UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

 QUARTERLY REPORT UNDER SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the Quarterly Period Ended June 30, 1997

                         Commission File Number: 0-20360


                                 RENO AIR, INC.
             (Exact name of registrant as specified in its charter)


                 Nevada                                 88-0259913
      (State or other jurisdiction         (IRS Employer Identification Number)
    of incorporation or organization)


                                 220 Edison Way
                               Reno, Nevada 89502
                    (Address of principal executive offices)


                                 (702) 686-3835
              (Registrant's telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 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 90 days.



Yes  /X/                    No

     Number of shares of common stock, $.01 par value, of registrant outstanding
at June 30, 1997: 10,503,775.


<PAGE>



                                 RENO AIR, INC.
    ------------------------------------------------------------------------

                                      INDEX



PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

        Balance Sheets - June 30, 1997 and
        December 31, 1996                                                   3

        Statements of Operations -
        Three Months and Six Months Ended  June 30, 1997 and 1996           4

        Statements of Cash Flows -
        Six Months Ended June 30, 1997 and 1996                             5

        Notes to Financial Statements                                       6

Item 2. Management's Discussion and Analysis of Financial Condition and     7
                  Results of Operations

PART II.  OTHER INFORMATION

Item 4.           Submission of Matters to a Vote of Security Holders      14

Item 6.           Exhibits and Reports on Form 8-K                         14

SIGNATURES                                                                 15



<PAGE>



                                                       RENO AIR, INC.
                                             CONDENSED BALANCE SHEETS AT
                                          JUNE 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>

               

                                                                                                  June 30,           December 31,
                                                                                                    1997                 1996
                                                                                            ------------------  -------------------
                                                                                                (unaudited)
                                  ASSETS
<S>                                                                                   <C>                       <C> 
CURRENT ASSETS:
     Cash and cash equivalents                                                          $         9,474,739      $       16,221,297
     Short-term investments                                                                       1,379,183               2,318,407
     Accounts receivable, net                                                                    34,385,459              18,834,788
     Inventories and operating supplies                                                           2,695,386               2,109,364
     Prepaid expenses and other                                                                  21,147,064              17,033,968
                                                                                          ------------------     -------------------
 Total current assets                                                                            69,081,831              56,517,824

PROPERTY AND EQUIPMENT:
     Flight equipment                                                                            69,567,315              63,974,552
     Ground property and equipment                                                                6,306,827               8,377,217
     Building                                                                                     3,552,128                       -
     Less - Accumulated depreciation                                                            (15,955,345)            (11,253,987)
                                                                                             ------------------  -------------------
                                                                                                 63,470,925              61,097,782
RESTRICTED CASH AND INVESTMENT                                                                    6,064,553               6,519,249
DEPOSITS AND OTHER                                                                               21,600,357              19,571,557
                                                                                             ------------------  -------------------
                                                                                        $       160,217,666      $       143,706,412
                                                                                             ==================  ===================

                   LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                                   $        22,723,514      $        19,071,306
     Accrued liabilities                                                                         17,906,343              19,775,738
     Air traffic liability                                                                       33,087,998              21,392,594
     Current maturities of long-term debt                                                        11,062,160               5,309,758
     Current portion of deferred lease payable                                                    1,007,619               1,465,827
                                                                                             ------------------  -------------------
Total current liabilities                                                                        85,787,634              67,015,223


LONG-TERM DEBT                                                                                   48,400,415              50,698,058

NON-CURRENT LIABILITIES                                                                          17,894,311              13,862,332

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Common stock, $.01 par value, 30,000,000 shares authorized, 10,503,775 and 10,333,446
   shares issued and outstanding at June 30, 1997 and December 31, 1996, respectively               105,037                 103,334
   Additional paid - in capital                                                                  33,382,830              32,607,130
   Accumulated deficit                                                                          (25,352,561)            (20,579,665)
                                                                                            ------------------  -------------------
Total shareholders' equity                                                                        8,135,306              12,130,799
                                                                                            ------------------  -------------------
                                                                                          $     160,217,666      $       143,706,412
                                                                                            ==================  ===================

               The accompanying  notes are an integral  part of the  financial statements.


</TABLE>


<PAGE>

<TABLE>

                                                            RENO AIR, INC.
                                                       STATEMENTS OF OPERATIONS
                                                       FOR THE SIX MONTHS AND
                                             THREE MONTHS ENDED JUNE 30, 1997 AND 1996
                                                             (unaudited)

                                                          Six months ended                    Three months ended
                                                              June 30,                             June 30,
                                                       1997              1996                1997            1996
                                                  ----------------  ----------------     --------------  --------------
<S>                                            <C>              <C>               <C>                 <C>

OPERATING REVENUES:
     Passenger                                  $  175,762,153   $   155,182,459   $     91,467,514    $  86,496,903
     Other                                          11,343,562         8,553,304          5,954,331        4,418,999
                                               ----------------  ---------------      --------------   --------------
 Total operating revenues                          187,105,715       163,735,763         97,421,845       90,915,902
                                              ----------------  ----------------      --------------   --------------

OPERATING EXPENSES:
     Salaries, wages and benefits                   32,185,423        25,041,827         16,862,974       13,566,229
     Aircraft fuel and oil                          34,240,572        29,374,864         16,162,531       16,593,053
     Aircraft leases                                34,115,919        28,479,879         17,512,672       15,560,498
     Maintenance                                    15,648,162        12,130,503          8,068,183        6,311,736
     Handling, landing and airport fees             19,166,872        16,292,713          9,788,778        8,922,283
     Advertising, sales and distribution            15,074,568        14,683,175          7,609,444        7,911,286
     Commissions                                     9,962,908         9,320,990          5,062,922        5,147,843
     Facility leases                                 6,590,272         5,373,468          3,500,157        2,814,055
     Insurance                                       3,222,628         3,952,842          1,389,744        2,031,174
     Communications                                  2,740,702         2,017,206          1,442,510        1,022,559
     Depreciation and amortization                   4,701,356         2,367,335          2,483,797        1,386,266
     Other                                          12,684,052        10,630,744          6,593,753        6,022,714
                                              ----------------  ----------------      --------------   --------------
Total operating expenses                           190,333,434       159,665,546         96,477,465       87,289,696
                                              ----------------  ----------------      --------------   --------------

OPERATING INCOME (LOSS)                             (3,227,719)        4,070,217            944,380        3,626,206

NON-OPERATING INCOME (EXPENSE):
     Interest expense                               (2,435,150)       (1,652,409)        (1,167,096)        (856,893)
     Interest income                                 1,025,629         1,452,386            537,668          728,679
     Other, net                                       (135,656)         (320,180)           (90,577)        (223,082)
                                              ----------------  ----------------      --------------   --------------

NET INCOME (LOSS)                               $   (4,772,896)  $     3,550,014   $        224,375    $   3,274,910
                                              ================  ================      ==============   ==============

NET INCOME (LOSS) PER COMMON SHARE AND
     COMMON SHARE EQUIVALENT

            PRIMARY                            $         (0.46) $           0.33    $           0.02   $         0.30
                                              ================  ================      ==============   ==============
            FULLY DILUTED                      $         (0.46) $           0.32    $           0.02   $         0.28
                                              ================  ================      ==============   ==============


WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND
  COMMON SHARE EQUIVALENTS OUTSTANDING

             PRIMARY                                10,409,315        10,855,017          10,749,046       11,063,877
                                              ================  ================       ==============   ==============
             FULLY DILUTED                          10,409,315        11,001,210          10,887,526       13,962,798
                                              ================  ================       ==============   ==============


           The  accompanying  notes  are  an  integral  part  of  the  financial statements.



</TABLE>

<PAGE>

                                                  RENO AIR, INC.
                                             STATEMENTS OF CASH FLOWS
                                      SIX MONTHS ENDED JUNE 30, 1997 AND 1996
<TABLE>
<CAPTION>

                                                                                             Six Months
                                                                                                Ended
                                                                                               June 30,
                                                                                     ____________________________
                                                                                          1997             1996         
                                                                                     ____________________________

<S>                                                                                 <C>                 <C>           
OPERATING ACTIVITIES:
Net Income (Loss)                                                                    $     (4,772,896)   $  3,550,014

Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
   Depreciation and amortization                                                             4,701,358      2,367,336
   Common stock issued or to be issued for 401(k) Plan                                         260,675        120,000
   Accounts receivable                                                                     (15,550,671)    (8,592,141)
   Inventories and operating supplies                                                         (586,022)      (889,011)
   Prepaid expenses and other                                                               (4,113,096)    (1,386,081)
   Restricted cash                                                                             454,696     (1,421,080)
   Deposits and other                                                                       (2,028,800)    (3,344,010)
   Accounts payable                                                                          3,652,208       (458,380)
   Accrued liabilities                                                                      (1,869,395)     1,507,237
   Fuel purchase agreement                                                                           -     (1,635,388)
   Air traffic liability                                                                    11,695,404     13,794,224
   Deferred lease and noncurrent liabilities                                                 3,573,772      4,776,950
                                                                                         _____________    ____________
Net cash provided by (used in) operating activities                                         (4,582,767)     8,389,670
                                                                                         _____________    ____________

INVESTING ACTIVITIES:
   Purchase of property and equipment                                                       (4,257,543)   (26,330,851)  
   Purchase of short-term investments                                                       (1,379,183)               -
   Sale of short-term investments                                                            2,318,407      2,944,188
                                                                                         _____________   _____________
                                                                                    
   Net cash used in investing activities                                                    (3,318,319)   (23,386,663)
                    
                                                                                         _____________   _____________
FINANCING ACTIVITIES:
   Proceeds from exercise of stock options and warrants                                        516,728      1,085,310
   Proceeds from notes payable                                                               3,002,668     13,520,000
   Payments on notes payable                                                                (2,364,868)      (575,920)
                                                                                        ______________   ______________
Net cash provided by financing activities                                                    1,154,528     14,029,390
                                                                                        ______________   ______________
DECREASE IN CASH AND CASH EQUIVALENTS                                                       (6,746,558)      (967,603)

CASH AND CASH EQUIVALENTS, beginning of period                                              16,221,297     34,985,808
                                                                                        ______________   ______________
CASH AND CASH EQUIVALENTS, end of period                                             $       9,474,739  $  34,018,205
                                                                                     =================   ==============
   
                                   The accompanying notes are an integral part of the financial statements         
                         
            
</TABLE>

                                       
<PAGE>

                                 RENO AIR, INC.

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - BASIS OF PRESENTATION

The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information and the  instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary for a fair  presentation have been included.
The results of  operations  for the three and six month  periods  ended June 30,
1997,  are not  necessarily  indicative of the results that will be realized for
the full year. For further  information,  refer to the financial  statements and
notes thereto contained in the Form 10-K for the year ended December 31, 1996.


NOTE B - INCOME (LOSS) PER COMMON SHARE

Income (loss) per share is computed by dividing the net income (loss)  available
for common  stock by the weighted  average  number of shares of common stock and
dilutive common stock equivalents assumed outstanding during the period.

In February 1997, the Financial  Accounting Standards Board issued Statement No.
128,  Earnings per Share,  which is required to be adopted on December 31, 1997.
At that time,  the Company will be required to change the method  currently used
to compute  earnings per share and to restate all prior  periods.  Under the new
requirements  for calculating  basic earnings per share,  the dilutive effect of
stock options will be excluded. The impact is expected to result in no change in
primary  earnings  (loss) per share for the three and six months  ended June 30,
1997 and a two cent increase in the primary earnings per share for the three and
six months ended June 30, 1996. For fully diluted earnings per share, the impact
is expected  to result in no change in earnings  per share for the three and six
months  ended June 30, 1996 and no change in  earnings  (loss) per share for the
three and six months ended June 30, 1997.

NOTE C - COMMITMENTS

The Company  has signed a letter of intent to purchase an aircraft it  currently
leases.  The Company is seeking to finance this purchase,  which is scheduled to
be completed in  September,  1997. In June 1997,  the Company  purchased a spare
engine with  short-term  financing of $2.8  million,  due on September  30, 1997
(which has been  included in current  maturities  of long-term  debt at June 30,
1997.) Management intends to seek long term financing for this purchase.

In June 1997, the Company  contracted to purchase 12 million gallons of fuel for
delivery between August 1, 1997, and January 31, 1998, at the Company's Reno and
Las Vegas hubs at an average purchase price of approximately 70 cents per gallon
(including taxes and freight). This purchase represents approximately 25% of the
Company's anticipated fuel requirements during the delivery period.



                                       
<PAGE>

Item 2.  Management's Discussion and Analysis Of Financial Condition
         and Results of Operations

General


This report contains certain  forward-looking  statements  within the meaning of
the Securities  Litigation  Reform Act.  Actual  results may differ  materially.
Certain of the factors that could  impact  future  results are  discussed in the
Company's 1996 Annual Report on Form 10-K,  under the heading "Item 1 Cautionary
Statements."

The  Company's  results  during the first six months of 1997 were  significantly
impacted by unusually  harsh  weather that  affected  the  Company's  West Coast
operations during January 1997, by fuel prices that were substantially higher in
the first quarter of 1997 than in the first  quarter of 1996,  and by a shortage
of spare engines that forced the Company to temporarily  ground as many as three
aircraft in the second quarter.

In late April,  Reno Air opened its second  reservations  center,  in Las Vegas.
This call center has more than  doubled the  Company's  internal  call  handling
capability,  and provides  important  back-up in the event of service outages at
the Company's Reno facility.

In the first quarter of 1997,  the Company  commenced  scheduled  service  from
Gulfport/Biloxi,  Mississippi  to  St.  Petersburg,  and  Sanford,  Florida  and
Atlanta,  Georgia, under a limited revenue guarantee agreement. The Company also
commenced daily service from Reno to Detroit.

In the second quarter of 1997, the Company significantly  increased its service
to Las  Vegas,  creating a hub  linking  seven  existing  Reno Air cities in the
Southwestern  United  States.  The Company also increased its service to Detroit
and its seasonal summer service to Anchorage,  Alaska and  reinstituted  service
between Reno and Ontario,  California. In the third quarter of 1997, the Company
is  adding  service  between  Oklahoma  City  and Las  Vegas,  with  direct  and
connecting service to the West Coast.

The Company's summer schedule is designed to increase  aircraft  utilization and
decrease unit costs.  Average aircraft  utilization has increased from 9.5 hours
in April 1997 to 10 hours in July.

On  April  23,  Reno  Air's  flight   attendants   became   represented  by  the
International  Brotherhood of Teamsters (IBT). The Company will be negotiating a
contract  with  the  IBT.   Management   cannot   predict  the  timing  of  such
negotiations,  when a contract might be concluded, or the extent such a contract
will contain terms different from the Company's current work and pay rules.

On July 23,  the Air Line  Pilots  Association  filed  an  application  with the
National  Mediation Board to represent the Company's pilots. The Company has not
been  advised when ballots  will be mailed or counted.  If  unionization  of the
Company's  pilots occurs,  the Company would be required to negotiate a contract
with the union and the Company's flexibility in dealing with its pilots would be
restricted,  which  could  result in a material  increase  in costs.  Management
cannot  predict the timing of such  negotiations  if a union were to be elected,
when a contract  might be entered  into,  or the  extent  such a contract  would
contain terms different from the Company's current work and pay rules.

Congress  has  adopted  changes  to the  federal  excise  ticket  tax,  which is
currently 10% of a ticket's  fare. The new  legislation  reduces this tax to 9%,
and  eventually  to 7.5%,  but  imposes an  additional  surcharge  of $1,  which
eventually  increases to $3, for each trip segment flown. The initial  structure
is effective on October 1, 1997,  with the full changes  being phased in through
the year 2002. As an example,  the tax on Reno Air's current  unrestricted coach
fare  from Los  Angeles  to  Seattle  (a  two-segment  trip)  will  increase  by
approximately  $0.50 on October 1 and by $2.25 when the new  structure  is fully
effective.  Management cannot predict the extent the new taxes will be passed on
to  passengers,  because  fares  continue to be volatile in response to industry
conditions and competitors fare actions.




<PAGE>


<TABLE>
<CAPTION>

                                                Selected Operating Statistics


                                                  Quarter             Quarter                       Quarter
                                                   Ended               Ended         Percent          Ended            Percent
                                                June 30,1997       June 30, 1996    Change (1)    March 31, 1997      Change (2)
                                                _____________      ______________    __________   _______________     ___________
<S>                                               <C>                 <C>             <C>            <C>                 <C>    <C>

Revenue passengers (3)                             1,404,943           1,298,135        8.2%          1,272,875           10.4%
Revenue Passenger Miles (RPMsx1000) (4)              802,508             769,876        4.2%            722,618           11.1%
Available Seat Miles (ASMsx1000) (5)               1,161,784           1,169,078       -0.6%          1,116,811            4.0%
Passenger load factor (percent) (6)                    69.08               65.85        4.9%              64.70            6.8%
Breakeven load factor (percent) (7)                    68.91               63.36        8.8%              68.54            0.5%
Revenue per passenger mile (cents) (8)                 11.40               11.24        1.4%              11.67           -2.3%
Passenger revenues per ASM (cents)                      7.87                7.40        6.4%               7.55            4.2%
Operating expense per ASM (cents)                       8.34                7.47       11.6%               8.40           -0.7%
Aircraft in service at end of period                      30                  28        7.1%                 30            0.0%
Average aircraft length of haul (miles)                  513                 537       -4.5%                528           -2.8%
Average passenger length of haul (miles)                 571                 593       -3.7%                568            0.5%
Average cost of fuel (cents per gallon) (9)    $        0.71        $       0.74       -4.1%     $         0.86          -17.4%

_________________________________________
(1) Percentage change from quarter ended June 30, 1996 to quarter ended June 30, 1997.
(2) Percent change from quarter ended from March 31, 1997 to quarter ended June 30, 1997.
(3) The number of trip segments flown by paying passengers.
(4) The number of miles flown by paying passengers.
(5) The number of seats for paying passengers multiplied by the number of miles such seats are flown.
(6) RPMs divided by ASMs.
(7) The passenger load factor that would have resulted in the Company having broken even on a net income basis during the period,
    assuming yield and operating costs remained constant.
(8) The operating revenue realized from passengers, divided by RPMs.
(9) Jet fuel prices excluding into-plane service charges.
</TABLE>

<TABLE>
<CAPTION>


                                                Six Months            Six Months
                                                  Ended                 Ended        Percent
                                                June 30, 1997        June 30, 1996   Change (1)
                                              ________________      _______________  __________         
<S>                                                <C>                 <C>             <C>

Revenue Passengers (3)                             2,677,818            2,396,788       11.7%
Revenue Passenger miles (RPMx1000) (4)             1,525,126            1,415,080        7.8%
Available Seat Miles (ASMx1000) (5)                2,278,595            2,116,423        7.7%
Passenger load factor (percent) (6)                     66.93                66.86       0.1%
Breakeven load factor (percent) (7)                     68.75                65.28       5.3%
Revenue per passenger mile (cents) (8)                  11.52                10.97       5.0%
Passenger revenues per ASM (cents)                       7.71                 7.33       5.2%
Operating expenses per ASM (cents)                       8.35                 7.54      10.7%
Aircraft in service at end of period                       30                   28       7.1%
Average aircraft length of haul (miles)                   515                  543      -5.2%
Average passenger length of haul (miles)                  570                  590      -3.4%
Average cost of fuel (cents per gallon) (9)     $        0.82       $         0.72      13.9%


__________________________________________
(1) Percent change from six months ended June 30, 1996 to six months ended June 30, 1997.
(3) thru (9) See above    
      
</TABLE>
                                   
<PAGE>



Results of Operations

The Company realized net income of $224,375 for the quarter ended June 30, 1997,
as compared to net income of $3,274,910 for the quarter ended June 30, 1996. For
the six  months  ended  June  30,  1997,  the  Company  realized  a net  loss of
$4,772,896,  as compared to net income of  $3,550,014  realized in the first six
months of 1996.

The  significant  decline in  financial  results is due to an historic  flood in
Reno,  Nevada,  which affected  first quarter  results,  and an engine  shortage
attributable to  industry-wide  conditions  which affected the Company's  second
quarter results.  Management  believes the significant decline in year-over-year
results  is  attributable  to these  two  factors.  The  Company's  revenue  per
available  seat mile  increased 5.2% in the first six months of 1997 as compared
to the year-earlier period.

The January flood shut down the Reno,  Nevada  airport for two days at a time of
record  passenger  travel  demand during the New Year's  holiday.  This caused a
substantial  reduction in available seat miles below plan, reducing revenues and
increasing  cost per seat mile.  The Company  also  experienced  decreased  load
factors during the quarter due to travelers  avoiding travel to or over Reno, as
a result of the negative publicity about the flood.

In the second  quarter,  the Company  grounded up to three  aircraft at one time
(losing a total of 143 days of aircraft  utilization)  as a result of a shortage
of spare engines.  The shortage was  attributable to delays in engine  overhauls
caused by an  industry-wide  shortage of spare parts,  the sudden  recall of two
spare engines leased from another  airline,  a higher than average  frequency of
unscheduled  engine  changes,  and  an  industry-wide  limited  availability  of
JT8D-219  spare  engines for lease.  In  addition to an increase in  maintenance
expenditures,  these  factors  led to a  decrease  in fleet  utilization  and an
increase in overall unit costs.


Operating Revenues

The Company's  operating  revenues increased by 14.3% in the first six months of
1997, as compared to the same period in 1996, on a 7.7% increase in  operations,
as measured by available seat miles.

The  Company's  year-over-year  growth  is  attributable  to growth in the first
quarter  of  1997  as  compared  to the  first  quarter  of  1996.  The  Company
significantly  expanded  operations in April 1996.  The  Company's  capacity (as
measured  by  available  seat miles  declined  in the second  quarter of 1997 as
compared to the second quarter of 1996, as the Company's  1997 summer  expansion
occurred  later  (in May) and was  comparatively  slight,  and  operations  were
impacted by the engine shortages.

Passenger  revenue per available seat mile increased from 7.3(cent) to 7.7(cent)
from the first six months of 1996 to the first six months of 1997, due to a 5.0%
increase in passenger yield,  year over year. The Company's load factor remained
flat at 66.9% in each six month period.

The  increase  in  passenger  yield was  attributable  in part to a higher  fare
environment  on the West  Coast and  expiration  of the  federal  excise  tax on
December 31, 1996. This tax was reinstated  effective March 10, 1997.  While the
Company  was not able to raise its  fares by 10% on March 10 to recoup  the full
amount of the tax, it had matched its  competitors'  price increases  earlier in
the quarter,  with the result that the Company's  average  ticket prices for the
first  quarter  of 1997 were more than 10% higher  than in the first  quarter of
1997.  Yields  declined  slightly  from the first  quarter of 1997 to the second
quarter of 1997, due to the  reimposition of the excise tax, but continued to be
slightly higher compared to the second quarter of 1996.


Operating Expenses

While the Company's  scope of operations  (as measured by available  seat miles)
increased  7.7%  from the first  six  months of 1996 to the first six  months of
1997, the Company's  operating  expenses increased 19.2%. Most items of expense,
including  fuel,  maintenance,   salaries,   aircraft  leases  and  depreciation
increased on a percentage  basis more than the increase in scope of  operations.
Salaries, aircraft leases and depreciation increased in substantial part because
the Company  incurred  up-front  expenses  related to future  growth,  including
opening a second reservations center in Las Vegas; training flight crews for the
Company's  expanded  summer  schedule;  and  preparing  to  switch  reservations
database  systems from EDS to SABRE in the fourth quarter of 1997.  Depreciation
and amortization  expense almost doubled between the six-month periods primarily
as a result of the  Company's  purchase  of a second  aircraft  in July 1996 and
construction of a hanger in Reno, Nevada, which was completed in late 1996.

Primarily  as a result of the  unusually  high  number  of flight  cancellations
attributable  to the flood and the engine  shortage,  a 5.2% decrease in average
stage  length,  and fuel prices that  remained  high during the first quarter of
1997, the Company's cost per available seat mile increased from 7.5(cent) in the
first six months of 1996 to 8.4(cent) in the first six months of 1997. This cost
increase more than offset higher revenue per ASM experienced  during the period,
resulting in the carrier's breakeven load factor increasing from 65.3% to 68.7%,
period to period.

Fuel expenses increased 16.6% from the first six months of 1996 to the first six
months of 1997 due to increased fuel prices in the first quarter of 1997. During
the first six months,  fuel prices  (including  tax) declined from an average of
93(cent)  per  gallon  in  January  to  69(cent)  in June.  Reno  Air  purchases
approximately  eight million gallons of fuel per month;  the difference  between
January and June average fuel prices represents a decrease of approximately $1.9
million in the Company's monthly fuel expense.

In June 1997, the Company  contracted to purchase 12 million gallons of fuel for
delivery between August 1, 1997, and January 31, 1998, at the Company's Reno and
Las Vegas hubs at an average purchase price of approximately 70 cents per gallon
(including taxes and freight). This purchase represents approximately 25% of the
Company's  anticipated fuel requirements during the delivery period. The Company
may enter into similar agreements, or utilize fuel price hedges, in the future.

The Company's  maintenance  expense  increased  during the  six-month  period as
compared to the 1996 period as a result of increased overhaul costs attributable
in part to aging of the  Company's  fleet  (which  increases  the cost of annual
airframe  maintenance  checks) and a rate of unscheduled  engine removals higher
than the Company's historical average.

Insurance  costs  declined  on an  absolute  basis  year-over-year  due  to  the
Company's obtaining lower insurance rates.  Commissions expense increased,  on a
percentage  basis,  less than the increases in operations  and revenues due to a
larger percentage of the Company's sales being handled internally.
<PAGE>

The following chart lists the components of the Company's per unit costs:
<TABLE>
<CAPTION>


                               Operating Expenses
                         Per Available Seat Mile (cents)

                                                                                  Six Months Ended
                                                                                      June 30,
                                                                               ____________________

                                                                              1997                1996
                                                                              ____                ____
<S>                                                                          <C>                 <C>

Salaries, wages and benefits                                                  1.41                1.18
Aircraft fuel and oil                                                         1.50                1.39
Aircraft Leases                                                               1.50                1.35
Maintenance                                                                   0.69                0.57
Handling, landing and airport fees                                            0.84                0.77
Advertising, sales and distribution                                           0.66                0.69
Commissions                                                                   0.44                0.44
Facility leases                                                               0.29                0.25
Insurance                                                                     0.14                0.19
Communications                                                                0.12                0.10
Depreciation and amortization                                                 0.21                0.11
Other                                                                         0.55                0.50
                                                                             _____                ____
                                                                             
Total                                                                         8.35                7.54
                                                                             =====               =====

</TABLE>

<PAGE>



Liquidity and Capital Resources

As of June 30,  1997,  the  Company's  cash,  cash  equivalents  and short  term
investments totaled $10.9 million, as compared to $18.5 million at the beginning
of the year.  Cash  declined  in part due to an  increase  in prepaid  expenses,
including  for fuel  purchased  under  forward  contracts.  During the six month
period,  cash used in operating  activities was approximately $4.6 million.  The
Company's  $4.8 million net loss during the period was offset by $4.7 million in
non-cash  depreciation  expense. A $15.5 million increase in accounts receivable
was only partly offset by an $11.7 million increase in air traffic liability.

The  Company  has a $10  million  line of  credit  with U.  S.  Bank of  Nevada.
Drawdowns  under the line of credit are secured by a first  priority lien on the
Company's  unencumbered  spare parts and certain  other  assets.  The Company is
required to  maintain a ratio of  collateral  value to loan  balance of not less
than two to one. As of June 30, 1997, no borrowings were  outstanding  under the
line of credit.

Cash provided by financing  activities  during the six-month period totaled $1.2
million, as proceeds from  issuance of $3.0 million of notes payable (primarily 
a mortgage loan financing the Company's  new  maintenance  hanger), were partly
offset  by $2.4  million  of  principal  payments  made on the  Company's  notes
payable. Exercise of Company stock options provided $517,000.

Cash used in investing  activities during the six-month period was $3.3 million,
as the sale  (net) of  $900,000  of short  term  investments  was  offset by the
Company's acquisition of $4.3 million of property and equipment.

The Company leases aircraft under operating  leases with remaining terms ranging
from less than one year,  to almost 18 years.  In late March  1997,  the Company
leased an MD-87 aircraft under a six year  operating  lease.  In April 1997, the
Company  executed  a letter of intent to  purchase  in  September  1997 an MD-83
aircraft that is currently  leased.  The Company  intends to seek  financing for
this purchase. Management is negotiating the renewal of other aircraft leases.

The  Company  leased  one  additional  spare  engine  in March  1997,  and three
additional spare engines in May and June 1997, for terms ranging from six months
to three years.  Also, in June 1997, the Company  purchased an additional  spare
engine with short term  financing of $2.8  million,  due on September  30, 1997.
Management  expects  to  refinance  this  purchase,   but  has  not  yet  sought
commitments to do so.

Management  believes that the Company's cash  position,  together with cash flow
generated from operations and additional  liquidity that management believes can
be  accessed  through  the  capital  markets,  will be  sufficient  to meet  the
Company's  obligations  and capital  requirements  for the next  twelve  months.
Nevertheless,  airline results are highly sensitive to various factors including
the price of fuel and the  actions of  competing  airlines,  either of which can
materially  and  adversely  affect  the  Company's  liquidity  and  cash  flows.
Management  may seek to raise  additional  funds through sales of equity or debt
securities,  or the sale and  leaseback of assets  including  aircraft and spare
engines.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the  Company's  Annual  Meeting of  Stockholders  held on May 22,  1997,  the
stockholders  approved  management's  proposal to amend and restate the Reno Air
1992 Stock Option Plan,  renaming the plan the Employee  Stock  Incentive  Plan,
increasing to 4,600,000 the total number of shares  reserved for issuance  under
the plan (less prior issuances) and making other changes. The stockholders voted
their shares as follows:  4,113,428  shares in favor;  926,928 shares against or
abstained; and 4,249,843 broker non-votes.

At the same meeting, the stockholders  approved management's proposal to approve
the Reno Air Director  Stock Option Plan,  pursuant to which 300,000  shares are
reserved  for  issuance,  pursuant  to a  specified  formula,  to members of the
Company's Board of Directors.  The  stockholders  voted their shares as follows:
4,157,598 shares in favor; 1,088,609 shares against or abstained;  and 4,044,181
broker non-votes.

Each of the Company's  nominees for director  received the  affirmative  vote of
shareholders holding not less than 8.8 million shares.

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A. Exhibits                                                                Page

   11  Statement Re: Computation of Earnings (Loss) Per Share for the
       Three and Six Months ended June 30, 1997 and June 30, 1996           16

B. Reports on Form 8-K.

   None.


<PAGE>




SIGNATURES

Pursuant  to the  requirements  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.

                                           RENO AIR, INC.



DATE:  August 14, 1997                     By: /s/ B.J. RONE
                                              __________________________
                                               B. J. Rone
                                               as Chief Financial Officer
                                               and on behalf of Registrant