
(Address of principal executive offices)          (Zip Code)
          
Registrant's telephone number, including area code          (703)478-5800
                                      
Securities registered pursuant to Section 12(b) of the Act:
          
Title of each class                  Name of exchange on which registered
          
Class A Common Stock, par value
    $.10 per share                    New York and Pacific Stock Exchange
13 1/8% Subordinated Debentures
     due 2006                         New York Stock Exchange
12%  Intermediate Subordinated
     Debentures due  2001             New York Stock Exchange
          
13% Junior Subordinated Debentures
     due 2007                         New York Stock Exchange
          
          
Securities registered pursuant to Section 12(g) of the Act:   None
          
      Indicate by check mark whether the Registrant (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
such filing requirements for the past ninety (90) days [X].

      Indicate  by check mark if disclosure of delinquent filers pursuant  to
Item  405  of  Regulation  S-K  is not contained  herein,  and  will  not  be
contained,  to  the  best of registrant's knowledge, in definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K [  ].

      As  of  March 2, 1998, the aggregate market value of the common  shares
(based upon the closing price of these shares on the New York Stock exchange)
of  the  Registrant  held by nonaffiliates was approximately  $295.2  million
(excluding  shares deemed beneficially owned by affiliates of the  Registrant
under Commission Rules).

      As  of  March 2, 1998, the number of shares outstanding of each of  the
Registrant's classes of common stock were as follows:

    Class A common stock, $.10 par value               18,150,227

    Class B common stock, $.10 par value                 2,624,716



AMENDMENT:

  The  purpose of this amendment is to provide restated financial information
and  additional  disclosure for (i) Item 6, "Selected Financial  Data",  (ii)
Item  7,  "Management's Discussion and Analysis of Results of Operations  and
Financial  Condition", (iii) Item 8, "Financial Statements and  Supplementary
Data", and (iv) Item 14, "Exhibits, Financial Statement Schedules and Reports
on  Form  8-K",  as a result of the Company's adoption of a  formal  plan  to
discontinue Fairchild Technologies in February 1998.

                          THE FAIRCHILD CORPORATION
                                  INDEX TO
                        ANNUAL REPORT ON FORM 10-K/A2
                     FOR FISCAL YEAR ENDED JUNE 30, 1997



PART  II                                                              Page

Item 6. Selected Financial Data                                         4

Item 7. Management's Discussion and Analysis of Results of Operations
        and Financial Condition                                         5

Item 8. Financial Statements and Supplementary Data                    15

Item 14. Exhibits, Financial Statement Schedules and Reports on Form
         8-K                                                           51


<TABLE>
ITEM 6.  SELECTED FINANCIAL DATA

Five-Year Financial Summary
(In thousands, except per share data)
<CAPTION>

                                   
                                          For the years ended June 30,
                                 1993      1994     1995      1996      1997
<S>                           <C>        <C>       <C>       <C>       <C>
Summary of Operations:                                        
 Net sales                     $247,080  $203,456  $220,351  $349,236  $680,763
 Gross profit                    42,609    28,415    26,491    74,101   181,344
 Operating income (loss)        (29,595)  (46,845)  (30,333)  (11,286)   33,499
 Net interest expense            67,162    66,670    64,113    56,459    47,681
 Earnings (loss) from                                           
continuing operations           (62,413)    4,834   (56,280)  (32,186)    1,816 
 Earnings (loss) per share from                                 
continuing
   Operations:
      Basic                     $ (3.87)  $  0.30   $ (3.49)  $ (1.98)  $  0.11
      Diluted                     (3.87)     0.30     (3.49)    (1.98)     0.11
                                                                
 Other Data:                                                    
 EBITDA                           5,739    (7,471)   (9,830)   12,078    57,806
 EBITDA Margin                    2.3%       N.M       N.M        3.5%     8.5%
 Cash used for operating
  activities                    (21,120)   (33,271)  (25,041)  (48,951)(100,058)
 Cash provided by (used for)                                    
investing activities             (9,290)   166,068   (19,156)   57,540   79,975
 Cash provided by (used for)                      
financing activities             57,431   (101,390)   12,345   (39,637)  (1,455
                                                                
 Balance Sheet Data:                                            
 Total assets                   941,675    860,943    828,680  993,398 1,052,666
 Long-term debt, less current                                   
maturities                      566,491    518,718    508,225  368,589   416,922
 Redeemable preferred stock of   17,732     17,552     16,342     --        --
subsidiary
 Stockholders' equity            53,754     69,494     39,378  230,861   232,424
     per outstanding common 
       share                   $   3.34   $   4.32    $  2.50 $  14.10  $ 13.81
</TABLE>

      The results of Banner Aerospace, Inc. are included in the periods since
February 25, 1996, when Banner became a majority-owned subsidiary.  Prior  to
February 25, 1996, the Company's investment in Banner was accounted for using
the  equity  method.  Fiscal 1994 includes the gain on the  sale  of  Rexnord
Corporation stock.  These transactions materially affect the comparability of
the information reflected in the selected financial data.

ITEM 7.  MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                FINANCIAL CONDITION

      The  Fairchild Corporation (the "Company") was incorporated in  October
1969,  under  the laws of the State of Delaware.  On November 15,  1990,  the
Company  changed  its  name from Banner Industries,  Inc.  to  The  Fairchild
Corporation.   RHI  Holdings,  Inc. ("RHI") is a  direct  subsidiary  of  the
Company.  RHI is the owner of 100% of Fairchild Holding Corp. ("FHC") and the
majority owner of Banner Aerospace, Inc. ("Banner").  The Company's principal
operations are conducted through RHI and FHC. The Company holds a significant
equity  interest  in Nacanco Paketleme ("Nacanco"), and,  during  the  period
covered  by  this  report,  held  a significant  equity  interest  in  Shared
Technologies  Fairchild Inc. ("STFI").  (See Item 8,  Note  24  to  Financial
Statements,  Subsequent  Events,  as to  the  disposition  of  the  Company's
interest in STFI.)

GENERAL

     The Company is the largest aerospace fastener manufacturer and is one of
the  largest  independent aerospace parts distributors in the world.  Through
internal growth and strategic acquisitions, the Company has become one of the
leading  aircraft parts suppliers to aircraft manufacturers such  as  Boeing,
Airbus,  Lockheed Martin, British Aerospace and Bombardier  and  to  airlines
such as Delta Airlines and US Airways.

      The  Company's primary business focus is on the aerospace industry  and
its   business   consists  primarily  of  two  aerospace  segments--aerospace
fasteners and aerospace parts distribution. The aerospace fasteners  segment,
which  accounted for approximately 51.4% of the Company's net sales in Fiscal
1997,  pro  forma  for  the Disposition, manufactures and  markets  fastening
systems  used in the manufacturing and maintenance of commercial and military
aircraft.   The   aerospace  distribution  segment,   which   accounted   for
approximately 35.9% of the Company's net sales in Fiscal 1997, pro forma  for
the  Disposition, stocks and distributes a wide variety of aircraft parts  to
commercial airlines and air cargo carriers, OEMs, other distributors,  fixed-
base  operators,  corporate aircraft operators and other aerospace  and  non-
aerospace  companies.  The  Company's  aerospace  distribution  business   is
conducted through its 66% owned subsidiary, Banner.

CAUTIONARY STATEMENT

       Certain  statements  in  the  financial  discussion  and  analysis  by
management  contain  forward-looking  information  that  involves  risk   and
uncertainty, including current trend information, projections for deliveries,
backlog,  and  other  trend projections.  Actual future  results  may  differ
materially  depending  on  a  variety of factors, including  product  demand;
performance   issues   with   key  suppliers;   customer   satisfaction   and
qualification  issues;  labor  disputes;  governmental  export   and   import
policies;  worldwide  political  stability and  economic  growth;  and  legal
proceedings.

RECENT DEVELOPMENTS AND SIGNIFICANT BUSINESS COMBINATIONS

      The  Company  has  effected a series of transactions designed  to:  (i)
reduce its total indebtedness and annual interest expense; (ii) increase  the
number  of  publicly held shares of Class A Common Stock; and (iii)  increase
the Company's operating and financial flexibility.

      On  November 20, 1997, Shared Technologies Fairchild Inc.  ("STFI"),  a
corporation  of which the Company owned approximately 42% of the  outstanding
common stock, executed a Merger Agreement with Intermedia Communications Inc.
("Intermedia"), pursuant to which holders of STFI common stock would  receive
$15.00  per  share in cash (the "STFI Merger"). On March 10, 1998,  the  STFI
Merger  was  consummated. In the quarter ended December 28, 1997 the  Company
was  paid approximately $85,000 in cash (before tax and selling expenses)  in
exchange  for  preferred  stock of STFI owned by the  Company.   The  Company
received  an additional $93,000 in cash (before tax and selling expenses)  in
the  third  quarter of Fiscal 1998, in exchange for the 6,225,000  shares  of
common stock of STFI owned by the Company.

      On  December  19, 1997, the Company completed a secondary  offering  of
public securities.  The offering consisted of an issuance of 3,000,000 shares
of the Company's Class A Common Stock at $20.00 per share (the "Offering").

      On  December 19, 1997, immediately following the Offering, the  Company
restructured its FHC and RHI Credit Agreements by entering into a new six-and-
a-half-year credit facility to provide the Company with a $300 million senior
secured  credit  facility (the "Facility") consisting of (i)  a  $75  million
revolving loan with a letter of credit sub-facility of $30 million and a  $10
million swing loan sub-facility, and (ii) a $225 million term loan.

      On  January  13,  1998, certain subsidiaries of  Banner  (the  "Selling
Subsidiaries") completed the disposition of substantially all of  the  assets
and  certain  liabilities  of the Selling Subsidiaries  to  two  wholly-owned
subsidiaries   of   AlliedSignal  Inc.  (the  "Buyers"),  in   exchange   for
unregistered shares of AlliedSignal Inc. common stock with an aggregate value
equal to $369 million (the "Banner Hardware Group Disposition"). The purchase
price received by the Selling Subsidiaries was based on the consolidated  net
worth  as reflected on an estimated closing date balance sheet for the assets
(and  liabilities) conveyed by the Selling Subsidiaries to the Buyers.   Such
estimated closing date balance sheet is subject to review by the parties, and
the  purchase price will be adjusted (up or down) based on the net  worth  as
reflected on the final Closing Date Balance Sheet. The assets transferred  to
the  Buyers consists primarily of Banner's hardware group, which includes the
distribution  of  bearings, nuts, bolts, screws, rivets  and  other  type  of
fasteners,  and its PacAero Unit. Approximately $196 million  of  the  common
stock  received from the Buyers was used to repay outstanding term  loans  of
Banner's  subsidiaries and related fees. Banner effected the Banner  Hardware
Group  Disposition to concentrate its efforts on the rotables and jet  engine
businesses  and  because  the Banner Hardware Group Disposition  presented  a
unique opportunity to realize a significant return on the disposition of  the
hardware group.

      On March 2, 1998, the Company consummated the acquisition of Special-T,
from  the  stockholders of Special-T, pursuant to an agreement  and  plan  of
merger dated as of January 28, 1998 as amended on February 20, 1998 and March
2,  1998. The purchase price for the acquisition was $46.5 million, of  which
$23.5  million was paid in shares of Class A Common Stock of the Company  and
the remainder was paid in cash. The purchase price is subject to certain post-
closing adjustments. Special-T is a distributor of aerospace fasteners.

      On  February  3,  1998, with the proceeds of the  Offering,  term  loan
borrowings  under the Facility, and the after tax proceeds  the  Company  has
already received from the STFI Merger (collectively, the "Refinancing"),  the
Company refinanced substantially all of its existing indebtedness (other than
indebtedness  of Banner), consisting of (i) $63.0 million to  redeem  the  11
7/8%  Senior  Debentures  due 1999; (ii) $117.6 million  to  redeem  the  12%
Intermediate Debentures due 2001; (iii) $35.9 million to redeem the  13  1/8%
Subordinated Debentures due 2006; (iv) $25.1 million to redeem the 13% Junior
Subordinated Debentures due 2007; and (vi) accrued interest of $10.6 million.

      On November 28, 1997, the Company acquired AS+C GmbH, Aviation Supply +
Consulting  ("AS&C") in a business combination accounted for as  a  purchase.
The  total cost of the acquisition was $13,245, which exceeded the fair value
of  the  net  assets of AS&C by approximately $7,350, which is  preliminarily
being allocated as goodwill and amortized using the straight-line method over
40 years. The Company purchased AS&C with cash borrowed. AS&C is an aerospace
parts,  logistics, and distribution company primarily servicing the  European
OEM market.

     Fiscal 1997 Transactions

     In January 1997, Banner, through its subsidiary, Dallas Aerospace, Inc.,
acquired  PB  Herndon  Company  ("PB  Herndon")  in  a  business  combination
accounted  for  as  a  purchase.  PB Herndon is a  distributor  of  specialty
fastener lines and similar aerospace related components.  The total  cost  of
the  acquisition was $16.0 million, which exceeded the fair value of the  net
assets  of  PB  Herndon by approximately $3.5 million.  The excess  is  being
amortized using the straight-line method over 40 years.

      In  February  1997, the Company completed a transaction (the  "Simmonds
Acquisition")  pursuant  to  which the Company  acquired  common  shares  and
convertible debt representing an 84.2% interest, on a fully diluted basis, of
Simmonds S.A. ("Simmonds").  The Company initiated a tender offer to purchase
the remaining shares and convertible debt held by the public.  By Fiscal year-
end,  the  Company  had purchased, or placed sufficient  cash  in  escrow  to
purchase,  all  the remaining shares and convertible debt of  Simmonds.   The
total  purchase  price  of Simmonds, including the assumption  of  debt,  was
approximately  $62.0 million, which the Company funded with  available  cash.
The  Company recorded approximately $13.0 million in goodwill as a result  of
this  acquisition.   Simmonds is one of Europe's  leading  manufacturers  and
distributors of aerospace and automotive fasteners.

      On  June  30,  1997,  the  Company sold all the  patents  of  Fairchild
Scandinavian   Bellyloading   Company  ("SBC")   to   Teleflex   Incorporated
("Teleflex") for $5.0 million, and immediately thereafter sold all the  stock
of SBC to a wholly-owned subsidiary of Teleflex for $2.0 million. The Company
may  also receive an additional amount of up to $7.0 million based on  future
net  sales of the patented products and services. In Fiscal 1997, the Company
recorded a $2.5 million nonrecurring gain as a result of these transactions.

     Fiscal 1996 Transactions

      The  Company, RHI and Fairchild Industries, Inc. ("FII"), the Company's
former subsidiary, entered into an Agreement and Plan of Merger dated  as  of
November   9,   1995  (as  amended,  the  "Merger  Agreement")  with   Shared
Technologies Inc. ("STI").  On March 13, 1996, in accordance with the  Merger
Agreement,  STI  succeeded  to the telecommunications  systems  and  services
business operated by the Company's Fairchild Communications Services  Company
("FCSC"). The transaction was effected by a Merger of FII with and  into  STI
(the  "Merger") with the surviving company renamed STFI. Prior to the Merger,
FII transferred all of its assets to, and all of its liabilities were assumed
by  FHC, except for the assets and liabilities of FCSC, and $223.5 million of
FII's  existing  debt and preferred stock. As a result  of  the  Merger,  the
Company  received  shares  of  Common Stock  and  Preferred  Stock  of  STFI,
representing approximately a 41% ownership interest in STFI.

      On  February  22, 1996, pursuant to the Asset Purchase Agreement  dated
January  26, 1996, the Company, through its subsidiaries, completed the  sale
of  certain assets, liabilities and the business of the D-M-E Company ("DME")
to  Cincinnati  Milacron  Inc. ("CMI"), for a sales  price  of  approximately
$244.3  million, as adjusted.  The sales price consisted of $74.0 million  in
cash, and two 8% promissory notes in the aggregate principal amount of $170.3
million  (together, the "8% CMI Notes").  On July 29, 1996, CMI paid in  full
the 8% CMI Notes.

      On  January  27,  1996,  FII  completed  the  sale  of  Fairchild  Data
Corporation  ("Data")  to  SSE  Telecom,  Inc.  ("SSE")  for  book  value  of
approximately $4.4 million and 100,000 shares of SSE's common stock valued at
$9.06  per  share,  or  $.9 million, at January 26,  1996,  and  warrants  to
purchase  an  additional 50,000 shares of SSE's common stock  at  $11.09  per
share.

      Accordingly,  DME  and  Data have been accounted  for  as  discontinued
operations.  The  combined net sales of DME and Data totaled  $108.1  million
(through  January 26, 1996) and $180.8 million for Fiscal 1995. Net  earnings
from discontinued operations were $9.2 million (through January 26, 1996) and
$14.0 million for Fiscal 1995.

     Effective February 25, 1996, the Company completed the transfer of Harco
to  Banner  in  exchange  for 5,386,477 shares of Banner  common  stock.  The
exchange  has increased the Company's ownership of Banner common  stock  from
approximately 47.2% to 59.3%, resulting in the Company becoming the  majority
shareholder of Banner. Accordingly, the Company has consolidated the  results
of Banner since February 25, 1996.  In June 1997, the Company purchased $28.0
million of newly issued Series A Convertible Paid-in-Kind Preferred Stock  of
Banner.  The Company now controls 64.0% of Banner's voting stock. Banner is a
leading  international supplier to the aerospace industry as  a  distributor,
providing a wide range of aircraft parts and related support services.

RESULTS OF OPERATIONS

      The  Company  currently  reports in two  principal  business  segments:
Aerospace Fasteners and Aerospace Distribution.  The Company consolidated pre
March  13,  1996  operating results from the Communications Services  segment
and,  effective February 25, 1996, began to consolidate the operating results
of  the  Aerospace Distribution segment.  The results of Gas Springs and  SBC
are  included  in  Corporate and Other. The following table  illustrates  the
historical  sales  and operating income of the Company's operations  for  the
past three years.
<TABLE>
<CAPTION>

(In thousands)                 For the years ended June 30,
                                  1995    1996    1997
<S>                             <C>      <C>      <C>
 Sales by Segment:                               
   Aerospace Fasteners         $215,364 $218,059 $269,026
   Aerospace Distribution(a)          -  129,973  411,765
   Corporate and Other            4,987    7,046   15,185
   Eliminations (b)                   -   (5,842) (15,213)
 Total Sales                   $220,351 $349,236 $680,763
                                                 
 Operating Income (Loss) by Segment:
   Aerospace Fasteners(c)      $(11,497) $   135 $ 17,390
   Aerospace Distribution(a)          -    5,625   30,891
   Corporate and Other(b)       (18,836) (17,046) (14,782)
 Total Operating Income        $(30,333) $(11,286)$33,499

(a)  Effective February 25, 1996, the Company became the majority shareholder
  of Banner Aerospace, Inc. and, accordingly, began consolidating their results
  as of that date.

(b)   Represents intersegment sales from the Aerospace Fasteners  segment  to
  the Aerospace Distribution segment.

(c) Includes restructuring charges of $2.3 million in Fiscal 1996.
</TABLE>

      The following unaudited pro forma table illustrates sales and operating
income  of the Company's operations by segment, on a pro forma basis,  as  if
the  Company  had  operated in a consistent manner for the past  three  years
ended  June 30, 1995, 1996 and 1997. The pro forma results are based  on  the
historical  financial  statements of the Company and  Banner  as  though  the
Banner  Hardware Group Disposition and consolidation of Banner  had  been  in
effect  since the beginning of each period. The pro forma information is  not
necessarily indicative of the results of operations that would actually  have
occurred if the transactions had been in effect since the beginning  of  each
period, nor is it necessarily indicative of future results of the Company.
<TABLE>
<CAPTION>

                             For the years ended June 30,
 Sales by Segment:              1995    1996    1997
<S>                           <C>      <C>      <C>
   Aerospace Fasteners        $190,287 $197,099 $269,026
   Aerospace Distribution(a)   108,359  153,830  187,768
   Corporate and Other           5,462    7,046   15,185
   Eliminations (b)               -        -         (29)
 Total Sales                  $304,108 $357,975 $471,950
                                                 
 Operating Income (Loss)by Segment:
   Aerospace Fasteners(c)      $(15,736) $ (2,639) $ 17,390
   Aerospace Distribution(a)     (9,995)    5,431     8,272
   Corporate and Other(b)       (16,260)  (17,047)  (14,782)
 Total Operating Income        $(41,991) $(14,255) $ 10,880

(a)   Fiscal 1997 results include sales of $27.2 million and operating income
of $1.2 million provided by Simmonds since its acquisition in February 1997.
</TABLE>

Consolidated Results

      Net  sales  of $680.8 million in Fiscal 1997 improved significantly  by
$331.5 million, or 94.9%, compared to sales of $349.2 million in Fiscal 1996.
Sales  growth was stimulated by the resurgent commercial aerospace  industry,
together with the effects of several strategic business combinations over the
past  18  months.   Net sales in Fiscal 1996 were up 58.5% from  Fiscal  1995
reflecting strong sales performances from the Aerospace Fasteners segment and
the  inclusion  of  four  months  of sales from  the  Aerospace  Distribution
segment.  On a pro forma basis, net sales increased 26.7% and 20.4% in Fiscal
1997 and 1996, respectively, as compared to the previous Fiscal periods.

      Gross  Margin as a percentage of sales was 12.0%, 21.2%, and  26.6%  in
Fiscal 1995, 1996, and 1997, respectively.  The increase in the current  year
was  attributable  to  higher revenues combined with  continued  productivity
improvements  achieved  during Fiscal 1997.   The  increase  in  Fiscal  1996
compared  to  Fiscal 1995 was due to consolidation of plants, elimination  of
product  lines, substantial downsizing and new productivity programs  put  in
place.

      Selling, General & Administrative expense as a percentage of sales  was
24.0%,  22.7%,  and 21.2% in Fiscal 1995, 1996, and 1997, respectively.   The
increase  in  the current year was attributable primarily to the increase  in
selling and marketing costs incurred to support the increase in sales.    The
decrease  in  Fiscal 1996 compared to Fiscal 1995 was due  primarily  to  the
positive results obtained from restructuring and downsizing programs  put  in
place earlier.

     Operating income of $30.3 million in Fiscal 1997 increased $44.8 million
compared to operating loss of $11.3 million in Fiscal 1996.  The increase  in
operating income was due primarily to the current year's growth in sales  and
increased operational efficiencies.  Operating income in Fiscal 1996 improved
by $19.0 million over Fiscal 1995 due primarily to improved cost efficiencies
applied  in the Aerospace Fasteners segment.  On a pro forma basis, operating
income  increased $32.5 million in Fiscal 1997, as compared to  Fiscal  1996,
and $20.4 million in Fiscal 1996, as compared to Fiscal 1995.

      Net  interest expense decreased 15.5% in Fiscal 1997 compared to Fiscal
1996,  and  decreased  11.9%  in Fiscal 1996 compared  to  Fiscal  1995.  The
decreases are due to lower borrowings as a result of the sale of DME and  the
Merger, both of which significantly reduced the Company's total debt.

      Investment income, net, was $5.7 million, $4.6 million and $6.7 million
in  Fiscal  1995, 1996, and 1997, respectively. The 45.4% increase in  Fiscal
1997  is  due  primarily to gains realized from the sale  of  investments  in
Fiscal  1997. The 19.8% decrease in Fiscal 1996 resulted from losses realized
on the write-off of two foreign investments.

      Equity in earnings of affiliates decreased $0.2 million in Fiscal 1997,
compared  to Fiscal 1996, and increased $3.2 million in Fiscal 1996, compared
to  Fiscal  1995.  The current year's decrease is attributable to  the  lower
earnings  of Nacanco. The prior year's increase was due primarily  to  higher
earnings  from  Nacanco, which improved the Company's equity in  earnings  by
$2.6 million.

      Nonrecurring income in Fiscal 1997 includes the $2.5 million gain  from
the sale of SBC.

     Income Taxes included a $5.7 million tax benefit in Fiscal 1997 on a pre-
tax  loss of $7.1 million from continuing operations. The tax benefit was due
primarily  to  reversing Federal income taxes previously provided  due  to  a
change in the estimate of the required tax accruals.  In Fiscal 1996, the tax
benefit from the loss from continuing operations was $29.8 million.

     Earnings from discontinued operations, net, include the earnings, net of
tax,  from  Fairchild Technologies in Fiscal 1995, 1996  and  1997,  STFI  in
Fiscal 1996 and 1997, and FCS, DME and Data in Fiscal 1995 and 1996.

      The  $53.6 million gain on disposal of discontinued operations resulted
primarily  from  the  sale of DME to CMI in Fiscal  1996.  Fiscal  1996  also
includes a $163.1 million nontaxable gain resulting from the Merger.

       Extraordinary  items,  net,  resulted  from  premiums  paid  for,  and
redemption  costs  and consent fees associated with, the  retirement  of  the
Senior  Notes  and the write off of deferred loan fees, related primarily  to
Senior  Notes  and  bank debt extinguished prior to maturity.   This  totaled
$10.4 million, net of a tax benefit, in Fiscal 1996.

      Net  earnings in Fiscal 1997, compared to Fiscal 1996, after  excluding
the gain on sale of discontinued operations of $163.1 million from the Merger
and  the  $53.6 million gain on sale of discontinued operations in 1996  from
the  sale  of  DME,  improved  $28.3  million,  reflecting  a  $41.6  million
improvement in operating profit. The net earnings increased $223.5 million in
Fiscal 1996, compared to Fiscal 1995, due primarily to the gain, net of  tax,
from the sale of discontinued operations.

Segment Results

Aerospace Fasteners Segment

      Sales in the Aerospace Fasteners segment increased by $51.0 million  to
$269.0  million, up 23.4% in Fiscal 1997, compared to the Fiscal 1996 period,
reflecting  significant growth in the commercial aerospace industry  combined
with  the Simmonds acquisition.  New orders have been strong in recent months
resulting  in  a backlog of $195.7 million at June 30, 1997, up  from  $109.9
million  at June 30, 1996.  Sales increased slightly in Fiscal 1996  compared
to  Fiscal  1995.  The  Harco  division  was  transferred  to  the  Aerospace
Distribution  segment  on February 25, 1996.  On a  pro  forma  basis,  sales
increased  36.5% in Fiscal 1997, compared to Fiscal 1996 and 3.6%  in  Fiscal
1996, compared to Fiscal 1995.

      Operating income improved from breakeven to $17.4 million during Fiscal
1997,  compared to Fiscal 1996. This improvement was achieved as a result  of
accelerated growth in the commercial aerospace industry, particularly in  the
second  half  of the year. Certain efficiencies achieved during  Fiscal  1997
continued to have positive effects on operating income. Operating income  was
positive  in  the  Aerospace Fasteners segment, which was  an  $11.6  million
improvement  in  the  Fiscal 1996 period over the corresponding  Fiscal  1995
period. During Fiscal 1996, operating losses decreased significantly  in  the
Aerospace Fasteners segment, due primarily to the cost of management changes,
consolidation  of  plants, eliminating unprofitable  product  lines,  pricing
adjustments, substantial work force downsizing and new productivity,  quality
and  marketing programs. A restructuring charge of $2.3 million was  recorded
in  Fiscal  1996,  primarily for severance pay to employees terminated  as  a
result  of  further  downsizing.  On  a pro  forma  basis,  operating  income
increased $20.0 million in Fiscal 1997, as compared to Fiscal 1996, and $13.1
million in Fiscal 1996, as compared to Fiscal 1995.

Aerospace Distribution Segment

     Aerospace Distribution sales were up $281.8 million and operating income
was  up  $25.3  million, primarily the result of reporting twelve  months  in
Fiscal  1997 versus four months in Fiscal 1996. On a twelve-month  pro  forma
basis sales were up $33.9 million, or 22.1%, and operating income was up $2.8
million,  or  52.3%. Sales increases in all three groups, hardware,  rotables
and  engines contributed to these strong results. This segment has  benefited
from   the   extended  service  lives  of  existing  aircraft,  growth   from
acquisitions and internal growth, which has increased market share.

     In Fiscal 1996, as a result of the transfer of Harco to Banner effective
February  25,  1996, the Company recorded four months of sales and  operating
income  of  Banner,  including Harco as part of  the  Aerospace  Distribution
segment.   This segment reported $130.0 million in sales and $5.6 million  in
operating  income for this four-month period ended June 30, 1996.  In  Fiscal
1996,  the  first  eight  months of Harco's sales and operating  income  were
included in the Aerospace Fasteners segment.

Corporate and Other

      The  Corporate  and  Other segment includes Gas  Springs  Division  and
Fairchild  Scandinavian  Bellyloading Co. AB (SBC) (formerly  the  Technology
Products  segment).  Sales improved at SBC which, was sold  effective  as  of
Fiscal  1997  year-end.  Over the past three years, corporate  administrative
expense  as a percentage of sales has decreased from 7.0% in 1995 to 4.5%  in
1996 to 2.8% in 1997.

Backlog of Orders

      Backlog is significant to all of the Company's operations, due to long-
term  production  requirements of its customers.  The  Company's  backlog  of
orders  as  of June 30, 1997 in the Aerospace Fasteners segment and Aerospace
Distribution   segment  amounted  to  $195.7  million  and   $90.9   million,
respectively,  with a "Book-to-Bill" ratio of 1.3 and 1.1, respectively.  The
Company anticipates that approximately 94.8% of the aggregate backlog at June
30, 1997 will be delivered by June 30, 1998.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

      Net  cash used by operating activities for the fiscal years ended  June
30, 1997 and 1996 amounted to $100.1 million and $49.0 million, respectively.
The  primary  use  of  cash for operating activities in fiscal  1997  was  an
increase  in  accounts receivable of $48.7 million and inventories  of  $36.9
million  which was mainly to support the Company's sales growth. The  primary
use  of  cash  for  operating activities in fiscal 1996  was  a  decrease  in
accounts  payable,  accrued liabilities and other  long-term  liabilities  of
$37.5 million.

      Net  cash provided from investing activities for the fiscal years ended
June  30,  1997  and  1996  amounted  to $80.0  million  and  $57.5  million,
respectively.  The primary source of cash from investing activities in fiscal
1997  was  the  sale  of discontinued operations, including  DME,  of  $173.7
million, which was slightly offset by the acquisition of subsidiaries in  the
amount of $55.9 million. The primary source of cash from investing activities
in fiscal 1996 was the sale of discontinued operations of $71.6 million.

      Net  cash used for financing activities for the fiscal years ended June
30,  1997  and 1996 amounted to $1.5 million and $39.6 million, respectively.
The  primary  use  of cash for financing activities in fiscal  1997  was  the
repayment  of debt and the repurchase of debentures of $155.6 million  offset
by  proceeds  from  the issuance of additional debt of  $154.3  million.  The
primary use of cash for financing activities in fiscal 1996 was the repayment
of  debt  and  the  repurchase  of debentures of  $195.4  million  which  was
partially  offset by proceeds from the issuance of additional debt of  $156.5
million.
      The Company's principal cash requirements include debt service, capital
expenditures,   acquisitions,  and  payment  of  other   liabilities.   Other
liabilities that require the use of cash include post-employment benefits for
retirees,  environmental  investigation  and  remediation  obligations,   and
litigation settlements and related costs.  The Company expects that  cash  on
hand,  cash  generated  from operations, and cash from borrowings  and  asset
sales will be adequate to satisfy cash requirements.

     With the proceeds of the Offering, borrowings under the Facility and the
after tax proceeds the Company has already received from the STFI Merger, the
Company refinanced substantially all of its existing indebtedness (other than
indebtedness  at  Banner), consisting of the 11 7/8%  Senior  Debentures  due
1999,  the  12%  Intermediate Debentures due 2001, the 13  1/8%  Subordinated
Debentures due 2006, the 13% Junior Subordinated debentures due 2007 and  its
existing  bank indebtedness. The Refinancing reduced the Company's total  net
indebtedness  by approximately $132 million and reduced the Company's  annual
interest  expense, on a pro forma basis, by approximately  $21  million.  The
completion  of  the  STFI  Merger will reduce the Company's  annual  interest
expense  by approximately $3 million. In addition, a portion of the  proceeds
from the Banner Hardware Group Disposition were used to repay all of Banner's
outstanding bank indebtedness, which will further reduce the Company's annual
interest expense by an additional $14 million.

      The  increase in the Company's shareholders' equity is expected  to  be
approximately  $40 million resulting a projected gain of $90  million  to  be
recorded  at  the  closing of the Banner Hardware Group Disposition,  and  an
estimated tax provision of $39 million and a minority interest effect of  $20
million.   The  operating income of the subsidiaries included in  the  Banner
Hardware  Group Disposition was $6.1 million and $14.1 million for the  three
and  six  months ended December 28, 1997, respectively.  Whereas the  Company
will   no  longer  benefit  from  the  operations  of  the  disposed   Banner
subsidiaries it expects to benefit from lower interest expense and  dividends
paid on the AlliedSignal stock.

      For  the Company's fiscal years 1995, 1996, and 1997, and for the first
six  months  of  fiscal  1998,  Fairchild Technologies  ("Technologies")  had
operating  losses of approximately $1.5 million, $1.5 million, $3.6  million,
and $5 million, respectively. In addition, as a result of the downturn in the
Asian markets, Technologies has experienced delivery deferrals, reduction  in
new orders, lower margins and increased price competition.

      In  response, in February, 1998, the Company adopted a formal  plan  to
enhance  the  opportunities for disposition of Technologies, while  improving
the ability of Technologies to operate more efficiently. The plan includes  a
reduction  in  production  capacity and headcount at  Technologies,  and  the
pursuit  of  potential  vertical and horizontal integration  with  peers  and
competitors  of  the  two  divisions that  constitute  Technologies,  or  the
inclusion  of  those  divisions in the Spin-Off. If  the  Company  elects  to
include  Technologies in the Spin-Off, the Company believes that it would  be
required to contribute substantial additional resources to allow Technologies
the  liquidity necessary to sustain and grow both the Fairchild Technologies'
operating divisions.

      In connection with the adoption of such plan, the Company will take  an
after-tax reserve of approximately $22 million in discontinued operations  in
the third fiscal quarter ending March 29, 1998, of which $14 million (net  of
income  tax  benefit  of  $4 million) relates to an  estimated  loss  on  the
disposal  of  certain  assets of Technologies, and $8 million  relates  to  a
provision  for  expected  operating losses over the  next  twelve  months  at
Technologies.  While the Company believes that $22 million  is  a  sufficient
charge  for  the  expected  losses  in connection  with  the  disposition  of
Technologies, there can be no assurance that the reserve is adequate.

      In order to focus its operations on the aerospace industry, the Company
is  considering distributing (the "Spin-Off") to its shareholders all of  the
stock  of  a subsidiary to be formed ("Spin-Co"), which may own substantially
all of the Company's non-aerospace assets. Although the Company's ability  to
effect  the  Spin-Off  is uncertain, the Company may  effect  a  spin-off  of
certain  non-aerospace  assets  as  soon  as  it  is  reasonably  practicable
following receipt of a solvency opinion relating to Spin-Co and all necessary
governmental  and  third party approvals.  In order to effect  the  Spin-Off,
approval  is  required from the board of directors of the  Company,  however,
shareholder  approval  is not required. The composition  of  the  assets  and
liabilities  to  be included in Spin-Co, and accordingly the ability  of  the
Company  to  consummate the Spin-Off, is contingent, among other  things,  on
obtaining  consents and waivers under the Company's New Credit Facility.   In
addition, the Company may encounter unexpected delays in effecting the  Spin-
Off,  and  the  Company can make no assurance as to the  timing  thereof.  In
addition,  prior to the consummation of the Spin-Off, the Company  may  sell,
restructure or otherwise change the assets and liabilities that  will  be  in
Spin-Co,  or  for  other  reasons  elect  not  to  consummate  the  Spin-Off.
Consequently, there can be no assurance that the Spin-Off will occur.

      In  connection with the possible Spin-Off, it is anticipated  that  the
Company will enter into an indemnification agreement pursuant to which  Spin-
Co  will  assume  and be solely responsible for all known and  unknown  past,
present  and  future  claims and liabilities of any nature  relating  to  the
pension  matter  described under "Legal Proceedings";  certain  environmental
liabilities  currently  recorded  as  $7.5  million,  but  for  which  it  is
reasonably  possible  the  total  expense  could  be  $12.3  million  on   an
undiscounted basis; certain retiree medical cost and liabilities  related  to
discontinued operations for which the Company has accrued approximately $31.3
million  as  of December 28, 1997 (see Note 11 to the Company's  Consolidated
Financial Statements); and certain tax liabilities. In addition, the  Spin-Co
would  also  be responsible for all liabilities relating to the  Technologies
business  and  an allocation of corporate expenses. Responsibility  for  such
liabilities would require significant commitments.

      Should the Spin-Off, as presently contemplated, occur prior to June  of
1999,  the  Spin-Off  will be a taxable transaction to  shareholders  of  the
Company  and could result in a material tax liability to the Company and  its
shareholders.  The amount of the tax to the Company and its  shareholders  is
uncertain, and if the tax is material to the Company, the Company  may  elect
not  to consummate the Spin-Off. Because circumstances may change and because
provisions  of the Internal Revenue Code of 1986, as amended, may be  further
amended  from  time to time, the Company may, depending on  various  factors,
restructure  or  delay  the  timing  of the  Spin-Off  to  minimize  the  tax
consequences thereof to the Company and its shareholders.

      With  the  year 2000 approaching, the Company is preparing all  of  its
computer systems to be Year 2000 compliant. Substantially all of the  systems
within the Aerospace Fasteners segment are currently Year 2000 compliant. The
Company expects to replace and upgrade some systems, which are not Year  2000
compliant,  within  the  Aerospace  Distribution  segment  and  at  Fairchild
Technologies.  The  Company  expects all of its systems  will  be  Year  2000
compliant  on  a  timely basis. However, there can be no assurance  that  the
systems of other companies, on which the Company's systems rely, will also be
timely  converted. Management is currently evaluating the  cost  of  ensuring
that all of its systems are Year 2000 compliant.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In  June  1997, FASB issued two pronouncements, Statement of  Financial
Accounting  Standards No. 130 ("SFAS 130") "Reporting Comprehensive  Income",
and  Statement  of  Financial  Accounting  Standards  No.  131  ("SFAS  131")
"Disclosures about Segments of an Enterprise and Related Information".   SFAS
130  establishes standards for reporting and display of comprehensive  income
and  its  components  in  the  financial  statements.   SFAS  131  supersedes
Statement  of Financial Accounting Standards No. 14 "Financial Reporting  for
Segments of a Business Enterprise" and requires that a public company  report
certain  information  about  its operating segments  in  annual  and  interim
financial  reports.  The Company will adopt SFAS 130 and SFAS 131  in  Fiscal
1999.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The following consolidated financial statements of the Company and  the
report  of the Company's independent public accountants with respect thereto,
are set forth below.


                                                                    Page

Report of Independent Public Accountants                                   16

Consolidated Balance Sheets as of June 30, 1996 and 1997                   17

Consolidated Statements of Earnings For The Three Years Ended June  30,
1995, 1996, and 1997                                                       19

Consolidated  Statements of Stockholders' Equity For  The  Three  Years
Ended June 30, 1995, 1996, and 1997                                        20

Consolidated Statements of Cash Flows For The Three Years Ended June 30,
1995, 1996, and 1997                                                       21

Notes to Consolidated Financial Statements                                 22

Supplementary data regarding "Quarterly Financial Information (Unaudited)" is
set forth under Item 8 in Note 23 to Consolidated Financial Statements.

                  Report of Independent Public Accountants



To The Fairchild Corporation:

      We  have  audited the accompanying consolidated balance sheets  of  The
Fairchild  Corporation (a Delaware corporation) and subsidiaries as  of  June
30,  1996  and  1997,  and the related consolidated statements  of  earnings,
stockholders' equity and cash flows for the years ended June 30,  1995,  1996
and 1997.  These financial statements are the responsibility of the Company's
management.   Our responsibility is to express an opinion on these  financial
statements based on our audits.

      We  conducted our audits in accordance with generally accepted auditing
standards.   Those  standards require that we plan and perform  an  audit  to
obtain  reasonable assurance about whether the financial statements are  free
of  material  misstatement.  An audit includes examining, on  a  test  basis,
evidence  supporting the amounts and disclosures in the financial statements.
An   audit  also  includes  assessing  the  accounting  principles  used  and
significant  estimates made by management, as well as evaluating the  overall
financial  statement  presentation.  We believe that  our  audits  provide  a
reasonable basis for our opinion.

      In  our  opinion,  the financial statements referred to  above  present
fairly,  in  all material respects, the financial position of  The  Fairchild
Corporation and subsidiaries as of June 30, 1996 and 1997, and the results of
their operations and their cash flows for the years ended June 30, 1995, 1996
and 1997, in conformity with generally accepted accounting principles.


                                              Arthur Andersen LLP

Washington, D.C.
September 5, 1997

(except with respect to the matter discussed in
 Note 24, as to which the date is February 28, 1998)

                                      
<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                               (In thousands)
<CAPTION>

                                           June 30   June 30,
ASSETS                                      1996     1997
<S>                                       <C>      <C>
Current Assets:                                           
 Cash and cash equivalents (of which
$8,224 and $4,839 is restricted)          $ 39,649 $ 19,420
Short-term investments                      10,498   25,647
Accounts receivable-trade, less             89,164  151,361
allowances of $5,449 and $6,905
Notes Receivable                           170,384      --
Inventories:                                              
   Finished goods                          234,395  292,441
   Work-in-process                          12,909   20,357
   Raw materials                            13,989   10,567
                                           261,293  323,365
Net current assets of discontinued           2,179   17,884
operations
Prepaid expenses and other current assets   20,283   34,490
Total Current Assets                       593,450  572,167
                                                          
Property, plant and equipment, net of                     
accumulated
  depreciation of $78,593 and $131,646      86,645  121,918
Net assets held for sale                    45,405   26,147
Net noncurrent assets of discontinued        4,622   14,495
operations
Cost in excess of net assets acquired                     
(Goodwill), less
  accumulated amortization of $31,885 and  139,504  154,129
$36,627
Investments and advances, affiliated        53,018   55,678
companies
Prepaid pension assets                      57,660   59,742
Deferred loan costs                          7,825    9,252
Long-term investments                          585    4,120
Notes receivable and other assets            4,684   35,018
Total Assets                              $993,398 $1,052,666



The  accompanying Notes to Consolidated Financial Statements are an  integral
part of these statements.
</TABLE>

<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                               (In thousands)
<CAPTION>

                                         June 30,   June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY        1996     1997
<S>                                       <C>      <C>
Current Liabilities:                                      
Bank notes payable and current maturities 
of long-term debt                        $  83,517 $ 47,322
Accounts payable                            59,894  75,522
Accrued liabilities:                                      
    Salaries, wages and commissions         15,407  17,138
    Employee benefit plan costs              6,342   1,764
    Insurance                               15,863  15,021
    Interest                                10,732  11,213
    Other accrued liabilities               24,179  52,182
                                            72,523  97,318
Income taxes                                24,635   5,863
Total Current Liabilities                  240,569 226,025
                                                          
Long-term debt, less current maturities    368,589 416,922
Other long-term liabilities                 18,605  23,622
Retiree health care liabilities             44,412  43,351
Noncurrent income taxes                     31,737  42,013
Minority interest in subsidiaries           58,625  68,309
Total Liabilities                          762,537 820,242
                                                          
Stockholders' Equity:                                     
Class A common stock, 10 cents par value;                 
authorized
  40,000,000 shares, 20,233,879                           
(19,997,756 in 1996) shares issued
  and 13,992,283 (13,756,160 in 1996)        2,000   2,023
shares outstanding
Class B common stock, 10 cents par value;                 
authorized
  20,000,000 shares, 2,632,516 (2,633,704                 
in 1996) shares issued
  and outstanding                              263     263
Paid-in capital                             69,366  71,015
Retained earnings                          208,618 209,949
Cumulative translation adjustment            2,453     939
Net unrealized holding loss on available-    (120)    (46)
for-sale securities
Treasury Stock, at cost, 6,241,596 shares  (51,719)(51,719)
of Class A common stock                          
Total Stockholders' Equity                 230,861 232,424
Total Liabilities and Stockholders'           
Equity                                    $993,398 $1,052,666


The  accompanying Notes to Consolidated Financial Statements are an  integral
part of these statements.
</TABLE>

<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF EARNINGS
                    (In thousands, except per share data)
<CAPTION>

                                    For the Years Ended June 30,
                                      1995     1996     1997
<S>                                 <C>      <C>      <C>
Revenue:                                                      
  Net sales                         $220,351 $349,236 $680,763
  Other income                           942      300       28
                                     221,293  349,536  680,791
Costs and expenses:                                           
  Cost of goods sold                 193,860  275,135  499,419
  Selling, general & administrative   52,975   79,295  142,959
  Research and development               974       94      100
  Amortization of goodwill             3,817    3,979    4,814
  Restructuring                           --    2,319       --
                                     251,626  360,822  647,292
Operating income (loss)             (30,333) (11,286)   33,499
Interest expense                      67,462   64,521   52,376
Interest income                      (3,349)  (8,062)  (4,695)
Net interest expense                  64,113   56,459   47,681
Investment income, net                 5,705    4,575    6,651
Equity in earnings of affiliates       1,607    4,821    4,598
Minority interest                    (2,293)  (1,952)  (3,514)
Non-recurring income (loss)               --  (1,724)    2,528
Loss from continuing operations     (89,427) (62,025)  (3,919)
before taxes
Income tax benefit                    33,147   29,839    5,735
Earnings (loss) from continuing     (56,280) (32,186)    1,816
operations
Earnings (loss) from discontinued     22,360   15,612    (485)
operations, net
Gain (loss) on disposal of             (259)  216,716       --
discontinued operations, net
Extraordinary items, net                 355 (10,436)       --
Net earnings (loss)                 $(33,824)$189,706   $1,331
Basic and Diluted Earnings Per                                
Share (see Note 24):
Earning (loss) from continuing
 operations                         $  (3.49)$  (1.98) $ 0.11
Earnings from discontinued                                    
operations, net                         1.39     0.96   (0.03)
Gain (loss) on disposal of                                
discontinued operations, net          (0.02)    13.37      --
Extraordinary items, net               0.02     (0.64)     --
Net earnings (loss)                 $ (2.09) $  11.71  $  0.08

Weighted average shares outstanding   16,103   16,206   16,539


The  accompanying Notes to Consolidated Financial Statements are an  integral
part of these statements.
</TABLE>

<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               (In thousands)
<CAPTION>

                         Class  Class              Cumulative                    
                           A     B                  
                        Common Common Paid-  Retai Transla Treasu             
                           n     n     in    ned   tion     ry
                         Stock Stock Capital Earni Adjustm  Stock Other  Total
                                             ngs    ent
<S>                      <C>    <C>    <C>    <C>    <C>     <C>     <C>    <C>
Balance, July 1, 1994        $     $      $     $       $      $     $      $
                         1,965   270 66,775 52,73     872 (51,71 (1,40 69,494
                                                6             9)    5)
Net loss                                  - (33,8      --      -       (33,82
                           --    --    -      24)            -     --      4)
Cumulative translation                    -         2,187      -        2,187
adjustment, net            --    --    -      --             -     --
Gain on purchase of                     236            --      -          236
preferred stock of         --    --           --             -     --
subsidiary
Reduction of minimum                      -            --      - 1,405  1,405
liability for pensions     --    --    -      --             -
Net unrealized holding                    -            --      - (120)  (120)
loss on available-for-     --    --    -      --             -
sale securities
Balance, June 30, 1995   1,965   270 67,011 18,91   3,059 (51,71 (120) 39,378
                                                2             9)
Net earnings                              - 189,7      --      -       189,70
                           --    --    -       06            -     --       6
Cumulative translation                    -         (606)      -        (606)
adjustment                 --    --    -      --             -     --
Fair market value of                  1,148            --      -        1,148
stock warrants issued      --    --           --             -     --
Proceeds received from      28        1,481            --      -        1,509
stock options exercised          --           --             -     --
Exchange of Class B for      7   (7)      -            --      -            -
Class A common stock                   -      --             -     --     -
Gain realized on                      (274)            --      -        (274)
retirement of preferred    --    --           --             -     --
stock of subsidiary
Balance, June 30, 1996   2,000   263 69,366 208,6   2,453 (51,71 (120) 230,86
                                               18             9)            1
Net earnings                              - 1,331      --      -        1,331
                           --    --    -                     -     --
Cumulative translation                    -       (1,514)      -       (1,514
adjustment                 --    --    -      --             -     --       )
Fair market value of                    546            --      -          546
stock warrants issued      --    --           --             -     --
Proceeds received from      23        1,103            --      -        1,126
options exercised                --           --             -     --
Net unrealized holding                    -            --      -    74     74
gain on available-for-     --    --    -      --             -
sale securities
 Balance, June 30, 1997      $     $      $ $209,       $  $          $      $
                         2,023   263 71,015   949     939 (51,71   (46) 232,42
                                                         9)                 4



The  accompanying Notes to Consolidated Financial Statements are an  integral
part of these statements.
</TABLE>

<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In thousands)
<CAPTION>

                                             For the Twelve Months Ended
                                                 1995    1996    1997
<S>                                            <C>      <C>      <C>
Cash flows from operating activities:                                 
       Net earnings (loss)                    (33,824) 189,706   1,331
       Depreciation and amortization           20,503   21,045  24,307
       Accretion of discount on long-term                             
liabilities                                     4,773    4,686   4,963
       Net gain on the merger of subsidiaries      -- (162,703)     --
       Net gain on the sale of discontinued                           
operations                                         --  (53,942)     --
       Extraordinary items, net of cash                               
payments                                            --   4,501      --
       Provision for restructuring (excluding                         
cash payments of $777 in 1996)                      --   1,542      --
       (Gain) loss on sale of property, plant,                        
and equipment                                      649     (9)    (72)
       Undistributed earnings of affiliates,                          
net                                              (500) (3,857) (1,055)
       Minority interest                        2,293   1,952   3,514
       Change in trading securities             1,879  (5,346) (5,733)
       Change in receivables                   (3,909) (5,566) (48,693)
       Change in inventories                    1,063 (16,088) (36,868)
       Change in other current assets          (3,256) (2,989) (14,088)
       Change in other non-current assets       4,590   3,609  (16,565)
       Change in accounts payable, accrued                            
liabilities and other long-term liabilities   (25,184)(37,477)  6,102
       Non-cash charges and working capital                           
changes of discontinued operations              5,883  11,985 (17,201)
       Net cash used for operating activities (25,040)(48,951)(100,058)
Cash flows from investing activities:                                 
       Proceeds received from (used for)                              
investment securities, net                     12,281     265 (12,951)
       Purchase of property, plant and                                
equipment                                      (5,383) (5,680) (15,014)
       Proceeds from sale of plant, property                          
and equipment                                      126      98     213
       Equity investment in affiliates          (1,051) (2,361) (1,749)
       Minority interest in subsidiaries            --  (2,817) (1,610)
       Acquisition of subsidiaries, net of        (511)   --    (55,916)
cash acquired                             
      Net proceeds received from the sale of        --  71,559  173,719
discontinued operations                     
       Changes in net assets held for sale       1,441   5,894      385
       Investing activities of discontinued                           
operations                                     (26,059) (9,418) (7,102)
       Net cash provided by (used for)                                
investing activities                           (19,156)  57,540  79,975
Cash flows from financing activities:                                 
       Proceeds from issuance of debt                                 
                                                71,339 156,501 154,294
       Debt repayments and repurchase of                              
debentures, net                               (55,311) (195,420) (155,600)
       Issuance of Class A common stock              --   1,509   1,126
       Financing activities of discontinued                           
operations                                     (3,683) (2,227) (1,275)
       Net cash provided by (used for)                                
financing activities                           12,345 (39,637) (1,455)
      Effect of exchange rate changes on cash     665   (485)   1,309
      Net decrease in cash and cash
      equivalents                             (31,186) (31,533) (20,229)
      Cash and cash equivalents, beginning of                         
the year                                       102,368  71,182  39,649
      Cash and cash equivalents, end of the
year                                          $ 71,182  $39,649 $ 19,420

The  accompanying Notes to Consolidated Financial Statements are an  integral
part of these statements.
</TABLE>

           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In thousands, except per share data)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

      Corporate  Structure:  The Fairchild Corporation  (the  "Company")  was
incorporated  in October 1969, under the laws of the State of Delaware.   RHI
Holdings,  Inc. ("RHI") is a direct subsidiary of the Company.   RHI  is  the
owner  of  100% of Fairchild Holding Corp. ("FHC") and the majority owner  of
Banner  Aerospace, Inc., ("Banner").  The Company's principal operations  are
conducted through FHC and Banner.  The Company also holds  significant equity
interests  in  Shared  Technologies  Fairchild  Inc.  ("STFI")  and   Nacanco
Paketleme ("Nacanco"). The Company's investment in STFI resulted from a March
13,  1996  Merger of the Communications Services Segment of the Company  with
Shared  Technologies,  Inc.  (See Note 3).  The  proposed  sale  of  STFI  to
Intermedia  Communications  Inc., as discussed  in  Note  24,  completes  the
disposition  of  the Communications Services Segment. In February  1998,  the
Company  adopted  a  formal  plan  to sell  its  interest  in  the  Fairchild
Technologies  segment.  Accordingly, the Company's financial statements  have
been  restated to present the results of the Communications Services Segment,
STFI and Fairchild Technologies as discontinued operations.

      Fiscal  Year:  The fiscal year ("Fiscal") of the Company ends June  30.
All  references  herein to "1995", "1996", and "1997" mean the  fiscal  years
ended June 30, 1995, 1996 and 1997, respectively.

     Consolidation Policy: The accompanying consolidated financial statements
are  prepared in accordance with generally accepted accounting principles and
include the accounts of the Company and all of its wholly-owned and majority-
owned  subsidiaries.  All significant intercompany accounts and  transactions
have  been  eliminated in consolidation.  Investments in companies  in  which
ownership  interest range from 20 to 50 percent are accounted for  using  the
equity method (see Note 9).

      Cash  Equivalents/Statements  of  Cash  Flows:   For  purposes  of  the
Statements of Cash Flows, the Company considers all highly liquid investments
with  original  maturity dates of three months or less as  cash  equivalents.
Total  net cash disbursements (receipts) made by the Company for income taxes
and interest were as follows:
<TABLE>
<CAPTION>

                              1995     1996     1997
<S>                         <C>      <C>      <C>
 Interest                   $ 66,004 $ 66,716 $48,567
 Income Taxes                (3,056)    9,279 (1,926)
</TABLE>

      Restricted Cash: On June 30, 1996 and 1997, the Company had  restricted
cash  of  $8,224  and  $4,839, respectively, all of which  is  maintained  as
collateral  for certain debt facilities.  Cash investments are in  short-term
certificates of deposit.

     Investments: Management determines the appropriate classification of its
investments at the time of acquisition and reevaluates such determination  at
each  balance sheet date.  Trading securities are carried at fair value, with
unrealized holding gains and losses included in earnings.  Available-for-sale
securities  are  carried  at fair value, with unrealized  holding  gains  and
losses, net of tax, reported as a separate component of stockholders' equity.
Investments  in equity securities and limited partnerships that do  not  have
readily  determinable fair values are stated at cost and are  categorized  as
other  investments.  Realized  gains and  losses  are  determined  using  the
specific  identification method based on the trade  date  of  a  transaction.
Interest  on corporate obligations, as well as dividends on preferred  stock,
are accrued at the balance sheet date.

     Inventories: Inventories are stated at the lower of cost or market. Cost
is  determined  using  the last-in, first-out ("LIFO")  method  at  principal
domestic aerospace manufacturing operations and using the first-in, first-out
("FIFO")  method elsewhere.  If the FIFO inventory valuation method had  been
used exclusively, inventories would have been approximately $4,756 and $4,868
higher  at June 30, 1996 and 1997, respectively.  Inventories from continuing
operations are valued as follows:
<TABLE>
<CAPTION>

                                    June 30,   June 30,
                                      1996     1997
<S>                                <C>        <C>
 First-in, first-out (FIFO)        $229,950  $293,469
 Last-in, Last-out (LIFO)            31,343    29,896
Total inventories                  $261,293  $323,365
</TABLE>

      Properties and Depreciation: The cost of property, plant and  equipment
is depreciated over estimated useful lives of the related assets. The cost of
leasehold  improvements is depreciated over the lesser of the length  of  the
related leases or the estimated useful lives of the assets.  Depreciation  is
computed using the straight-line method for financial reporting purposes  and
using  accelerated depreciation methods for Federal income tax purposes.   No
interest  costs  were  capitalized in any of the years presented.   Property,
plant and equipment consisted of the following:
<TABLE>
<CAPTION>

                                    June 30, June 30,
                                      1996     1997
<S>                                 <C>       <C>
Land                              $   10,408 $ 13,438
Building and improvements             40,597   54,907
Machinery and equipment               93,495  152,430
Transportation Vehicles                  737      864
Furniture and fixtures                17,672   25,401
Construction in progress               2,329    6,524
Property, plant and equipment at     165,238  253,564
cost
Less: Accumulated depreciation      (78,593) (131,646)
Net property, plant and equipment  $ 86,645  $121,918
</TABLE>


      Amortization of Goodwill:  Goodwill, which represents the excess of the
cost of purchased businesses over the fair value of their net assets at dates
of acquisition, is being amortized on a straight-line basis over 40 years.

      Deferred Loan Costs:  Deferred loan costs associated with various  debt
issues  are being amortized over the terms of the related debt, based on  the
amount   of   outstanding   debt,  using  the  effective   interest   method.
Amortization expense for these loan costs for 1995, 1996 and 1997 was $3,794,
$3,827, and $2,847, respectively.

      Impairment  of  Long-Lived Assets: In Fiscal 1997, the Company  adopted
Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting
for  the  Impairment  of Long-Lived Assets and for Long-Lived  Assets  to  Be
Disposed  Of".  SFAS 121 establishes accounting standards for the  impairment
of  long-lived assets, certain identifiable intangibles, and goodwill related
to  those  assets to be held and used, and for long-lived assets and  certain
identifiable  intangibles to be disposed of.  The Company reviews  its  long-
lived   assets,   including  property,  plant  and  equipment,   identifiable
intangibles  and  goodwill,  for impairment whenever  events  or  changes  in
circumstances  indicate that the carrying amount of the  assets  may  not  be
fully recoverable.  To determine recoverability of its long-lived assets  the
Company  evaluates the probability that future undiscounted  net  cash  flows
will  be less than the carrying amount of the assets.  Impairment is measured
based  on  the difference between the carrying amount of the assets and  fair
value.  The implementation of SFAS 121 did not have a material effect on  the
Company's consolidated results of operations.

      Foreign Currency Translation: For foreign subsidiaries whose functional
currency is the local foreign currency, balance sheet accounts are translated
at  exchange  rates in effect at the end of the period and  income  statement
accounts  are  translated  at average exchange rates  for  the  period.   The
resulting  translation gains and losses are included as a separate  component
of  stockholders' equity.  Foreign transaction gains and losses are  included
in other income and were insignificant in Fiscal 1995, 1996 and 1997.

      Research  and  Development: Company-sponsored research and  development
expenditures are expensed as incurred.

      Capitalization of interest and taxes: The Company capitalizes  interest
expense and property taxes relating to property being developed.

      Nonrecurring  Income:  Nonrecurring income in 1997  resulted  from  the
$2,528  gain  recorded  from the sale of Fairchild Scandinavian  Bellyloading
Company  ("SBC"), (See Note 2).  Nonrecurring expense in 1996  resulted  from
expenses  incurred in 1996 in connection with other, alternative transactions
considered but not consummated.


      Stock-Based  Compensation:  In  Fiscal 1997,  the  Company  implemented
Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting
for  Stock-Based  Compensation".  SFAS 123 establishes  financial  accounting
standards for stock-based employee compensation plans and for transactions in
which  an entity issues equity instruments to acquire goods or services  from
non-employees.   As permitted by SFAS 123, the Company will continue  to  use
the  intrinsic value based method of accounting prescribed by APB Opinion No.
25, for its stock-based employee compensation plans.  Fair market disclosures
required by SFAS 123 are included in Note 15.

     Use of Estimates:  The preparation of financial statements in conformity
with  generally  accepted accounting principles requires management  to  make
estimates  and  assumptions that affect the reported amounts  of  assets  and
liabilities and disclosure of contingent assets and liabilities at  the  date
of the financial statements and the reported amounts of revenues and expenses
during  the  reporting  period.   Actual  results  could  differ  from  those
estimates.

      Reclassifications: Certain amounts in prior years' financial statements
have been reclassified to conform to the 1997 presentation.

     Recently Issued Accounting Pronouncements: In October 1996, the American
Institute  of Certified Public Accountants issued Statement of Position  96-1
("SOP  96-1")  "Environmental Remediation Liabilities".   SOP  96-1  provides
authoritative  guidance  on  specific  accounting  issues  related   to   the
recognition,  measurement,  and the display and disclosure  of  environmental
remediation  liabilities.  The Company is required to implement SOP  96-1  in
Fiscal  1998.   The  Company's  present  policy  is  similar  to  the  policy
prescribed   by   SOP  96-1;  therefore  there  will  be   no   effect   from
implementation.

      In  February  1997, the Financial Accounting Standards  Board  ("FASB")
issued  two  pronouncements, Statement of Financial Accounting Standards  No.
128  ("SFAS 128") "Earnings Per Share", and Statement of Financial Accounting
Standards  No.  129  ("SFAS  129") "Disclosure of Information  about  Capital
Structure".   SFAS  128 establishes accounting standards  for  computing  and
presenting  earnings  per share ("EPS").  SFAS 128 is effective  for  periods
ending  after  December  15, 1997, including interim  periods,  and  requires
restatement  of all prior period EPS data presented (see Note  24).   Results
from  the calculation of simple and diluted earnings per share, as prescribed
by  SFAS  128, would not differ materially from the calculations for  primary
and fully diluted earnings per share for the years ending June 30, 1997, 1996
and 1995.  SFAS 129 establishes standards for disclosure of information about
the  Company's  capital structure and becomes effective  for  periods  ending
after December 15, 1997.

      In  June  1997, FASB issued two pronouncements, Statement of  Financial
Accounting  Standards No. 130 ("SFAS 130") "Reporting Comprehensive  Income",
and  Statement  of  Financial  Accounting  Standards  No.  131  ("SFAS  131")
"Disclosures about Segments of an Enterprise and Related Information".   SFAS
130  establishes standards for reporting and display of comprehensive  income
and  its  components  in  the  financial  statements.   SFAS  131  supersedes
Statement  of Financial Accounting Standards No. 14 "Financial Reporting  for
Segments of a Business Enterprise" and requires that a public company  report
certain  information  about  its operating segments  in  annual  and  interim
financial  reports.  The Company will adopt SFAS 130 and SFAS 131  in  Fiscal
1998.

2.   ACQUISITIONS

     The Company's acquisitions described in this section have been accounted
for  using  the  purchase method.  The purchase prices assigned  to  the  net
assets  acquired were based on the fair value of such assets and  liabilities
at the respective acquisition dates.

     In January 1997, Banner, through its subsidiary, Dallas Aerospace, Inc.,
acquired  PB  Herndon  Company  ("PB  Herndon")  in  a  business  combination
accounted  for  as  a  purchase. PB Herndon is  a  distributor  of  specialty
fastener lines and similar aerospace related components.  The total  cost  of
the  acquisition was $16,000, which exceeded the fair value of the net assets
of  PB  Herndon by approximately $3,451. The excess is being amortized  using
the straight-line method over 40 years. The Company purchased PB Herndon with
available cash.

      In  February  1997, the Company completed a transaction (the  "Simmonds
Acquisition")  pursuant  to  which the Company  acquired  common  shares  and
convertible debt representing an 84.2% interest, on a fully diluted basis, of
Simmonds S.A. ("Simmonds").  The Company initiated a tender offer to purchase
the remaining shares and convertible debt held by the public.  By Fiscal year-
end,  the  Company  had purchased, or placed sufficient  cash  in  escrow  to
purchase,  all  the remaining shares and convertible debt of  Simmonds.   The
total  purchase  price  of Simmonds, including the assumption  of  debt,  was
approximately  $62,000, which the Company funded with  available  cash.   The
Company  recorded  approximately $13,000 in goodwill  as  a  result  of  this
acquisition.    Simmonds  is  one  of  Europe's  leading  manufacturers   and
distributors of aerospace and automotive fasteners.

      In  September 1994, the Company acquired all of the outstanding  common
stock  of  Fairchild  Scandinavian Bellyloading Company AB  ("SBC")  for  the
assumption  of a minimal amount of debt.  SBC is a designer and  manufacturer
of  a patented cargo loading system, which is installed in the cargo area  of
commercial  aircraft.  On June 30, 1997, the Company sold all the patents  of
SBC  to  Teleflex  Incorporated  ("Teleflex")  for  $5,000,  and  immediately
thereafter sold all the stock of SBC to a wholly owned subsidiary of Teleflex
for  $2,000.   The  Company may also receive an additional amount  of  up  to
$7,000 based on future net sales of SBC's patented products and services.  In
Fiscal  1997, the Company recorded a $2,528 nonrecurring gain as a result  of
these transactions.

      On  November  28,  1994,  the Company's former Communications  Services
segment   completed   the   acquisition   of   substantially   all   of   the
telecommunications  assets  of JWP Telecom, Inc.  ("JWP")  for  approximately
$11,000, plus the assumption of approximately $3,000 of liabilities.  JWP  is
a  telecommunications  system integrator, specializing in  the  distribution,
installation and maintenance of voice and data communications equipment.

     Pro forma information is not required for these acquisitions.

3.  MERGER AGREEMENT

       The  Company,  RHI  and  Fairchild  Industries,  Inc.  ("FII"),  RHI's
subsidiary, entered into an Agreement and Plan of Merger dated as of November
9,  1995  (as amended, the "Merger Agreement") with Shared Technologies  Inc.
("STI").   On  March 13, 1996, in accordance with the Merger  Agreement,  STI
succeeded to the telecommunications systems and services business operated by
the Company's Fairchild Communications Services Company ("FCSC").

      The transaction was effected by a Merger of FII with and into  STI (the
"Merger") with the surviving company renamed STFI.  Prior to the Merger,  FII
transferred all of its assets to, and all of its liabilities were assumed  by
FHC, except for the assets and liabilities of FCSC, and $223,500 of the FII's
existing  debt and preferred stock.  As a result of the Merger,  the  Company
received  shares  of  Common Stock and Preferred Stock of  STFI  representing
approximately a 41% ownership interest in STFI.

     The Merger was structured as a reorganization under section 386(a)(1)(A)
of  the  Internal  Revenue Code of 1986, as amended.  In  1996,  the  Company
recorded  a  $163,130 gain from this transaction. Subsequent to year-end  the
Company entered into an agreement to sell its investment in STFI. See Note 24
for further discussion.

4.   MAJORITY INTEREST BUSINESS COMBINATION

      Effective  February 25, 1996, the Company completed a transfer  of  the
Company's Harco Division ("Harco") to Banner in exchange for 5,386,477 shares
of  Banner  common stock.  The exchange increased the Company's ownership  of
Banner  common  stock  from approximately 47.2% to 59.3%,  resulting  in  the
Company becoming the majority shareholder of Banner. Accordingly, the Company
has  consolidated the results of Banner since February 25, 1996.  The Company
recorded  a  $427 nonrecurring loss from outside expenses incurred  for  this
transaction  in  1996.   Banner is a leading international  supplier  to  the
aerospace industry as a distributor, providing a wide range of aircraft parts
and  related support services.  Harco is a distributor of precision fasteners
to the aerospace industry.

      In  May 1997, Banner granted all of its stockholders certain rights  to
purchase  Series A Convertible Paid-in-Kind Preferred Stock.  In  June  1997,
Banner  received  net  proceeds of $33,876 and  issued  3,710,955  shares  of
preferred stock.  The Company purchased $28,390 of the preferred stock issued
by Banner, increasing its voting percentage to 64.0%.

      In connection with the Company's December 23, 1993 sale of its interest
in  Rexnord  Corporation to BTR Dunlop Holdings, Inc.  ("BTR"),  the  Company
placed  shares of Banner, with a fair market value of $5,000,  in  escrow  to
secure  the  Company's remaining indemnification of BTR against a  contingent
liability.   Once the contingent liability is resolved, the  escrow  will  be
released.

5.   DISCONTINUED OPERATIONS AND NET ASSETS HELD FOR SALE

      On  February  22, 1996, pursuant to an Asset Purchase  Agreement  dated
January 26, 1996, the Company, through one of its subsidiaries, completed the
sale  of  certain assets, liabilities and the business of the  D-M-E  Company
("DME")   to  Cincinnati  Milacron  Inc.  ("CMI"),  for  a  sales  price   of
approximately $244,331, as adjusted.  The sales price consisted of $74,000 in
cash,  and  two  8%  promissory notes in the aggregate  principal  amount  of
$170,331 (together, the "8% CMI Notes").  On July 29, 1996, CMI paid in  full
the 8% CMI Notes.

      As a result of the sale of DME in 1996, the Company recorded a gain  on
disposal  of  discontinued  operations of approximately  $54,012,  net  of  a
$61,929 tax provision.

      On  January  27,  1996,  FII  completed  the  sale  of  Fairchild  Data
Corporation  ("Data")  to  SSE  Telecom,  Inc.  ("SSE")  for  book  value  of
approximately $4,400 and 100,000 shares of SSE's common stock valued at $9.06
per  share,  or  $906,  at  January 26, 1996, and  warrants  to  purchase  an
additional 50,000 shares of SSE's common stock at $11.09 per share.

      Accordingly,  the results of DME and Data have been  accounted  for  as
discontinued  operations.  The  combined net sales of DME  and  Data  totaled
$180,773  and  $108,131 for 1995 and 1996, respectively.  Net  earnings  from
discontinued  operations was $13,994, net of $10,183 for taxes in  1995,  and
$9,186, net of $5,695 for taxes in 1996.

      Net assets held for sale at June 30, 1997, includes two parcels of real
estate  in  California,  and several other parcels  of  real  estate  located
primarily  throughout the continental United States, which the Company  plans
to sell, lease or develop, subject to the resolution of certain environmental
matters and market conditions.  Also included in net assets held for sale are
limited partnership interests in (i) a real estate development joint venture,
and (ii) a landfill development partnership.

     Net assets held for sale are stated at the lower of cost or at estimated
net  realizable  value, which reflect anticipated sales proceeds,  and  other
carrying  costs  to be incurred during the holding period.  Interest  is  not
allocated to net assets held for sale.

     See Note 24 for discontinuance of STFI and Fairchild Technologies.

6.   PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

      The  following  unaudited pro forma information for the  twelve  months
ended  June 30, 1995 and June 30, 1996, provides the results of the Company's
operations as though (i) the disposition of DME and Data, (ii) the Merger  of
FCSC,  and  (iii)  the  transfer  of  Harco  to  Banner,  resulting  in   the
consolidation  of  Banner, had been in effect since  the  beginning  of  each
period.   The  pro  forma  information is based on the  historical  financial
statements  of  the  Company,  DME, FCSC and Banner,  giving  effect  to  the
aforementioned  transactions.   In preparing  the  pro  forma  data,  certain
assumptions and adjustments have been made which (i) reduce interest  expense
for  revised  debt  structures,  (ii)  increase  interest  income  for  notes
receivable, (iii) reduce minority interest from Series C Preferred  Stock  of
FII  being  redeemed,  and (iv) adjust equity in earnings  of  affiliates  to
include the estimated results of STFI.

       The  following  unaudited  pro  forma  financial  information  is  not
necessarily indicative of the results of operations that actually would  have
occurred if the transactions had been in effect since the beginning  of  each
period, nor is it necessarily indicative of future results of the Company.
<TABLE>
<CAPTION>

                                            1995       1996
<S>                                       <C>       <C>
 Sales                                   $445,502   $537,123
 Loss from continuing operations          (31,489)  (14,291)
   Basic and diluted loss from continuing                    
operations per share                        (1.96)    (0.88)
 Net loss                                 (32,876)  (15,766)
   Basic and diluted net loss per share     (2.04)    (0.97)
</TABLE>

       The  pro  forma  financial  information  has  not  been  adjusted  for
nonrecurring  income and gains from disposal of discontinued operations  that
have occurred from these transactions.

7.   EXTRAORDINARY ITEMS

      During  Fiscal 1996, the Company used the Merger transaction  and  cash
available  to  retire  fully all of the FII's 12 1/4% senior  notes  ("Senior
Notes"), FII's 9 3/4% subordinated debentures due 1998, and bank loans  under
a  credit  agreement of a former subsidiary of the Company, VSI  Corporation.
The redemption of the Senior Notes at a premium, consent fees paid to holders
of  the Senior Notes, the write-off of the original issue discount on  FII  9
3/4% subordinated debentures and the write off of the remaining deferred loan
fees  associated  with  the  issuance of the debt  retired,  resulted  in  an
extraordinary loss of $10,436, net of a tax benefit, in 1996.

      During  Fiscal  1995,  the Company recognized extraordinary  gains  and
losses  from  the early extinguishment of debt resulting from repurchases  of
its  debentures  on  the open market or in negotiated transactions,  and  the
write-offs  of  certain  deferred  costs  associated  with  the  issuance  of
securities repurchased.  Early extinguishment of the Company's debt  resulted
in an extraordinary gain of $355, net of a tax provision, in 1995.

8.   INVESTMENTS

      Short-term  investments at June 30, 1997, consist primarily  of  common
stock  investments  in  public corporations which are classified  as  trading
securities.   All other short-term investments and all long-term  investments
do  not  have  readily  determinable fair values  and  primarily  consist  of
investments  in preferred and common stocks of private companies and  limited
partnerships.  A summary of investments held by the Company consists  of  the
following:
<TABLE>
<CAPTION>


                                   1996                    1997
                                  Aggregate         Aggregate    
Name of Issuer or                 Fair     Cost     Fair     Cost
Type of Each Issue                Value    Basis    Value    Basis
<S>                              <C>      <C>      <C>      <C>
Short-term investments:                                            
Trading securities:                                                
  Common stock                    $10,362  $ 5,954  $16,094  $ 7,398
Other investments                     136      136    9,553    9,553
                                  $10,498  $ 6,090  $25,647  $16,951
Long-term investments:                                             
Other investments                 $   585  $   585  $ 4,120  $ 4,120
</TABLE>

     Investment income is summarized as follows:
<TABLE>
<CAPTION>

                                        1995   1996    1997
<S>                                    <C>     <C>     <C>
Gross realized gain (loss) from sales $3,948  $(1,744) $ 1,673
Change in unrealized holding gain        (36)   5,527    4,289
(loss) from trading securities
Gross realized loss from impairments    (652)      --      --
Dividend income                         2,445     792     689
                                       $5,705  $4,575  $6,651
</TABLE>


9.   INVESTMENTS AND ADVANCES, AFFILIATED COMPANIES

     The following table presents summarized historical financial information
on  a  combined 100% basis of the Company's principal investments, which  are
accounted for using the equity method.
<TABLE>
<CAPTION>

                                      1995     1996     1997
 Statement of Earnings:                                       
<S>                                 <C>       <C>       <C>
     Net sales                      $313,888  $295,805  $102,962
     Gross profit                    100,644    89,229    39,041
     Earnings from continuing                                 
operations                             9,623   18,289   14,812
     Discontinued operations, net       -        -        -
     Net earnings                      9,623   18,289   14,812
 Balance Sheet at June 30:                                    
     Current assets                           $53,843  $47,546
     Non-current assets                        37,201   40,878
     Total assets                              91,044   88,424
     Current liabilities                       27,392   26,218
     Non-current liabilities                    1,194      740
</TABLE>

      The  Company  owns  approximately 31.9% of Nacanco common  stock.   The
Company  recorded  equity earnings of $2,859, $5,487, and  $4,673  from  this
investment for 1995, 1996 and 1997, respectively.

      Effective  February 25, 1996, the Company increased its  percentage  of
ownership  of  Banner common stock from 47.2% to approximately 59.3%.   Since
February  25, 1996, the Company has consolidated Banner's results.  Prior  to
February  25, 1996, the Company accounted for its investment in Banner  using
the  equity  method and held its investment in Banner as part of  investments
and  advances, affiliated companies.  The Company recorded equity in earnings
of $138 and $363 from this investment for 1995 and 1996, respectively.

      The Company is accounting for an investment in a public fund, which  is
controlled by an affiliated investment group of the Company, at market value.
The amortized cost basis of the investment was $923 and had been written down
by $71, before tax, to market value.  The Company recorded a gross unrealized
holding  gain  (loss) of  $(120) and $114 from this investment  in  1995  and
1997, respectively.

      The  Company's  share  of  equity  in earnings  of  all  unconsolidated
affiliates  for  1995,  1996  and  1997  was  $1,607,  $4,271,  and   $4,598,
respectively.   The  carrying value of investments and  advances,  affiliated
companies consists of the following:
<TABLE>
<CAPTION>

                                   June 30, June 30,
                                      1996     1997
<S>                                 <C>       <C>
 Nacanco                           $20,886   $20,504
 STFI                               30,559   31,978
 Others                              1,573    3,196
                                   $53,018   $55,678
</TABLE>

      On  June  30,  1997,  approximately $9,056 of  the  Company's  $209,949
consolidated retained earnings was from undistributed earnings of 50  percent
or less currently owned affiliates accounted for by the equity method.

10.  NOTES PAYABLE AND LONG-TERM DEBT

     At June 30, 1997 and 1996, notes payable and long-term debt consisted of
the following:
<TABLE>
<CAPTION>

                                            June 30,      June 30,
                                              1996      1997
<S>                                        <C>        <C>
 Bank credit agreements                    $  73,500  $    100
 Other short-term notes payable                2,821    15,429
 Short-term notes payable (weighted
average interest rates of 8.6% and      
7.8% in 1996 and 1997, respectively)      $   76,321   $15,529

Bank credit agreements                    $  112,500   $177,250
 11 7/8% RHI Senior debentures due 1999       85,769     85,852
 12% Intermediate debentures due 2001        114,495    115,359
 13 1/8% Subordinated debentures due 2006     35,061     35,188
 13% Junior Subordinated debentures due                       
2007                                          24,800     24,834
 10.65% Industrial revenue bonds               1,500      1,500
 Capital lease obligations, interest from                     
4.4% to 10.5%                                     65     1,897
 Other notes payable, collateralized by                       
property, plant and                            1,595     6,835
equipment, interest from 4.3% to 10.0%
                                                              
                                             375,785   448,715
 Less: Current maturities                                     
                                             (7,196)  (31,793)
 Net long-term debt                        $368,589   $416,922
</TABLE>

      Bank  Credit  Agreements: The Company maintains credit agreements  (the
"Credit  Agreements")  with a consortium of banks,  which  provide  revolving
credit  facilities  to  RHI,  FHC  and  Banner,  and  term  loans  to  Banner
(collectively the "Credit Facilities").

      On  July  26,  1996,  the Company amended and restated  the  terms  and
provisions  of  FHC's credit agreement, in their entirety  (the  "FHC  Credit
Agreement").  The FHC Credit Agreement extends to July 28, 2000, the maturity
of  FHC's  revolving credit facility (the "FHC Revolver").  The FHC  Revolver
has a borrowing limit of $52,000, however, availability is determined monthly
by  calculation  of  a borrowing base comprised of specified  percentages  of
FHC's  accounts receivable, inventories and the appraised value of  equipment
and  real property.  The FHC Revolver generally bears interest at a base rate
of  1 1/2% over the greater of (i) Citibank New York's base rate, or (ii) the
Federal  Funds Rate plus 1 1/2% for domestic borrowings and at  2  1/2%  over
Citibank London's base rate for foreign borrowings. FHC's Revolver is subject
to  a non-use commitment fee of 1/2% on the average unused availability;  and
outstanding letters of credit are subject to fees of 2 3/4% per  annum.   The
FHC  Credit Agreement was further amended on February 21, 1997 to permit  the
Simmonds  Acquisition.   Terms modified by the February  21,  1997  amendment
included  a  provision in which the borrowing rate on the FHC  Revolver  will
increase by 1/4% on each of September 30, 1997 and December 31, 1997, in  the
event that the FHC Credit Agreement is not restructured or refinanced by such
date.

      The  FHC Credit Agreement requires FHC to comply with certain financial
and  non-financial loan covenants, including maintaining a minimum net  worth
of $150,000 and maintaining certain interest and fixed charge coverage ratios
at  the  end of each Fiscal Quarter.  Additionally, the FHC Credit  Agreement
restricts annual capital expenditures of FHC to $12,000. Substantially all of
FHC's  assets  are pledged as collateral under the FHC Credit Agreement.   At
June  30,  1997, FHC was in compliance with all the covenants under  the  FHC
Credit  Agreement.   FHC  may transfer available cash  as  dividends  to  the
Company.  However, the FHC Credit Agreement restricts the Company from paying
any dividends to stockholders.

       On July 18, 1997, the FHC Credit Agreement was restructured to provide
FHC  with  a  $150,000  senior secured credit facility (the  "FHC  Facility")
consisting of (i) up to $75,000 in revolving loans, with a letter  of  credit
sub-facility of $12,000, and (ii) a $75,000 term loan.  Advances  made  under
the FHC Facility would generally bear interest at a rate of, at the Company's
option,  (i)  2% over the Citibank N.A. base rate, or (ii) 3  1/4%  over  the
Eurodollar  Rate  ("LIBOR").   The  FHC Facility  is  subject  to  a  non-use
commitment  fee of 1/2% of the aggregate unused availability; and outstanding
letters of credit are subject to fees of 3 1/2% per annum.  A borrowing  base
is  calculated  monthly  to determine the amounts  available  under  the  FHC
Facility.   The  borrowing base is determined monthly  based  upon  specified
percentages of (i) FHC's accounts receivable, inventories, and the  appraised
value  of  equipment and real property, and (ii) assets  pledged  by  RHI  to
secure  the  facility.  The FHC Facility matures on July 28, 2000.   The  FHC
Facility provides that on December 31, 1998, the Company must repay the  term
loan,  in  full, together with an amount necessary to reduce the  outstanding
revolving  loans  to  $52,000, if the Company has not complied  with  certain
financial covenant requirements as of September 30, 1998.

      The  Credit  Agreements  provide RHI with  a  $4,250  revolving  credit
facility  (the  "RHI  Credit Agreement") which (i)  generally  bears  a  base
interest rate of 1/2% over the prime rate, (ii) requires a commitment fee  of
1/2%,  and (iii) matures on August 12, 1998.  RHI's Credit Agreement requires
RHI  to comply with specified covenants and maintain a consolidated net worth
of $175,000.  Additionally, RHI's capital expenditures are restricted, except
for  certain  leasehold improvements, to $2,000 per annum  plus  the  selling
price  of  fixed assets for such Fiscal Year.  The Company was in  compliance
with all the covenants under RHI's Credit Agreement at June 30, 1997. RHI may
pay  dividends to the Company if the purpose of such dividends is to  provide
the  Company with funds necessary to meet its debt service requirements under
specified  notes and debentures. However, all other dividends are subject  to
certain limitations, which was $10,000 in Fiscal 1997.

      Banner  has  a  credit agreement (the "Banner Credit Agreement")  which
provides  Banner  and  its subsidiaries with funds for  working  capital  and
potential  acquisitions.  The facilities under the  Banner  Credit  Agreement
consist of (i) a $55,000 six-year term loan (the "Banner Term Loan"), (ii)  a
$30,000 seven-year term loan (the "Tranche B Loan"), (iii) a $40,000 six-year
term  loan  (the  "Tranche  C  Loan"), and (iv) a  $71,500  revolving  credit
facility  (the  "Banner  Revolver").  The Banner  Credit  Agreement  requires
certain  semiannual term loan payments.  The Banner Term Loan and the  Banner
Revolver  bear  interest at prime plus 1 1/4% or LIBOR plus 2  1/2%  and  may
increase  by  1/4%  or  decrease by up to 1% based upon  certain  performance
criteria.  As a result of Banner's performance level through March 31,  1997,
borrowings  under  the  Banner  Term Loan and the  Banner  Revolver  bore  an
interest  rate  of prime plus 3/4% and LIBOR plus 2% for the  quarter  ending
June  30,  1997.  The Tranche B Loan bears interest at prime plus 1  3/4%  or
LIBOR  plus 3%.  The Tranche C Loan initially bears interest at prime plus  1
1/2%  or  LIBOR  plus  2  3/4% and may decrease by 1/4%  based  upon  certain
performance criteria.  The Banner Credit Agreement requires that  loans  made
to  Banner  can not exceed a defined borrowing base, which is  based  upon  a
percentage  of  eligible  inventories  and  accounts  receivable.    Banner's
revolving  credit facility is subject to a non-use fee of 55 basis points  of
the unused availability.

      The  Banner Credit Agreement requires quarterly compliance with various
financial and non-financial loan covenants, including maintenance of  minimum
net  worth,  and minimum ratios of interest coverage, fixed charge  coverage,
and  debt  to earnings before interest, taxes, depreciation and amortization.
Banner also has certain limitations on the incurrence of additional debt.  As
of  June  30,  1997,  Banner was in compliance with all covenants  under  the
Banner Credit Agreement.  Substantially all of Banner's assets are pledged as
collateral  under  the Banner Credit Agreement. The Banner  Credit  Agreement
substantially  limits  the  amount of dividends  that  can  be  paid  to  its
shareholders,  including the Company. Banner's current policy  is  to  retain
earnings  to support the growth of its present operations and to  reduce  its
outstanding debt.

      In  September  1995,  Banner entered into several interest  rate  hedge
agreements  ("Hedge  Agreements") to manage  its  exposure  to  increases  in
interest  rates  on  its  variable rate debt.  The Hedge  Agreements  provide
interest  rate  protection  on $60,000 of debt  through  September  2000,  by
providing an interest rate cap of 7% if the 90-day LIBOR rate exceeds 7%.  If
the 90-day LIBOR rate drops below 5%, Banner will be required to pay interest
at a floor rate of approximately 6%.

      In  November  1996, Banner entered into an additional  hedge  agreement
("Additional  Hedge  Agreement") with one of its  major  lenders  to  provide
interest  rate  protection on $20,000 of debt for a period  of  three  years.
Effectively, the Additional Hedge Agreement provides for a cap of 7  1/4%  if
the  90-day LIBOR exceeds 7 1/4%.  If the 90-day LIBOR drops below 5%, Banner
will  be  required to pay interest at a floor rate of approximately  6%.   No
cash outlay was required to obtain the Additional Hedge Agreement as the cost
of the cap was offset by the sale of the floor.

      The  Company  recognizes interest expense under the provisions  of  the
Hedge  Agreements and the Additional Hedge Agreement based on the fixed rate.
The  Company is exposed to credit loss in the event of non-performance by the
lenders; however, such non-performance is not anticipated.

      The  following table summarizes the Credit Facilities under the  Credit
Agreements at June 30, 1997:
<TABLE>
<CAPTION>

                                                      
                                           Revolving   Term    Total
                                             Credit    Loan   Available
                                        Facilities Facilities Facilities
<S>                                        <C>       <C>       <C>
 RHI Holdings, Inc.                                                  
     Revolving credit facility            $     100   $    -   $4,250
 Fairchild Holding Corp.                                             
     Revolving credit facility               30,900        -   52,000
 Banner Aerospace, Inc.                                              
     Revolving credit facility               32,000        -   71,500
     Term Loan                                    -   44,500   44,500
     Tranche B Loan                               -   29,850   29,850
     Tranche C Loan                               -   40,000   40,000
 Total                                    $  63,000 $114,350 $242,100
</TABLE>

      At  June  30,  1997, the Company had letters of credit  outstanding  of
$10,811,  which  were  supported  by the  Credit  Agreement  and  other  bank
facilities  on an unsecured basis.  At June 30, 1997, the Company had  unused
bank  lines of credit aggregating $53,939, at interest rates slightly  higher
than  the  prime  rate.   The  Company also has short-term  lines  of  credit
relating to foreign operations, aggregating $9,350, against which the Company
owed $5,967 at June 30, 1997.

     Summarized below are certain items and other information relating to the
debt outstanding at June 30, 1997:
<TABLE>
<CAPTION>

                                      12%          13%          11 7/8%
                         13 1/8%      Intermediate Junior       RHI Senior
                        Subordinated  Subordinated Subordinated Subordinated
                        Debentures    Debentures   Debentures   Debentures
<S>                     <C>           <C>          <C>          <C>
Date Issued             March 1986    Oct. 1986    March 1987   March 1987
Face Value              $   75,000    $ 160,000    $  102,000   $  126,000
 Balance June 30, 1997  $   35,188    $ 115,359    $   24,834   $   85,852
Percent Issued at           95.769%      93.470%       98.230%      99.214%
Bond Discount           $    3,173    $   10,448   $    1,805   $      990
Amortization 1995       $      103    $      687   $       27   $       94
1996                    $      118    $      761   $       30   $       82
1997                    $      127    $      864   $       34   $       82
Yield to Maturity            13.80%        13.06%       13.27%       12.01%
Interest Payments       Semi-Annual   Semi-Annual   Semi-Annual  Semi-Annual
Sinking Fund Start Date     3/15/97      10/15/97        3/1/98       3/1/97
Sinking Fund
  Installments          $    7,500    $   32,000    $   10,200  $   31,500
Fiscal Year Maturity          2006          2002          2007        1999
Callable Option on         3/15/89      10/15/89        3/1/92      3/1/92
</TABLE>


      Under  the  most  restrictive covenants of the  above  indentures,  the
Company's consolidated net worth, as defined, must not be less than  $35,000.
RHI's  consolidated net worth must not be less than $125,000.   At  June  30,
1997, consolidated net worth was $229,625 at the Company and $438,830 at RHI.
At the present time, none of the Company's consolidated retained earnings are
available for capital distributions due to a cumulative earnings restriction.
The  indentures  also  provide  restrictions  on  the  amount  of  additional
borrowings by the Company.

      The annual maturity of long-term debt obligations (exclusive of capital
lease obligations) for each of the five years following June 30, 1997, are as
follows:   $31,207 for 1998, $93,544 for 1999, $42,288 for 2000, $77,407  for
2001, and $77,772 for 2002.

11.  PENSIONS AND POSTRETIREMENT BENEFITS

     Pensions

      The  Company  and its subsidiaries have defined benefit  pension  plans
covering  most  of  its  employees.  Employees in  foreign  subsidiaries  may
participate in local pension plans, which are in the aggregate insignificant.
The  Company's  funding  policy is to make the  minimum  annual  contribution
required  by applicable regulations.  The following table provides a  summary
of the components of net periodic pension expense (income) for the plans:
<TABLE>
<CAPTION>

                                     1995   1996    1997
<S>                                 <C>     <C>     <C>
Service cost (current period
attribution)                       $ 3,917 $ 3,513 $ 2,521
 Interest cost of projected benefit                       
obligation                          14,860  14,499  15,791
 Actual return on plan assets      (14,526)(39,430)(31,400)
 Amortization of prior service cost     81      81    (180)
 Net amortization and deferral      (4,341)  21,495  11,157
                                       (9)      158  (2,111)
 Net periodic pension expense                             
(income) for other plans                78   (118)     142
including foreign plans
 Net periodic pension expense       
(income)                           $    69 $    40  $(1,969)
</TABLE>

     Assumptions used in accounting for the plans were:
<TABLE>
<CAPTION>

                                     1995   1996    1997
<S>                                 <C>     <C>     <C>
Discount rate                        8.5%   8.5%    7.75%
Expected rate of increase in         4.5%   4.5%    4.5%
salaries
Expected long-term rate of return    9.0%   9.0%    9.0%
on plan assets
</TABLE>

     In Fiscal 1996, the Company recognized one-time charges of $857 from the
divestiture of subsidiaries, which resulted in a recognition of prior service
costs,  and  $84  from the early retirement window program at  the  Company's
corporate  office.  The reduction in liabilities due from  the  cessation  of
future  salary increases is not immediately recognizable in income, but  will
be  used as an offset against existing unrecognized losses.  The Company will
have  a future savings benefit from a lower net periodic pension cost due  to
the amortization of a smaller unrecognized loss.

      The following table sets forth the funded status and amounts recognized
in  the Company's consolidated balance sheets at June 30, 1996, and 1997, for
the plans:
<TABLE>
<CAPTION>

                                           June 30,June 30,
                                             1996    1997
Actuarial present value of benefit                         
obligations:
<S>                                        <C>      <C>
 Vested                                   $164,819 $183,646
 Nonvested                                   6,169    7,461
 Accumulated benefit obligation            170,988  191,107
 Effect of projected future compensation                   
increases                                      905      683
 Projected benefit obligation              171,893  191,790
 Plan assets at fair value                 224,692  237,480
 Plan assets in excess of projected                        
benefit obligations                         52,799   45,690
 Unrecognized net loss                      20,471   29,592
 Unrecognized prior service cost              (354)    (571)
 Unrecognized net transition assets           (608)    (315)
 Prepaid pension cost prior to SFAS 109                    
implementation                              72,308   74,396
 Effect of SFAS 109 implementation         (14,648) (14,654)
 Prepaid pension cost                    $  57,660  $ 59,742
</TABLE>

     Plan assets include Class A Common Stock of the Company valued at a fair
market value of $11,094 and  $26,287 at June 30, 1996 and 1997, respectively.
Substantially all of the plan assets are invested in listed stocks and bonds.

     Postretirement Health Care Benefits

      The  Company provides health care benefits for most retired  employees.
Postretirement health care expense from continuing operations  totaled  $701,
$779,  and  $642  for  1995, 1996 and 1997, respectively.   The  Company  has
accrued  approximately  $36,995 and $34,965 as of June  30,  1996  and  1997,
respectively, for postretirement health care benefits related to discontinued
operations.  This represents the cumulative discounted value of the long-term
obligation  and includes interest expense of $3,872, $3,877, and  $3,349  for
the  years  ended June 30, 1995, 1996 and 1997, respectively.  The components
of expense in Fiscal 1995, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>

                                             1995    1996     1997
<S>                                        <C>      <C>      <C>
 Service cost of benefits earned           $   321  $   281  $   140
 Interest cost on liabilities                4,385    4,377    3,940
 Net amortization and deferral                (133)      (2)     (89)
 Net periodic postretirement benefit cost  $ 4,573  $ 4,656  $ 3,991
</TABLE>

      A  one-time  credit  of  $3,938, resulting  from  the  divestitures  of
subsidiaries,  was  offset  by $4,361 from DME's  accumulated  postretirement
benefit obligation for active employees, which was transferred to CMI as part
of  the sale.  The Company recognized the net effect of $423 as an expense in
1996.

      The  following  table sets forth the funded status  for  the  Company's
postretirement health care benefit plans at June 30,:
<TABLE>
<CAPTION>

                                             1996    1997
<S>                                        <C>      <C>
Accumulated postretirement benefit                         
obligations:
 Retirees                                  $46,846  $48,145
 Fully eligible active participants            347      390
 Other active participants                   1,887    2,335
 Accumulated postretirement benefit
  obligation                                49,080   50,870
 Unrecognized net loss                       2,086    6,173
 Accrued postretirement benefit liability  $46,994  $44,697
</TABLE>

     The accumulated postretirement benefit obligation was determined using a
discount rate of 7.75%, and a health care cost trend rate of 7.0% for pre-age-
65  and post-age-65 employees, respectively, gradually decreasing to 5.5%  in
the year 2003 and thereafter.

     Increasing the assumed health care cost trend rates by 1% would increase
the  accumulated postretirement benefit obligation as of June  30,  1997,  by
approximately  $1,871,  and increase the net periodic postretirement  benefit
cost by approximately $132 for Fiscal 1997.

12.  INCOME TAXES

      The provision (benefit) for income taxes from continuing operations  is
summarized as follows:
<TABLE>
<CAPTION>

                               1995    1996     1997
<S>                          <C>      <C>      <C>
 Current:                                             
     Federal                $(7,956) $(40,640) $ 5,612)                                            )
     State                      424     1,203    1,197
     Foreign                  1,191    (3,805)     (49)
                                                      
                             (6,341) (43,242)    6,760
 Deferred:                                            
     Federal                (24,754)   17,060 (15,939)
     State                   (2,052)  (3,657)    3,444
                                    
                            (26,806)   13,403 (12,495)
 Net tax benefit           $(33,147) $(29,839)$(5,735)
</TABLE>


      The  income  tax provision (benefit) for continuing operations  differs
from  that  computed using the statutory Federal income tax rate of  35%,  in
Fiscal 1995, 1996 and 1997, for the following reasons:
<TABLE>
<CAPTION>

                                          1995     1996    1997
<S>                                     <C>      <C>       <C>
Computed statutory amount              $(31,299) $(21,709) $(1,372)
 State income taxes, net of applicable                           
federal tax benefit                      (1,794)     782      778
 Nondeductible acquisition valuation                             
items                                      1,420   1,329    1,064
 Tax on foreign earnings, net of tax                             
credits                                    2,965   1,711  (1,938)
 Difference between book and tax basis                           
of assets acquired and                     1,366   1,040  (1,102)
    liabilities assumed
 Revision of estimate for tax accruals    (5,000) (3,500)  (5,335)
 Other                                      (805)  (9,492)    2,170
 Net tax benefit                        $(33,147) $(29,839  $(5,735)
</TABLE>

      The  following table is a summary of the significant components of  the
Company's  deferred  tax assets and liabilities, and  deferred  provision  or
benefit for the following periods:
<TABLE>
<CAPTION>

                           1995    1996                1997       
                         Deferred  Deferred            Deferred      
                       (Provision) (Provision) June 30,(Provision)  June 30,
                         Benefit   Benefit     1996    Benefit      1997
<S>                      <C>      <C>          <C>      <C>         <C>
 Deferred tax assets:                                              
 Accrued expenses        $(2,218) $(1,643)  $5,936     $  504      $ 6,440
 Asset basis differences  (7,292)   1,787    2,064     (1,492)         572
 Inventory                     -        -        -      2,198        2,198
 Employee compensation                                             
and benefits                  106     (26)   5,408       (267)       5,141
 Environmental reserves    (1,202)   (737)   4,512     (1,253)       3,259
 Loss and credit                                                   
carryforward               17,991 (23,229)   8,796     (8,796)       -
 Postretirement benefits      514  (1,273)  19,334        138       19,472
 Other                      1,530   2,186    5,519      2,079        7,598
                                                                   
                            9,429 (22,935)  51,569     (6,889)      44,680
 Deferred tax liabilities:
 Asset basis differences    4,129  16,602  (22,565)    (3,855)     (26,420)
 Inventory                  3,176   4,684   (2,010)     2,010       -
 Pensions                   1,074   1,516  (18,243)    (1,038)     (19,281)
 Other                      8,998 (13,270) (29,507)    22,267       (7,240)
                                                                   
                           17,377    9,532 (72,325)    19,384      (52,941)
 Net deferred tax         
liability                 $26,806 $(13,403)$(20,756) $ 12,495     $ (8,261)
</TABLE>

The amounts included in the balance sheet are as follows:
<TABLE>
<CAPTION>

                                      June 30,    June 30,
                                      1996    1997
<S>                                 <C>      <C>
 Prepaid expenses and other current                 
assets:
 Current deferred                  $   8,012 $  11,307
 Income taxes payable:                              
 Current deferred                     20,797    (2,735)
 Other current                         3,838     8,598
                                   $  24,635 $   5,863
 Noncurrent income tax liabilities:                 
 Noncurrent deferred               $   7,971 $  22,303
 Other noncurrent                     23,766    19,710
                                   $  31,737 $  42,013
</TABLE>

      The  1995,  1996  and  1997 net tax benefits  include  the  results  of
reversing  $5,000, $3,500 and $5,335, respectively, of federal  income  taxes
previously  provided  for  due to a change in the estimate  of  required  tax
accruals.

      Domestic  income  taxes, less available credits, are  provided  on  the
unremitted  income of foreign subsidiaries and affiliated companies,  to  the
extent that such earnings are intended to be repatriated.  No domestic income
taxes or foreign withholding taxes are provided on the undistributed earnings
of  foreign  subsidiaries  and affiliates, which are  considered  permanently
invested, or which would be offset by allowable foreign tax credits.  At June
30,  1997,  the  amount of domestic taxes payable upon distribution  of  such
earnings was not significant.

      In  the opinion of management, adequate provision has been made for all
income taxes and interest, and any liability that may arise for prior periods
will  not  have  a material effect on the financial condition or  results  of
operations of the Company.

13.  MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES

     On June 30, 1997, the Company had $68,309 of minority interest, of which
$67,649 represents Banner.  Minority shareholders hold approximately 40.7% of
Banner's outstanding common stock.

14.  EQUITY SECURITIES

      The Company had 13,992,283 shares of Class A common stock and 2,632,516
shares  of Class B common stock outstanding at June 30, 1997.  Class A common
stock  is traded on both the New York and Pacific Stock Exchanges.  There  is
no  public  market for the Class B common stock.  Shares of  Class  A  common
stock  are entitled to one vote per share and cannot be exchanged for  shares
of  Class B common stock.  Shares of Class B common stock are entitled to ten
votes  per  share and can be exchanged, at any time, for shares  of  Class  A
common  stock on a share-for-share basis.  In Fiscal 1997, 234,935 shares  of
Class A Common Stock were issued as a result of the exercise of stock options
and shareholders converted 1,188 shares of Class B common stock into Class  A
common stock.

      RHI  holds an investment of 4,319,423 shares of the Company's  Class  A
common  stock.   At  June  30,  1997, RHI's market  value  was  approximately
$78,649.   The Company accounts for the Class A common stock held by  RHI  as
Treasury Stock.

15.  STOCK OPTIONS AND WARRANTS

     Stock Options

      The  Company's 1986 Non-Qualified and Incentive Stock Option Plan  (the
"1986  Plan"), authorizes the issuance of 4,320,000 shares of Class A  Common
Stock  upon  the exercise of stock options issued under the 1986  Plan.   The
purpose  of the 1986 Plan is to encourage continued employment and  ownership
of  Class A Common Stock by officers and key employees of the Company and its
subsidiaries, and provide additional incentive to promote the success of  the
Company.   At  the Company's 1996 annual meeting, the Company's  stockholders
approved  an extension of the expiration date of the 1986 Plan from April  9,
1996  to April 9, 2006.  The 1986 Plan authorizes the granting of options  at
not  less than the market value of the common stock at the time of the grant.
The  option  price is payable in cash or, with the approval of the  Company's
Compensation and Stock Option Committee of the Board of Directors, in  shares
of  common  stock, valued at fair market value at the time of exercise.   The
options  normally  terminate five years from the date of  grant,  subject  to
extension  of  up  to 10 years or for a stipulated period of  time  after  an
employee's death or termination of employment.

      At  the  Company's  1996  annual meeting,  the  Company's  stockholders
approved  the  1996 Non-Employee Directors Stock Option Plan (the  "1996  NED
Plan").  The ten-year 1996 NED Plan authorizes the issuance of 250,000 shares
of  Class A Common Stock upon the exercise of stock options issued under  the
1996  NED Plan.  The 1996 NED Plan authorizes the granting of options at  the
market  value  of  the common stock on the date of grant.  An  initial  stock
option  grant for 30,000 shares of Class A Common Stock will be made to  each
person  who  becomes  a new non-employee Director, on  such  date,  with  the
options  to vest 25% each year from the date of grant.  On the date  of  each
annual  meeting,  each  person  elected as a non-employee  Director  at  such
meeting  will be granted an option for 1,000 shares of Class A Common  Stock,
which will vest immediately.  The exercise price is payable in cash or,  with
the  approval of the Stock Option Committee, in shares of Class A or Class  B
Common  Stock,  valued  at fair market value at the date  of  exercise.   All
options  issued  under the 1996 NED Plan will terminate five years  from  the
date  of  grant or a stipulated period of time after a Non-Employee  Director
ceases  to  be  a  member of the Board.  The 1996 NED  Plan  is  designed  to
maintain  the  Company's ability to attract and retain highly  qualified  and
competent persons to serve as outside directors of the Company.

      On November 17, 1994, the Company's stockholders approved the grant  of
stock  options  of  190,000 shares to outside Directors  of  the  Company  to
replace  expired stock options.  These stock options expire five  years  from
the date of the grant.

     Summaries of stock option transactions under the 1986 Plan, the 1996 NED
Plan, and prior plans are presented in the following tables:
<TABLE>
<CAPTION>

                                                 
                                             Weighted
                                              Average
                                             Exercise
                                      Shares   Price
<S>                                 <C>       <C>
Outstanding at July 1, 1994        1,520,706  $  5.57
    Granted                          356,600     3.78
    Expired                         (116,875)    5.44
    Forfeited                        (60,650)    5.94
Outstanding at June 30, 1995       1,699,781     5.14
    Granted                          540,078     4.33
    Exercised                       (286,869)    5.26
    Expired                         (659,850)    6.06
    Forfeited                        (19,653)    4.30
Outstanding at June 30, 1996       1,273,487     4.27
    Granted                          457,350    14.88
    Exercised                       (234,935)    4.79
    Expired                           (1,050)    4.59
    Forfeited                         (9,412)    3.59
Outstanding at June 30, 1997       1,485,440  $  7.46
Exercisable at June 30, 1995       1,159,306  $  5.68
Exercisable at June 30, 1996         399,022  $  4.59
Exercisable at June 30, 1997         486,855  $  4.95
</TABLE>

      A  summary  of  options outstanding at June 30, 1997  is  presented  as
follows:
<TABLE>
<CAPTION>

                   Options Outstanding                 Options Exercisable
                           Weighted  Average                       Weighted
                           Average   Remaining                     Average
   Range of      Number    Exercise  Contract        Number        Exercise
Exercise Prices Outstanding Price     Life           Exercisable   Price
<S>             <C>       <C>     <C>        <C>     <C>  <C>
$3.50 - $8.625  1,022,700 $ 4.10      2.6 years       452,509     $   4.10
$13.625-$16.25    462,740 $14.89      4.4 years        34,346     $  16.19
$3.50 - $16.25  1,485,440 $ 7.46      3.2 years       486,855     $   4.95
</TABLE>

      The  weighted  average grant date fair value of options granted  during
1996  and  1997  was $1.95and $6.90, respectively.  The fair  value  of  each
option  granted is estimated on the grant date using the Black-Scholes option
pricing model.  The following significant assumptions were made in estimating
fair value:
[CAPTION]
<TABLE>

                                   1996        1997
<S>                             <C>         <C>
Risk-free interest rate        5.5%-6.6%    6.0%-6.7%
Expected life in years             4.27        4.65
Expected volatility            46% - 47%    43% - 45%
Expected dividends                  none        none
</TABLE>

      The  Company applies APB Opinion 25 in accounting for its stock  option
plans.   Accordingly, no compensation cost has been recognized for the  stock
option plans in 1996 or 1997. If stock options granted in 1996 and 1997  were
accounted  for  based on their fair value as determined under SFAS  123,  pro
forma earnings would be as follows:
<TABLE>
<CAPTION>

                                  1996     1997
<S>                             <C>      <C>
Net earnings:                                    
    As reported                 $189,706  $ 1,331
    Pro forma                    189,460      283
Basic earnings per share:                        
    As reported                 $  11.71  $  0.08
    Pro forma                      11.69     0.02
Diluted earnings per share:                      
    As reported                 $  11.71  $  0.08
    Pro forma                      11.69     0.02
</TABLE>

     The pro forma effects of applying SFAS 123 are not representative of the
effects  on  reported  net  earnings for  future  years.   SFAS  123  is  not
applicable  to  awards made prior to 1996, and additional  awards  in  future
years are expected.

     Stock Warrants

      On  April  25,  1997, the Company issued warrants to  purchase  100,000
shares  of  Class  A Common Stock, at $12.25 per share, to  Dunstan  Ltd.  as
incentive  remuneration  for  the performance of certain  investment  banking
services.   The warrants may be earned on a pro-rata basis over  a  six-month
period  ending October 31, 1997.  The warrants become exercisable on November
1,  1997  and  expire on November 8, 2000.  The Company recorded  a  selling,
general & administrative expense of $191 in 1997 for stock warrants earned in
1997 based on a grant-date fair value of $5.46.

     Effective as of February 21, 1997, the Company approved the continuation
of  an  existing warrant to Stinbes Limited (an affiliate of Jeffrey Steiner)
to  purchase 375,000 shares of the Company's Class A or Class B Common  Stock
at  $7.67 per share.  The warrant was modified to extend the exercise  period
from Mach 13, 1997, to March 13, 2002, and to increase the exercise price per
share  by $.002 for each day subsequent to March 13, 1997, but fixed at $7.80
per  share  after  June 30, 1997.  In addition, the warrant was  modified  to
provide  that  the warrant may not be exercised except within  the  following
window  periods:   (i) within 365 days after the merger  of  STFI  with  AT&T
Corporation, MCI Communications, Worldcom Inc., Tel-Save Holdings,  Inc.,  or
Teleport  Communications Group, Inc.; (ii) within 365 days after a change  of
control  of  the  Company, as defined in the FHC Credit Agreement;  or  (iii)
within 365 days after a change of control of Banner, as defined in the Banner
Credit  Agreement.  In no event may the warrant be exercised after March  13,
2002.

      On  November  9, 1995, the Company issued warrants to purchase  500,000
shares  of  Class  A  Common Stock, at $9.00 per share, to  Peregrine  Direct
Investments  Limited ("Peregrine"), in exchange for a standby  commitment  it
received  on  November 8, 1995, from Peregrine.  The Company elected  not  to
exercise  its  rights  under  the Peregrine  commitment.   The  warrants  are
immediately exercisable and will expire on November 8, 2000.

      On  February  21, 1996, the Company issued warrants to purchase  25,000
shares  of  Class  A Common Stock, at $9.00 per share, to a non-employee  for
services  provided  in  connection with the Company's various  dealings  with
Peregrine.   The warrants issued are immediately exercisable and will  expire
on November 8, 2000.

      The Company recorded nonrecurring expenses of $1,148 for the grant date
fair value of the stock warrants issued in 1996.  The warrants issued in 1996
were outstanding at June 30, 1997.

16.  FAIR VALUE OF FINANCIAL INSTRUMENTS

      Statement  of  Financial Accounting Standards  No.  107,  ("SFAS  107")
"Disclosures about Fair Value of Financial Instruments", requires disclosures
of  fair  value  information  about financial  instruments,  whether  or  not
recognized in the balance sheet, for which it is practicable to estimate that
value.   In  cases where quoted market prices are not available, fair  values
are  based  on  estimates using present value or other valuation  techniques.
Those   techniques  are  significantly  affected  by  the  assumptions  used,
including discount rate and estimates of future cash flows.  In that  regard,
the  derived  fair value estimates cannot be substantiated by  comparison  to
independent  markets and, in many cases, could not be realized  in  immediate
settlement   of   the  instrument.   SFAS  107  excludes  certain   financial
instruments   and   all   non-financial  instruments  from   its   disclosure
requirements.  Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.

      The  following  methods and assumptions were used  by  the  Company  in
estimating its fair value disclosures for financial instruments:

      The carrying amount reported in the balance sheet approximates the fair
value   for  cash  and  cash  equivalents,  short-term  borrowings,   current
maturities  of  long-term debt, and all other variable rate  debt  (including
borrowings under the Credit Agreements).

      Fair values for equity securities, and long-term public debt issued  by
the  Company are based on quoted market prices, where available.  For  equity
securities  not  actively traded, fair values are estimated by  using  quoted
market  prices  of  comparable  instruments or,  if  there  are  no  relevant
comparable   instruments,  on  pricing  models  or  formulas  using   current
assumptions.  The fair value of limited partnerships, other investments,  and
notes  receivable  are estimated by discounting expected  future  cash  flows
using  a current market rate applicable to the yield, considering the  credit
quality and maturity of the investment.

      The  fair  value for the Company's other fixed rate long-term  debt  is
estimated using discounted cash flow analyses, based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.

      Fair values for the Company's off-balance-sheet instruments (letters of
credit, commitments to extend credit, and lease guarantees) are based on fees
currently  charged to enter into similar agreements, taking into account  the
remaining  terms of the agreements and the counter parties' credit  standing.
The  fair  value of the Company's off-balance-sheet instruments at  June  30,
1997, was not material.

      The  carrying  amounts  and  fair values  of  the  Company's  financial
instruments at June 30, 1996 and 1997, are as follows:
<TABLE>
<CAPTION>

                                 June 30, 1996    June 30, 1997
                                Carrying Fair   Carrying Fair
                                 Amount  Value   Amount  Value
<S>                             <C>      <C>      <C>      <C>
 Cash and cash equivalents     $ 39,649 $39,649 $19,420 $19,420
 Investment securities:                                        
 Short-term equity securities    10,362  10,362  16,094  16,122
 Short-term other investments       136     167   9,553   9,592
 Long-term other investments        585   1,451   4,120   4,617
 Notes receivable:                                             
 Current                        170,384 170,384       -       -
 Long-term                        3,702   3,702   1,300   1,300
 Short-term debt                 76,321  76,321  15,529  15,529
 Long-term debt:                                               
 Bank credit agreement          112,500 112,500 177,250 177,250
 Senior notes and subordinated                                 
debentures                      260,125 264,759 261,233 270,995
 Industrial revenue bonds         1,500   1,500   1,500   1,500
 Capitalized leases                  65      65   1,897   1,897
 Other                            1,595   1,595   6,835   6,835
</TABLE>

17.  RESTRUCTURING CHARGES

      In  Fiscal  1996,  the Company recorded restructuring  charges  in  the
Aerospace  Fasteners  segment  in  the categories  shown  below.   All  costs
classified as restructuring were the direct result of formal plans  to  close
plants, to terminate employees, or to exit product lines.  Substantially  all
of  these  plans have been executed.  Other than a reduction in the Company's
existing cost structure and manufacturing capacity, none of the restructuring
charges resulted in future increases in earnings or represented an accrual of
future  costs.   The  costs  included  in  restructuring  were  predominately
nonrecurring in nature and consisted of the following significant components:
<TABLE>
<CAPTION>

<S>                                                           <C>
Write down of inventory to net realizable value related to      
discontinued product lines (a)                               $    156
Write down of fixed assets related to discontinued product           
lines                                                             270
Severance benefits for terminated employees (substantially           
all paid within twelve months)                                  1,368
Plant closings facility costs (b)                                 389
Contract termination claims                                       136
                                                              $ 2,319
</TABLE>

(a)  Write down was required because product line was discontinued.
(b)  Includes   lease  settlements,  write-off  of  leasehold   improvements,
     maintenance, restoration and clean up costs.

18.  RELATED PARTY TRANSACTIONS

      Corporate  office  administrative  expense  recorded  by  FHC  and  its
predecessors was billed to the Company on a monthly basis during  1995,  1996
and  1997.  These costs represent the cost of services incurred on behalf  of
affiliated companies.  Each of these affiliated companies has reimbursed  FHC
for such services.

      The Company and its wholly-owned subsidiaries are all parties to a  tax
sharing agreement whereby the Company files a consolidated federal income tax
return.  Each subsidiary makes payments to the Company based on the amount of
federal income taxes, if any, the subsidiary would have paid if it had  filed
a separate tax return.

     Prior to the consolidation of Banner on February 25, 1996, the Aerospace
Fasteners  segment had sales to Banner of $5,494 and $3,663 in  Fiscal  1995,
and 1996, respectively.

19. LEASES

      The  Company holds certain of its facilities and equipment under  long-
term  leases.  The minimum rental commitments under non-cancelable  operating
leases  with  lease-terms in excess of one year, for each of the  five  years
following  June 30, 1997, are as follows: $5,182 for 1998, $4,127  for  1999,
$2,937  for  2000, $2,271 for 2001, and $1,732 for 2002.  Rental  expense  on
operating  leases from continuing operations for Fiscal 1995, 1996  and  1997
was  $6,695,  $6,197,  and $4,928, respectively.  Minimum  commitments  under
capital  leases for each of the five years following June 30, 1997, was  $651
for  1998,  $693 for 1999, $262 for 2000, $210 for 2001, and $137  for  2002,
respectively.  At  June  30,  1997,  the  present  value  of  capital   lease
obligations was $1,897. At June 30, 1997, capital assets leased, included  in
property, plant, and equipment consisted of:
<TABLE>
<CAPTION>

<S>                                 <C>
Buildings and improvements         $ 1,396
Machinery and equipment              8,017
Furniture and fixtures                 114
Less: Accumulated depreciation      (7,700)
                                   $ 1,827
</TABLE>

20.  CONTINGENCIES

     CL Motor Freight ("CL") Litigation

      The  Workers  Compensation  Bureau of the  State  of  Ohio  is  seeking
reimbursement  from the Company for up to $5,400 for CL workers  compensation
claims  which were insured under a self-insured program of CL.   The  Company
has  contested  a  significant portion of this claim and  believes  that  the
ultimate disposition of this claim will not be material.

     Government Claims

     The Corporate Administrative Contracting Officer (the "ACO"), based upon
the  advice  of the United States Defense Contract Audit Agency, has  made  a
determination  that  FII did not comply with Federal Acquisition  Regulations
and Cost Accounting Standards in accounting for (i) the 1985 reversion to FII
of  certain  assets  of terminated defined benefit pension  plans,  and  (ii)
pension  costs upon the closing of segments of FII's business.  The  ACO  has
directed  FII  to  prepare  cost  impact  proposals  relating  to  such  plan
terminations and segment closings and, following receipt of such cost  impact
proposals,  may  seek adjustments to contract prices.  The ACO  alleges  that
substantial  amounts will be due if such adjustments are  made,  however,  an
estimate  of  the  possible loss or range of loss from  the  ACO's  assertion
cannot be made.  The Company believes it has properly accounted for the asset
reversions  in accordance with applicable accounting standards.  The  Company
has  held discussions with the government to attempt to resolve these pension
accounting issues.

     Environmental Matters

      The  Company's operations are subject to stringent Federal,  state  and
local environmental laws and regulations concerning, among other things,  the
discharge  of  materials into the environment and the  generation,  handling,
storage,  transportation and disposal of waste and hazardous  materials.   To
date,  such  laws  and  regulations have not had a  material  effect  on  the
financial condition, results of operations, or net cash flows of the Company,
although  the  Company has expended, and can be expected  to  expend  in  the
future, significant amounts for investigation of environmental conditions and
installation   of   environmental   control   facilities,   remediation    of
environmental  conditions  and  other similar matters,  particularly  in  the
Aerospace Fasteners segment.

      In  connection  with its plans to dispose of certain real  estate,  the
Company must investigate environmental conditions and may be required to take
certain  corrective  action prior or pursuant to any  such  disposition.   In
addition,  management has identified several areas of potential contamination
at  or from other facilities owned, or previously owned, by the Company, that
may require the Company either to take corrective action or to contribute  to
a  clean-up.   The  Company  is  also a defendant  in  certain  lawsuits  and
proceedings  seeking  to  require the Company to  pay  for  investigation  or
remediation of environmental matters and has been alleged to be a potentially
responsible  party at various "Superfund" sites.  Management of  the  Company
believes  that it has recorded adequate reserves in its financial  statements
to  complete such investigation and take any necessary corrective actions  or
make  any necessary contributions.  No amounts have been recorded as due from
third  parties, including insurers, or set off against, any liability of  the
Company,  unless such parties are contractually obligated to  contribute  and
are not disputing such liability.

      As of June 30, 1997, the consolidated total recorded liabilities of the
Company for environmental matters approximated $8,420, which represented  the
estimated  probable  exposures for these matters.  It is reasonably  possible
that  the  Company's total exposure for these matters could be  approximately
13,200 on an undiscounted basis.

     Other Matters

      The Company is involved in various other claims and lawsuits incidental
to  its  business, some of which involve substantial amounts.   The  Company,
either  on  its  own or through its insurance carriers, is  contesting  these
matters.  In the opinion of management, the ultimate resolution of the  legal
proceedings, including those aforementioned, will not have a material adverse
effect  on  the financial condition, or future results of operations  or  net
cash flows of the Company.

21.  BUSINESS SEGMENT INFORMATION

      The  Company reports in two principal business segments. The  Aerospace
Fasteners  segment  includes  the manufacture of high  performance  specialty
fasteners   and  fastening  systems.   The  Aerospace  Distribution   segment
distributes  a wide range of aircraft parts and related support  services  to
the  aerospace  industry.  The results of Fairchild  Technologies,  which  is
primarily engaged in the designing and manufacturing of capital equipment and
systems  for recordable compact disc and advance semiconductor manufacturing,
were  previously reported under Corporate and Other, along with  results  two
smaller  operations.  Fairchild Technologies is now recorded in  discontinued
operations.

     The Company's financial data by business segment is as follows:
<TABLE>
<CAPTION>

                                      1995     1996     1997
<S>                                 <C>       <C>       <C>
 Sales:                                                       
     Aerospace Fasteners            $215,364 $218,059 $269,026
     Aerospace Distribution (a)            -  129,973  411,765
     Corporate and Other               4,987    7,046   15,185
     Eliminations (b)                       -  (5,842) (15,213)
 Total Sales                         $220,351 $349,236 $680,763
 Operating Income (Loss):                                     
     Aerospace Fasteners             $(11,497)$    135 $ 17,390
     Aerospace Distribution (a)             -    5,625   30,891
     Corporate and Other              (18,836) (17,046) (14,782)
 Operating Income (Loss)             $(30,333)$(11,286)$ 33,499
 Capital Expenditures:                                        
     Aerospace Fasteners             $  4,974 $  3,841 $  8,964
     Aerospace Distribution                 -    1,556    4,787
     Corporate and Other                  409      283    1,263
 Total Capital Expenditures          $  5,383 $  5,680 $ 15,014
 Depreciation and Amortization:                               
     Aerospace Fasteners             $ 15,619 $ 14,916 $ 16,112
     Aerospace Distribution                 -    1,341    5,138
     Corporate and Other                4,884    4,788    3,057
 Total Depreciation and           
Amortization                         $ 20,503 $ 21,045 $ 24,307
 Identifiable Assets at June 30:                              
     Aerospace Fasteners             $290,465 $252,200 $346,533
     Aerospace Distribution                 -  329,477  428,436
     Corporate and Other              538,215  411,721  277,697
 Total Identifiable Assets           $828,680 $993,398 $1,052,666


(a)  Effective February 25, 1996, the Company became the majority shareholder
of  Banner  Aerospace,  Inc.  and,  accordingly,  began  consolidating  their
results.

(b) Represents intersegment sales from the Aerospace Fasteners segment to the
Aerospace Distribution segment.

(c) Includes restructuring charges of $2.3 million in Fiscal 1996.
</TABLE>

22.  FOREIGN OPERATIONS AND EXPORT SALES

      The Company's operations are located primarily in the United States and
Europe.   Inter-area  sales are not significant to the  total  sales  of  any
geographic  area.   The  Company's financial data by geographic  area  is  as
follows:
[CAPTION]
<TABLE>

                                      1995     1996     1997
<S>                                 <C>       <C>       <C>
Sales by Geographic Area:                                     
    United States                   $164,153 $292,136 $580,453
    Europe                            55,404   56,723  100,310
    Other                                794      377        -
Total Sales                         $220,351 $349,236 $680,763
Operating Income by Geographic                                
Area:
    United States                   $(30,537)$(12,175)$ 27,489
    Europe                               167    1,037    6,010
    Other                                 37    (148)        -
Total Operating Income              $(30,333)$(11,286)$ 33,499
Identifiable Assets by Geographic                             
Area at June 30:
    United States                   $760,756 $929,649 $855,233
    Europe                            69,027   63,749  197,433
    Other                             (1,103)        -        -
Total Identifiable Assets           $828,680 $993,398 $1,052,666
</TABLE>

      Export sales are defined as sales to customers in foreign countries  by
the Company's domestic operations.  Export sales amounted to the following:
<TABLE>
<CAPTION>

                                      1995     1996     1997
<S>                                 <C>       <C>       <C>
Export Sales                                                  
     Europe                         $13,329   $27,330   $48,187
     Asia (excluding Japan)           1,526     6,766    21,221
     Japan                            2,702    11,958    19,819
     Canada                           2,810     8,878    17,797
     Other                              911     8,565    15,907
Total Export Sales                  $21,278   $63,497  $122,931
</TABLE>

23.  QUARTERLY FINANCIAL DATA (UNAUDITED)

      The  following table of quarterly financial data has been prepared from
the  financial  records  of  the  Company without  audit,  and  reflects  all
adjustments  which are, in the opinion of management, necessary  for  a  fair
presentation of the results of operations for the interim periods presented:
<TABLE>
<CAPTION>

Fiscal 1996 quarters ended               Oct. 1   Dec. 31 March 31June 30
<S>                                     <C>      <C>       <C>      <C>
 Net sales                                     
                                        $ 53,015 $ 56,615 $92,973 $146,633
 Gross profit                                                             
                                           8,424   10,350  18,902   36,425
 Earnings (loss) from continuing                                          
operations                              (16,150) (12,918) (8,368)  (4,196)
    per share                                                             
                                          (0.82)   (0.81)  (0.50)   (0.24)
Earnings from discontinued operations,                                    
net                                       10,734    7,322   2,102  (4,546)
    per share                                                             
                                            0.48     0.46    0.11   (0.27)
Gain (loss) from disposal of                                              
discontinued operations, net                (20)      (7) 224,416  (7,673)
    per share                                                             
                                               -        -   13.51   (0.45)
Extraordinary items, net                                                  
                                               -        - (10,436)        -
    per share                                                             
                                               -        -  (0.62)        -
Net earnings (loss)                                                       
                                         (5,436)  (5,603) 207,714  (6,969)
    per share                                                             
                                          (0.34)   (0.35)   12.42   (0.41)
Market price range of Class A Stock:                                      
High                                       6        8 _    9 7/8   15 7/8
Low                                      2 7/8      4 _      8     9 1/4
Close                                    5 1/8      8 1/2  9 3/8   14 5/8
                                                                          
Fiscal 1997 quarters ended              Sept. 29  Dec. 29 March 30June 30
Net sales                                      $        $       $        $
                                         137,613  151,842 179,480  211,828
Gross profit                                                              
                                          37,092   36,785  47,552   59,915
Earnings (loss) from continuing                                           
operations                               (3,363)  (1,299)   (117)    6,595
    per share                                                             
                                          (0.20)   (0.08)  (0.01)     0.40
Earnings from discontinued operations,                                    
net                                      (1,255)  (1,678)     157    2,291
    per share                                                             
                                          (0.07)   (0.09)    0.01     0.14
Net earnings (loss)                                                       
                                         (4,618)  (2,977)      40    8,886
    per share                                                             
                                          (0.27)   (0.17)       -     0.52
Market price of Class A Stock:                                            
High                                       17      17 _    15 3/8    18
Low                                      12 1/4   14 3/8   12 7/8  11 5/8
Close                                      16     14 5/8   13 3/8    18
</TABLE>

      Included in earnings (loss) from continuing operations are (i) a $2,528
nonrecurring gain from the sale of SBC in the fourth quarter of Fiscal  1997,
and (ii) charges to reflect the cost of restructuring the Company's Aerospace
Fasteners  segment, of $285, $959 and $1,075 in the second, third and  fourth
quarters  of  Fiscal  1996,  respectively. Gain on disposal  of  discontinued
operations Includes $161,406 resulting primarily from the gain on the  merger
of FCSC with STI in the third quarter of Fiscal 1996 and the gain on the sale
of  DME.  Earnings from discontinued operations, net, includes the results of
DME  and Data in each Fiscal 1996 quarter. Extraordinary items relate to  the
early extinguishment of debt by the Company.  (See Note 7).

24.  SUBSEQUENT EVENTS

      Effective December 28, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" (SFAS 128). This statement
replaces  the  previously reported primary and fully diluted earnings  (loss)
per  share  with basic and diluted earnings (loss) per share. Unlike  primary
earnings  (loss)  per  share, basic earnings (loss) per  share  excludes  any
diluted effects of options. Diluted earnings (loss) per share is very similar
to  the  previously  reported fully diluted earnings (loss)  per  share.  All
earnings  (loss) per share have been restated to conform to the  requirements
of SFAS 128.

     The computation of diluted earnings (loss) per share for Fiscal 1995 and
1996  excluded  the effect of incremental common shares attributable  to  the
potential   exercise  of  common  stock  options  outstanding  and   warrants
outstanding,  because  their  effect was  antidilutive.  These  shares  could
potentially dilute basic earnings (loss) per share in the future.  Subsequent
to  June 30, 1997, the Company issued three million shares of Class A  common
stock  through  an  equity offering and also entered into a merger  agreement
which, as mentioned below, also increased the number of outstanding shares.

      On  November 20, 1997, Shared Technologies Fairchild Inc.  ("STFI"),  a
corporation  of  which the Company owns approximately 42% of the  outstanding
common  stock, entered into a merger agreement with Intermedia Communications
Inc.  ("Intermedia")  pursuant to which holders of  STFI  common  stock  will
receive  $15.00 per share in cash, (the "STFI Sale"). In connection with  the
STFI  Sale,  the  Company has received approximately  $108  million  in  cash
(before  tax) in exchange for certain preferred stock of STFI and expects  to
receive  an  additional $70 million in cash (before tax) in the  first  three
months  of 1998 in exchange for the 4,669,352 shares of common stock of  STFI
owned  by the Company. The Intermedia transaction replaces an earlier  merger
agreement with the Tel-Save Holdings, Inc. under which the Company would have
received consideration primarily in common stock of Tel-Save Holdings, Inc.

      The results of STFI have been accounted for as discontinued operations.
The  net  sales  of  STFI totaled, $108,710 and $91,290  in  1995  and  1996,
respectively. Net earnings from discontinued operations was,  $9,849,  $7,901
and  $3,149,  in  1995, 1996, and 1997, respectively.  Gain  on  disposal  of
discontinued  operations includes a $163,130 nontaxable gain  resulting  from
the Merger (See Note 3).

      On  December  19, 1997, the Company completed a secondary  offering  of
public securities.  The offering consisted of an issuance of 3,000,000 shares
of  the  Company's Class A Common Stock at $20.00 per share (the "Offering").
Immediately following the Offering, the Company restructured its FHC and  RHI
Credit  Agreements by entering into a new six-and-a-half-year credit facility
to  provide  the Company with a $300,000 senior secured credit facility  (the
"Facility")  consisting of (i) a $75,000 revolving  loan  with  a  letter  of
credit  sub-facility  of $30,000 and a $10,000 swing loan  sub-facility,  and
(ii) a $225,000 term loan.

      On January 13, 1998, certain subsidiaries (the "Selling Subsidiaries"),
of  Banner  Aerospace,  Inc. ("Banner", a majority-owned  subsidiary  of  the
Registrant), completed the disposition of substantially all of the assets and
certain   liabilities  of  the  Selling  Subsidiaries  to  two   wholly-owned
subsidiaries   of   AlliedSignal  Inc.  (the  "Buyers"),  in   exchange   for
unregistered shares of AlliedSignal Inc. common stock with an aggregate value
equal  to  $369,000 (the "Banner Hardware Group Disposition").  The  purchase
price received by the Selling Subsidiaries was based on the consolidated  net
worth  as reflected on an estimated closing date balance sheet for the assets
(and  liabilities) conveyed by the Selling Subsidiaries to the Buyers.   Such
estimated closing date balance sheet is subject to review by the parties, and
the  purchase price will be adjusted (up or down) based on the net  worth  as
reflected on the final closing date balance sheet. The assets transferred  to
the  Buyers consists primarily of Banner's hardware group, which includes the
distribution  of  bearings, nuts, bolts, screws, rivets  and  other  type  of
fasteners,  and its PacAero unit. Approximately $196,000 of the common  stock
received from the Buyers was used to repay outstanding term loans of Banner's
subsidiaries  and  related fees. Banner effected the  Banner  Hardware  Group
Disposition  to  concentrate  its efforts on  the  rotables  and  jet  engine
businesses  and  because  the Banner Hardware Group Disposition  presented  a
unique opportunity to realize a significant return on the disposition of  the
hardware group.

      On  February  3,  1998, with the proceeds of the  Offering,  term  loan
borrowings  under the Facility, and the after tax proceeds  the  Company  has
already received from the STFI Merger (collectively, the "Refinancing"),  the
Company refinanced substantially all of its existing indebtedness (other than
indebtedness  of  Banner), consisting of (i) $63,000 to redeem  the  11  7/8%
Senior  Debentures  due 1999; (ii) $117,600 to redeem  the  12%  Intermediate
Debentures  due  2001;  (iii)  $35,856 to redeem  the  13  1/8%  Subordinated
Debentures  due  2006;  (iv) $25,063 to redeem the  13%  Junior  Subordinated
Debentures due 2007; and (v) accrued interest of $10,562.

      On  January  28, 1998, the Company entered into a merger  agreement  to
acquire  Edwards and Lock Management Corporation, doing business as Special-T
Fasteners ("Special-T"), in a business combination to be accounted for  as  a
purchase.  Total cost of the acquisition will be approximately  $46,500,  and
will  be  funded  with $23,000 of available cash and $23,500 of  unregistered
shares  of the Company's Class A Common Stock.. The purchase price is subject
to  certain post-closing adjustments. Special-T is a distributor of aerospace
fasteners.  Special-T  distributes precision  fasteners  worldwide,  utilized
primarily  in  the  aerospace  industry, to both  government  and  commercial
manufacturers.

     Net sales of Fairchild Technologies ("Technologies") for 1995, 1996  and
1997  were  $36,489, $60,284, and $51,197, respectively.  For  the  Company's
fiscal  years  1995,  1996, and 1997, Technologies had  operating  losses  of
approximately of $1,483, $1,475, and $3,634, respectively.

      In  February  1998, the Company adopted a formal plan  to  enhance  the
opportunities for disposition of Technologies, while improving the ability of
Technologies  to operate more efficiently. The plan includes a  reduction  in
production  capacity  and  headcount at  Technologies,  and  the  pursuit  of
potential  vertical and horizontal integration with peers and competitors  of
the  two  divisions that constitute Technologies, or the inclusion  of  those
divisions  in the Spin-Off. If the Company elects to include Technologies  in
the  Spin-Off,  the Company believes that it would be required to  contribute
substantial   additional  resources  to  allow  Technologies  the   liquidity
necessary  to  sustain  and grow both the Fairchild  Technologies'  operating
divisions.

      In connection with the adoption of such plan, the Company will take  an
after-tax reserve of approximately $22 million in discontinued operations  in
the third fiscal quarter ending March 29, 1998, of which $14 million (net  of
income  tax  benefit  of  $4 million) relates to an  estimated  loss  on  the
disposal  of  certain  assets of Technologies, and $8 million  relates  to  a
provision  for  expected  operating losses over the  next  twelve  months  at
Technologies.  While the Company believes that $22 million  is  a  sufficient
charge  for  the  expected  losses  in connection  with  the  disposition  of
Technologies, there can be no assurance that the reserve is adequate.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     The following documents are filed as part of this Report:

(a)(1)  Financial Statements.

      All financial statements of the registrant as set forth under Item 8 of
this report on Form 10-K (see index on Page 15).

(a)(2)   Financial  Statement  Schedules and  Report  of  Independent  Public
Accountants.


Schedule Number               Description                        Page

      I                Condensed  Financial  Information  of  Parent  Company
53

    II              Valuation and Qualifying Accounts                  57


     All other schedules are omitted because they are not required.



                  Report of Independent Public Accountants



To The Fairchild Corporation:

We have audited in accordance with generally accepted auditing standards, the
consolidated   financial   statements  of  The  Fairchild   Corporation   and
subsidiaries  included in this Form 10-K and have issued our  report  thereon
dated  September 5, 1997 (except with the matters discussed  in  Note  24  to
those financial statements, as to which the date is February 28, 1998).   Our
audits were made for the purpose of forming an opinion on the basic financial
statements  taken  as  a whole.  The schedules listed in  the  index  on  the
preceding  page  is  the responsibility of the Company's  management  and  is
presented  for  the  purpose of complying with the  Securities  and  Exchange
Commission's  rules and is not part of the basic financial statements.   This
schedule has been subjected to the auditing procedures applied in the  audits
of  the basic financial statements and, in our opinion, fairly states in  all
material  respects  the financial data required to be set  forth  therein  in
relation to the basic financial statements taken as a whole.




                                                 Arthur Andersen LLP

Washington, D.C.
September 5, 1997

(except with respect to the matter discussed in
 Note 24, as to which the date is February 28, 1998)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
<TABLE>
                                      
                          THE FAIRCHILD CORPORATION
            CONDENSED FINANCIAL STATEMENTS OF THE PARENT COMPANY
                      BALANCE SHEETS (NOT CONSOLIDATED)
<CAPTION>
                               (In thousands)

                                                  June 30,   June 30,
                                                    1997       1996
<S>                                             <C>          <C>
                    ASSETS                                           
Current assets:                                                      
  Cash and cash equivalents                       $     234  $  1,887
  Accounts receivable                                   384       179
  Prepaid expenses and other current assets             250       192
Total current assets                                    868     2,258
                                                                     
Property, plant and equipment, less accumulated         486       628
depreciation
Investments in subsidiaries                         390,355   391,958
Investments and advances, affiliated companies        1,435     3,047
Goodwill                                              4,133     4,263
Noncurrent tax assets                                29,624    14,548
Other assets                                          2,403     3,510
Total assets                                      $ 429,304 $ 420,212
                                                                     
     LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current liabilities:                                                 
  Accounts payable and accrued expenses           $   8,315  $  7,735
Total current liabilities                             8,315     7,735
                                                                     
Long-term debt                                      190,567   180,141
Other long-term liabilities                             797     1,168
Total liabilities                                   199,679   189,044
Stockholders' equity:                                                
Class A common stock                                  2,023     2,000
Class B common stock                                    263       263
Retained earnings and other equity                  227,339   228,905
Total stockholders' equity                          229,625   231,168
Total liabilities and stockholders' equity       $  429,304  $420,212

The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>


                                                                   Schedule I
                                                                             
<TABLE>
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
              CONDENSED FINANCIAL STATEMENTS OF THE COMPANY
                  STATEMENT OF EARNINGS (NOT CONSOLIDATED)
                               (In thousands)
<CAPTION>                                                            
                                      
                                         For the Years Ended June 30,
                                          1997       1996     1995
<S>                                    <C>         <C>       <C>
Costs and Expenses:                                                  
  Selling, general & administrative          3,925    5,148     3,920
  Amortization of goodwill                     130      130       130
                                             4,055    5,278     4,050
                                                                     
Operating income                            (4,055)  (5,278)   (4,050)
Net interest expense                        25,252   28,387    29,027
                                                                     
Investment income, net                          16        1      (434)
Equity in earnings of affiliates               480      269      (409)
Nonrecurring expense                            --   (1,064)       --
Loss from continuing operations before     (28,811) (34,459)  (33,920)
taxes
Income tax provision (benefit)             (15,076) (12,509)  (18,838)
Loss before equity in earnings of          (13,735) (21,950)  (15,082)
subsidiaries
Equity in earnings of subsidiaries          15,066  211,656   (18,742)
Net earnings (loss)                          1,331  189,706   (33,824)
                                                                     

The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>

<TABLE>
                          THE FAIRCHILD CORPORATION
            CONDENSED FINANCIAL STATEMENTS OF THE PARENT COMPANY
                 STATEMENT OF CASH FLOWS (NOT CONSOLIDATED)
                               (IN THOUSANDS)
<CAPTION>

                                        For the Years Ended June 30,
                                          1997      1996      1995
<S>                                    <C>        <C>        <C>
Cash provided by (used for) operations  $(14,271  $ 36,916  $(9,607)
                                                                    
 Investing activities:                                              
   Equity investments in affiliates        2,092       (21)    1,356
                                           2,092       (21)    1,356
 Financing activities:                                              
   Proceeds from issuance of               9,400         -      7,400
intercompany debt                                    
   Debt repayments                            -    (42,265)        -  
   Issuance of common stock                1,126     1,509         - 
                                          10,526   (40,756)     7,400
 Net decrease in cash                    $(1,653)  $(3,861) $    (851)

The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>

                                                                   Schedule I
                                      
           THE FAIRCHILD CORPORATION AND CONSOLIDATED SUBSIDIARIES
                CONDENSED FINANCIAL STATEMENTS OF THE COMPANY
              NOTES TO FINANCIAL STATEMENTS (NOT CONSOLIDATED)
                               (In thousands)


1.   BASIS OF PRESENTATION

  In accordance with the requirements of Regulation S-X of the Securities and
  Exchange Commission, the financial statements of the Company are condensed
  and omit many disclosures presented in the consolidated financial
  statements and the notes thereto.

2.   LONG-TERM DEBT
<TABLE>
<CAPTION>

                                        June 30,   June 30,
                                          1997       1996
<S>                                    <C>        <C>
    12% Inter. Debentures Due 2001      $ 128,000 $ 123,600
    13 1/8% Sub. Debentures Due 2006       35,856    35,856
    13% Jr. Sub. Debenture Due 2007        30,063    25,063
                                        $ 193,919 $ 184,519
  </TABLE>
  
  Maturities of long-term debt for the next five years are as follows: no
  maturities in 1998, $30,335 in 1999, $31,520 in 2000, $31,713 in 2001, and
  $37,320 in 2002.
  
3.   DIVIDENDS FROM SUBSIDIARIES

  Cash dividends paid to The Fairchild Corporation by its consolidated
  subsidiaries were $10,000, $42,100, and $10,000 in Fiscal 1997, 1996, and
  1995, respectively.
  
4.   CONTINGENCIES
  
  The Company is involved in various other claims and lawsuits incidental  to
  its  business,  some  of which involve substantial amounts.   The  Company,
  either  on  its own or through its insurance carriers, is contesting  these
  matters.   In  the  opinion of management, the ultimate resolution  of  the
  legal  proceedings will not have a material adverse effect on the financial
  condition,  or  future  results of operations or  net  cash  flows  of  the
  Company.
  

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

     Changes in the allowance for doubtful accounts are as follows:
<TABLE>
<CAPTION>

                  For the Years Ended June 30,
                    1995   1996   1997
<S>                 <C>   <C>    <C>
 Beginning balance  $ 901 $2,738 $5,449
 Charges to cost                      
and expenses        1,569  1,766  1,978
 Charges to other                     
accounts (a)          410  2,405    445
 Amounts written                      
off                 (142) (1,460)  (967)
 Ending Balance   $2,738  $5,449 $6,905

(a)   Recoveries  of amounts written off in prior periods,  foreign  currency
translation and the change in related noncurrent taxes.
</TABLE>


 (a)(3)  Exhibits.

3.1   Registrant's  Restated  Certificate of Incorporation  (incorporated  by
   reference to Exhibit "C" of Registrant's Proxy Statement dated October 27,
   1989).

3.2  Registrant's Amended and Restated By-Laws, as amended as of November 21,
   1996 (incorporated by reference to the December 29, 1996 10-Q).

4.1  Specimen of Class A Common Stock certificate (incorporated by reference
   to Registration Statement No. 33-15359 on Form S-2).

4.2  Specimen of Class B Common Stock certificate (incorporated by reference
   from Registrant's Annual Report on Form  10-K for the fiscal year ended June
   30, 1989 (the "1989 10-K")).

4.3  Form of Indenture between Registrant and J. Henry Schroder Bank & Trust
   Company, pursuant to which Registrant's 13-1/8% Subordinated Debentures due
   2006 (the "Senior Debentures") were issued (the "Debenture Indenture"), and
   specimen of Senior Debenture (incorporated by reference to Registration
   Statement No. 33-3521 on Form S-2).

4.4  First Supplemental Indenture dated as of November 26, 1986, to the
   Debenture Indenture (incorporated by reference to the Registrant's Quarterly
   Report on Form 10-Q for the quarter ended December 31, 1986 (the "December
   1986 10-Q").

4.5  Form of Indenture between Registrant and Manufacturers Hanover Trust
   Company pursuant to which Registrant's 12-1/4% Senior Subordinated Notes due
   1996 (the "Senior Notes") were issued (the"Note Indenture"), and specimen of
   Senior Note (incorporated by reference to Registration Statement No. 33-03521
   on Form S-2).

4.6  First Supplemental Indenture dated as of November 26, 1986, to the Note
   Indenture (incorporated by reference to the December 1986 10-Q).

4.7  Indenture between Registrant and Connecticut National Bank (as successor
   to National Westminster Bank) dated as of October 15, 1986, pursuant to which
   Registrant's Intermediate Subordinated Debentures due 2001 (the "Intermediate
   Debentures") were issued, and specimen of Intermediate Debenture
   (incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
   the quarter ended September 30, 1986 (the "September 1986 10-Q")).

4.8  Indenture between Rexnord Acquisition Corp. ("RAC") and Bank of New York
   (as successor to Irving Trust Company) dated as of March 2, 1987, pursuant to
   which RAC's Senior Subordinated Debentures due 1999 (the "Rexnord Senior
   Debentures") were issued (the "Rexnord Senior Indenture"), and specimen of
   Rexnord Senior Debenture incorporated by reference from Registrants Annual
   Report on Form 10-K for fiscal year ended June 30, 1987 (the "1987 10-K").

4.9  First Supplemental Indenture between Rexnord Inc. ("Rexnord") (as
   successor to RAC) and Irving Trust Company dated as of July 1, 1987, to the
   Rexnord Senior Indenture (incorporated by reference to Registration Statement
   No. 33-15359 on Form S-2).

4.10 Second Supplemental Indenture between Rexnord Holdings Inc., now know as
   RHI Holdings, Inc. ("RHI") (as successor to Rexnord) and Irving Trust Company
   dated as of August 16, 1988, to the Rexnord Senior Indenture (incorporated by
   reference to Registrant's Annual Report on Form 10-K for the fiscal year
   ended June 30, 1988 (the "1988 10-K")).

4.11 Indenture between Registrant and Norwest Bank Minneapolis, N.A. dated as
   of March 2, 1987, pursuant to which Registrant's Junior Subordinated
   Debentures due 2007 (the "Junior Debentures") were issued, and specimen of
   Junior Debenture (incorporated by reference to Final Amendment to Tender
   Offer Statement on Schedule 14D-1 of Banner Acquisition Corp. ("BAC") dated
   March 9, 1987).

4.12 First Supplemental Indenture between Registrant and Norwest Bank,
   Minnesota Bank, N.A., dated as of February 28, 1991, to Indenture dated as of
   March 2, 1987, relating to the Junior Debentures (incorporated by reference
   to the 1991 10-K).

4.13 Securities Purchase Agreement dated as of October 15, 1986, by and among
   Registrant and each of the Purchasers of the Intermediate Debentures
   (incorporated by reference to the September 1986 10-Q).

4.14 Securities Purchase Agreement dated as of March 2, 1987, by and among
   Registrant, RAC and each of the Purchasers of the Junior Debentures, the
   Rexnord Senior Debentures and other securities (incorporated by reference to
   the 1987 10-K).

4.15 Registration Rights Agreement dated as of October 15, 1986, by and among
   Registrant and each of the purchasers of the Intermediate Debentures
   (incorporated by reference to the September 1986 10-Q).

4.16 Registration Rights Agreement dated as of March 2, 1987, by and among
   Registrant, RAC and each of the purchasers of the Junior Debentures, the
   Rexnord Senior Debentures and other securities (incorporated by reference to
   Registrant's Report on Form 8-K dated March 17, 1987).

10.1 Deferred Compensation Agreement between Registrant and Samuel J. Krasney
   dated July 14, 1972, as amended                  November17, 1978, September
   3, 1985 (the "Krasney Deferred Compensation Agreement") incorporated by
   reference to Registrant's Annual Report on Form 10-K for the fiscal year
   ended June 30, 1985).

10.2 Amendment to the Krasney Deferred Compensation Agreement dated September
   6, 1990 (incorporated by reference to 1991 10-K).

10.3 Amended and Restated Employment Agreement between Registrant and Samuel
   J. Krasney dated April 24, 1990 (incorporated by reference to the 1990 10-K).

10.4 Letter Agreements dated August 4, 1993 among Samuel J. Krasney, The
   Fairchild Corporation and Jeffrey J. Steiner (incorporated by reference to
   1993 10-K).

10.5 1988 U.K. Stock Option Plan of Banner Industries, Inc. (incorporated by
   reference to the 1988 10-K).

10.6 Description of grants of stock options to non-employee directors of
   Registrant (incorporated by reference to the 1988 10-K).

10.7 Amended and Restated Employment Agreement between Registrant and Jeffrey
   J. Steiner dated September 10, 1992 (incorporated by reference to 1993 10-K).

10.8 Letter Agreement dated October 23, 1991 between Registrant and Eric
   Steiner (incorporated by reference to 1992 10-K).

10.9 Letter Agreement dated October 23, 1991 between Registrant and John D.
   Jackson (incorporated by reference to 1992 10-K).

10.10     Letter Agreement dated October 23, 1991 between Registrant and
   Michael T. Alcox (incorporated by reference to 1992         10-K.

10.11     Letter Agreement dated October 23, 1991 between Registrant and
   Donald E. Miller (incorporated by reference to 1992 10-    K).

10.12     Letter Agreement dated October 23, 1991 between Registrant and John
   L. Flynn (incorporated by reference to 1992 10-K).

10.13     Letter Agreement dated April 8, 1993 between Registrant and Thomas
   Flaherty (incorporated by reference to 1993 10-K).

10.14     Purchase Agreement by and between BTR Dunlop Holdings, Inc., RHI
   Holdings, Inc., and Registrant, dated as of                 December 2, 1993
   (incorporated by reference to Registrant's current report on Form 8-K dated
   December 23, 1993).

10.15     Letter Agreement dated October 21, 1994, as amended December 21,
   1994, between Registrant and Eric Steiner                    (incorporated by
   reference to the 1995 10-K).

10.16     Letter Agreement dated October 21, 1994, as amended December 21,
   1994, between Registrant and Michael T.                     (incorporated by
   reference to the 1995 10-K).

10.17     Letter Agreement dated October 21, 1994, as amended December 21,
   1994, between Registrant and Donald E. Miller            (incorporated by
   reference to the 1995 10-K).

10.18     Letter Agreement dated October 21, 1994, as amended December 21,
   1994, between Registrant and John L Flynn                  (incorporated by
   reference to the 1995 10-K).

10.19     Letter Agreement dated October 21, 1994, as amended December 21,
   1994, between Registrant and Thomas J. Flaherty        (incorporated by
   reference to the 1995 10-K).

10.20     Letter Agreement dated September 9, 1996, between Registrant and
    Colin M. Cohen (incorporated by reference to the 1997 10-K).

10.21     Agreement and Plan of Merger dated as of November 9, 1995 by and
    among The Fairchild Corporation, RHI, FII and Shared Technologies, Inc.
    ("STI Merger Agreement") (incorporated by reference from the Registrant's
    Form 8-K dated as of November 9, 1995).

10.22     Amendment No. 1 to STI Merger Agreement dated as of February 2,
    1996 (incorporated by reference from the Registrant's Form 8-K dated as of
    March 13, 1996).

10.23     Amendment No. 2 to STI Merger Agreement dated as of February 23,
    1996 (incorporated by reference from the Registrant's Form 8-K dated as of
    March 13, 1996).

10.24     Amendment No. 3 to STI Merger Agreement dated as of March 1, 1996
    (incorporated by reference from the Registrant's Form 8-K dated as of March
    13, 1996).

10.25     Asset Purchase Agreement dated as of January 23, 1996, between The
    Fairchild Corporation, RHI and Cincinnati Milacron, Inc. (incorporated by
    reference from the Registrant's Form 8-K dated as of January 26, 1996).

10.26     Credit Agreement dated as of March 13, 1996, among Fairchild
    Holding Corporation ("FHC"), Citicorp USA, Inc. and certain financial
    institutions (incorporated by reference to the 1996 10-K).

10.27     Restated and Amended Credit Agreement dated as of July 26, 1996,
    (the "FHC Credit Agreement"), among FHC, Citicorp USA, Inc. and  certain
    financial institutions.

10.28     Amendment No. 1, dated as of January 21, 1997, to the FHC Credit
    Agreement dated as of March 13, 1996 (incorporated by reference to the March
    30, 1997 10-Q).

10.29     Amendment No. 2 and Consent, dated as of February 21, 1997, to the
    FHC Credit Agreement dated as of March 13, 1996 (incorporated by reference
    to the March 30,1997 10-Q).

10.30     Amendment No. 3, dated as of June 30, 1997, to the FHC Credit
    Agreement dated as of March 13, 1996 (incorporated by reference to the 1997
    10-K).

10.31     Second Amended And Restated Credit Agreement dated as of July 18,
    1997, to the FHC Credit Agreement dated as of March 13, 1996 (incorporated
    by reference to the 1997 10-K).

10.32     Restated and Amended Credit Agreement dated as of May 27, 1996,
    (the "RHI Credit Agreement"), among RHI, Citicorp USA, Inc. and certain
    financial institutions. (incorporated by reference to the 1996 10-K).

10.33     Amendment No. 1 dated as of July 29, 1996, to the RHI Credit
    Agreement dated as of May 27, 1996 (incorporated by reference to the 1996
    10-K).

10.34     Amendment No. 2 dated as of April 7, 1997, to the RHI Credit
    Agreement dated as of May 27, 1996 (incorporated by reference to the 1997
    10-K).

10.35     1986 Non-Qualified and Incentive Stock Option Plan (incorporated by
    reference to Registrant's Proxy Statement dated November 15, 1990).

10.36     1986 Non-Qualified and Incentive Stock Option Plan (incorporated by
    reference to Registrant's Proxy Statement dated November 21, 1997).

10.37     1996 Non-Employee Directors Stock Option Plan (incorporated by
    reference to Registrant's Proxy Statement dated November 21, 1997).

10.38     Stock Exchange Agreement between The Fairchild Corporation and
    Banner Aerospace, Inc. pursuant to which the Registrant exchanged Harco,
    Inc. for shares of Banner Aerospace,Inc. (incorporated by reference to the
    Banner Aerospace, Inc. Definitive Proxy Statement dated and filed with the
    SEC on February 23, 1996 with respect to the Special Meeting of Shareholders
    of Banner Aerospace, Inc. held on March 12, 1996).

10.39     Employment Agreement between RHI Holdings, Inc., and Jacques
    Moskovic, dated as of December 29, 1994. (incorporated by reference to the
    1996 10-K/A).

10.40     Employment Agreement between Fairchild France, Inc., and Jacques
    Moskovic, dated as of December 29, 1994. (incorporated by reference to the
    1996 10-K/A).

10.41     Employment Agreement between Fairchild France, Inc., Fairchild CDI,
    S.A., and Jacques Moskovic, dated as of April 18, 1997 (incorporated by
    reference to the 1995 10-K).

10.42     Voting Agreement dated as of July 16, 1997, between RHI Holdings,
    Inc., and Tel-Save Holdings, Inc., (incorporated by reference to the
    Registrant's Schedule 13D/A, Amendment No. 3, filed July 22, 1997, regarding
    Registrant's stock ownership in Shared Technologies Fairchild Inc.).

10.43     Allocation Agreement dated April 13, 1992 by and among The
    Fairchild Corporation, RHI, Rex-PT Holdings, Rexnord Corporation, Rexnord
    Puerto Rico, Inc. and Rexnord Canada Limited (incorporate by reference to
    1992 10-K).

10.44     Form Warrant Agreement (including form of Warrant) issued by the
    Company to Drexel Burnham Lambert on March 13, 1986, subsequently purchased
    by Jeffrey Steiner and subsequently assigned to Stinbes Limited (an
    affiliate of Jeffrey Steiner), for the purchase of Class A or Class B Common
    Stock (incorporated herein by reference to Exhibit 4(c) of the Company's
    Registration Statement No. 33-3521 on Form S-2).

11    Computation  of  earnings per share (found at  Note  1  in  Item  8  to
   Registrant's Consolidated Financial Statements for the fiscal year ended June
   30, 1997).

22    List  of subsidiaries of Registrant (incorporated by reference  to  the
   1997 10-K).

23     Consent   of  Arthur  Andersen  LLP,  independent  public  accountants
   (incorporated by reference to the 1997 10-K).

*27   Financial Data Schedules.

99.1  Financial  statements, related notes thereto and  Auditors'  Report  of
   Banner Aerospace, Inc. for the fiscal year ended March 31, 1997 (incorporated
   by reference to the Banner Aerospace, Inc. Form 10-K for fiscal year ended
   March 31, 1997).

99.2  Financial  statements, related notes thereto and  Auditors'  Report  of
   Shared Technologies Fairchild, Inc. for the fiscal year ended December 31,
   1996  (incorporated by reference to the Registrant's  Form  8-K  filed  on
   December 8, 1997).

99.3  Financial  statements, related notes thereto and  Auditors'  Report  of
   Nacanco Paketleme for the fiscal year ended December 31, 1997 (incorporated
   by reference to the Registrant's Form 8-K filed on December 8, 1997).

*Filed herewith.

(b)  Reports on Form 8-K

      Registrant  filed  no reports on Form 8-K during the  last  quarter  of
Fiscal 1997.
                                 SIGNATURES

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

                          THE FAIRCHILD CORPORATION



                               By:    Colin M. Cohen
                          Senior Vice President and
                           Chief Financial Officer



Date:  April 3, 1998