<PAGE>


================================================================================

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

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 2000
                                       OR

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

                 For the transition period from ______ to ______

                         Commission file number 0-17785
                                                -------

                          AIRCRAFT INCOME PARTNERS L.P.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                       13-3430508
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

                          5 Cambridge Center, 9th Floor
                         Cambridge, Massachusetts 02142
                    (Address of principal executive offices)

                                 (617) 234-3000
              (Registrant's telephone number, including area code)

                                      None
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check 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 90 days.

                   Yes    X                                No
                       ------

================================================================================

<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000

                                      INDEX

PART I - FINANCIAL INFORMATION

      ITEM 1 - FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                                          <C>
           BALANCE SHEETS - March 31, 2000 and December 31, 1999 .........................................     1


           STATEMENTS OF OPERATIONS - For the three months ended March 31, 2000
                 and 1999 ................................................................................     2


           STATEMENT OF PARTNERS' EQUITY - For the three months ended
                 March 31, 2000 ..........................................................................     3


           STATEMENTS OF CASH FLOWS - For the three months ended March 31, 2000
                 and 1999 ................................................................................     4


           NOTES TO FINANCIAL STATEMENTS .................................................................     5


      ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS .....................................................     8

      ITEM 3     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...............................     9


PART II - OTHER INFORMATION

      ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K ........................................................    10


SIGNATURES      ..............................................................................................11

</TABLE>




<PAGE>

                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000



PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                      March 31,      December 31,
                                                                                        2000            1999
                                                                                        -----           ----
<S>                                                                                 <C>              <C>
 ASSETS

      Equipment held for sale, net                                                   $        -       $  573,982
      Cash and cash equivalents                                                       3,983,834        7,411,200
      Other receivables                                                                  26,250           34,560
                                                                                     ----------       ----------

                                                                                     $4,010,084       $8,019,742
                                                                                     ==========       ==========

 LIABILITIES AND PARTNERS' EQUITY

 Liabilities
      Accounts payable and accrued expenses                                          $   91,273        $ 115,253
                                                                                     ----------        ---------

 Commitments and contingencies

 Partners' equity
          Limited partners' equity (385,805 units
             issued and outstanding)                                                  3,517,975        7,105,085
          General partner's equity                                                      400,836          799,404
                                                                                     ----------       ----------

          Total partners' equity                                                      3,918,811        7,904,489
                                                                                     ----------       ----------

                                                                                     $4,010,084       $8,019,742
                                                                                     ==========       ==========

</TABLE>



                       See notes to financial statements.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000




                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                        For the three months ended
                                                                                                 March 31,
                                                                                                 ---------

                                                                                         2000               1999
                                                                                         ----               ----
<S>                                                                                     <C>              <C>
 Revenues
      Interest                                                                          $84,263         $    42,623
      Other income                                                                                           66,012
                                                                                        -------         -----------

                                                                                         84,286             108,635
                                                                                        -------         -----------

 Costs and expenses
      Provision for equipment impairment                                                      -           1,891,000
      General and administrative                                                         61,474             147,198
      Operating                                                                           8,490             123,720
      Other expenses                                                                          -              38,000
                                                                                        -------         ------------
                                                                                         69,964           2,199,918
                                                                                        -------         ------------

 Net income (loss)                                                                      $14,322         $(2,091,283)
                                                                                        =======         ============

 Net income (loss) attributable
      Limited partners                                                                  $12,890         $(1,882,155)
      General partners                                                                    1,432            (209,128)
                                                                                        -------         ------------

                                                                                        $14,322         $(2,091,283)
                                                                                        =======         ============


 Net income (loss) per unit of limited
      partnership interest (385,805 units
      outstanding)                                                                      $   .03         $     (4.88)
                                                                                        =======         ============

</TABLE>


                       See notes to financial statements.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000




                          STATEMENT OF PARTNERS' EQUITY
<TABLE>
<CAPTION>

                                                                      Limited           General           Total
                                                                     Partners'         Partner's        Partners'
                                                                      Equity            Equity           Equity
                                                                      ------            ------           ------
<S>                                                               <C>                <C>              <C>
 Balance, January 1, 2000                                         $  7,105,085       $  799,404       $  7,904,489

 Net income for the three months
      ended March 31, 2000                                              12,890            1,432             14,322

 Distribution to partners ($9.33 per limited
      partnership unit)                                            (3,600,000)        (400,000)        (4,000,000)
                                                                  ------------       ----------        -----------

 Balance, March 31, 2000                                          $  3,517,975       $  400,836       $  3,918,811
                                                                  ============       ==========       ===========
</TABLE>



                       See notes to financial statements.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000




                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                           For the three months ended
                                                                                                    March 31
                                                                                                    --------
                                                                                             2000              1999
                                                                                             -----             ----
 DECREASE IN CASH AND
 CASH EQUIVALENTS

<S>                                                                                          <C>           <C>
 Cash flows from operating activities
      Net income (loss)                                                                  $     14,322      $(2,091,283)
      Adjustments to reconcile net income (loss) to net
          cash used in operating activities
             Provision for equipment impairment                                                     -        1,891,000
      Changes in operating assets and liabilities
          Prepaid expenses                                                                          -          (24,944)
          Other receivables                                                                    8,310            16,453
          Accounts payable and accrued expenses                                              (23,980)         (330,160)
                                                                                         -----------       -----------
                 Net cash used in operating activities                                        (1,348)         (538,934)
                                                                                         -----------       -----------
 Cash flows from investing activities
      Proceeds from sale of aircraft, net                                                    573,982                 -
                                                                                         -----------       -----------
 Cash flows from financing activities
      Distribution to partners                                                            (4,000,000)                -
                                                                                         -----------       -----------
 Net decrease in cash and cash equivalents                                                (3,427,366)         (538,934)

 Cash and cash equivalents, beginning of period                                            7,411,200         4,199,804
                                                                                         -----------       -----------

 Cash and cash equivalents, end of period                                                $ 3,983,834       $ 3,660,870
                                                                                         ============      ===========
</TABLE>


                       See notes to financial statements.


<PAGE>



                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000






                          NOTES TO FINANCIAL STATEMENTS

1        INTERIM FINANCIAL INFORMATION

         The summarized financial information of Aircraft Income Partners L.P.
         (the "Partnership") contained herein is unaudited; however, in the
         opinion of management, all adjustments (consisting only of normal
         recurring accruals) necessary for a fair presentation of such financial
         information have been included. The accompanying financial statements,
         footnotes and discussions should be read in conjunction with the
         financial statements, footnotes and discussions contained in the
         Partnership's annual report on Form 10-K for the year ended December
         31, 1999. The accounting policies used in preparing these financial
         statements are consistent with those described in the December 31, 1999
         financial statements. The results of operations for the three months
         ended March 31, 2000, are not necessarily indicative of the results to
         be expected for the year ending December 31, 2000.

2        CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES

         The general partner of the Partnership, Integrated Aircraft Fund
         Management Corp. ("IAFM"), is a wholly owned subsidiary of Presidio
         Capital Corp. ("Presidio").

         Subject to the rights of the Limited Partners under the Limited
         Partnership Agreement, Presidio controls the Partnership through its
         indirect ownership of all of the shares of IAFM. On August 28, 1997, an
         affiliate of NorthStar Capital Partners acquired all of the Class B
         shares of Presidio, the corporate parent of IAFM. This acquisition,
         when aggregated with previous acquisitions, caused NorthStar Capital
         Partners to acquire indirect control of IAFM. Effective July 31, 1998,
         Presidio is indirectly owned by NorthStar Capital Investment Corp.
         ("NorthStar"), a Maryland corporation.

         In August 1997, Presidio entered into a management agreement with
         NorthStar Presidio Management Company, LLC ("NorthStar Presidio"), an
         affiliate of NorthStar. Under the terms of the management agreement,
         NorthStar Presidio provided until October 21, 1999 the day-to-day
         management of Presidio and its direct and indirect subsidiaries and
         affiliates. For the three months ended March 31, 2000 and 1999,
         reimbursable expense paid to NorthStar Presidio amounted to $0 and
         $2,250.

         On October 21, 1999, Presidio entered into a new Services Agreement
         with AP-PCC III, L.P. (the "Agent") pursuant to which the Agent was
         retained to provide asset management and investor relation services to
         the Partnership and other entities affiliated with the Partnership.

         As a result of this agreement, the Agent has the duty to direct the day
         to day affairs of the Partnership, including, without limitation,
         reviewing and analyzing potential sale, financing or restructuring
         proposals regarding the Partnership's assets, preparation of all
         Partnership reports, maintaining Partnership records and maintaining
         bank accounts of the Partnership. The Agent is not permitted, however,
         without the consent of Presidio, or as otherwise required under the
         terms of the Partnership's Agreement of Limited Partnership (the
         "Partnership Agreement") to, among other things, cause the Partnership
         to sell or acquire an asset or file for bankruptcy.

         In order to facilitate the provision by the Agent of the asset
         management services and the investor relation services, effective
         October 25,1999, the officers and directors of the General Partner
         resigned and nominees of the Agent were elected as the officers and
         directors of the General Partner.


<PAGE>

                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000



                          NOTES TO FINANCIAL STATEMENTS

2        CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

         The Agent is an affiliate of Winthrop Financial Associates, a Boston
         based company that provides asset management services, investor
         relation services and property management services to over 150 limited
         partnerships which own commercial property and other assets. The
         General Partner does not believe that this transaction will have a
         material effect on the operations of the Partnership.

         IAFM is entitled to a 10 percent interest in the net income, loss and
         distributions from operations and cash from sales. IAFM received
         $400,000 in distributions for the three months ended March 31, 2000. No
         distributions were paid with respect to the three months ended March
         31,1999.

         As compensation for the foregoing services, IAFM receives the
         management fee provided for in the Limited Partnership Agreement which
         is equal to 4% of Distributions of Cash from Operations from Operating
         Leases and 2% of Distributions of Cash from Operations from Full Payout
         Leases, as such terms are defined in the Limited Partnership Agreement.
         In conjunction with such services, IAFM did not earn any management
         fees for the three months ended March 31, 2000 and 1999.

3        AIRCRAFT SALES

         On January 19, 2000, the Partnership sold to an unaffiliated third
         party its sole remaining aircraft, a McDonnell Douglas DC9-30, for
         gross proceeds of $650,000. Costs associated with the sale amounted to
         approximately $77,000. At the time of the sale, the aircraft had a net
         carrying value of approximately $574,000.

4        DISTRIBUTION TO PARTNERS

         During February 2000, the Partnership declared and paid a $4,000,000
         distribution to partners of record as of January 1, 2000. Of this
         amount, the limited partners collectively received $3,600,000 or $9.33
         per Unit.

5        COMMITMENTS AND CONTINGENCIES

         In September 1996, the Partnership received proposed notices of
         assessment from the State of Hawaii with respect to general excise tax
         ("GET") aggregating approximately $1,338,000 (including interest and
         penalties) for the years 1991, 1992, 1993 and 1994. In July 1998, the
         Partnership received additional proposed notices of assessment for GET
         aggregating approximately $585,000 for the years 1995, 1996 and 1997.
         The state is alleging that GET is owed by the Partnership with respect
         to rents received from Aloha and Hawaiian under the leases between the
         Partnership and each of the airlines.

         The leases with both Aloha and Hawaiian provided for full
         indemnification of the Partnership for such taxes, but the bankruptcy
         of Hawaiian may relieve Hawaiian of its indemnification obligation for
         any periods prior to September 21, 1993, when Hawaiian and its
         affiliates sought bankruptcy protection. In any event, it is the
         Partnership, as taxpayer, which is ultimately liable for the GET, if it
         is applicable.


<PAGE>

                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000



                          NOTES TO FINANCIAL STATEMENTS

5        COMMITMENTS AND CONTINGENCIES (CONTINUED)

         The State of Hawaii has never previously applied the GET to rentals
         received by a lessor of aircraft where the lessor's only contact with
         the State of Hawaii is that it has leased its aircraft to airlines
         which are based in the state. Aloha and Hawaiian, as well as the
         Partnership, have separately engaged tax counsel and both airlines are
         cooperating with the Partnership in vigorously contesting the proposed
         assessments.

         The Partnership recently reached a settlement with Aloha pursuant to
         which Aloha agreed to indemnify the Partnership for any costs it may
         ultimately incur. The Partnership has further been advised that
         Hawaiian is pursuing a legislative remedy. The Partnership believes
         that the state's position on the applicability of GET in this instance
         is without merit. The Partnership has not recorded any provision or
         liability as a result of the proposed notices of assessment.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000

Item 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The matters discussed in this form 10-Q contain certain forward-looking
statements and involve risks uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-Q and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's liquidity, capital resources and results of
operations, including forward looking statements pertaining to such matters,
does not take into account the effects of any changes to the Partnership's
operations. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.

This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in the report.

Liquidity and Capital Resources

The Partnership's level of liquidity based upon cash and cash equivalents
decrease by $3,427,366 during the three months ended March 31, 2000, as compared
to December 31, 1999. The decrease is due to $4,000,000 of cash used for partner
distributions (financing activities) and $1,348 of cash used in operations
partially offset by $573,982 of cash from the sale of the McDonnell Douglas
DC-9-30 Aircraft (financing activities). At March 31, 2000 the Partnership had
$3,983,834 in cash and cash equivalents which had been invested primarily in
money market mutual funds.

During February 2000, the Partnership declared and paid a $4,000,000
distribution to the Unitholders of record as of January 1, 2000. Of this amount,
the limited partners collectively received $3,600,000 or $9.33 per Unit. It is
not anticipated at this time that any further distributions will be made to
partners until the resolution of the Hawaiian GET matter (see below).

In November 1991, in connection with its reorganization under the United States
Bankruptcy Code, Continental Airlines, Inc. ("Continental") rejected the leases
of the three Boeing 727-100 aircraft owned by the Partnership, which had been
out of service since 1991. Due to the condition and the related market for such
aircraft, the Partnership provided aggregate allowances for equipment impairment
of approximately $6,483,000. During 1993, the Partnership sold all three Boeing
727-100 aircraft. The Partnership had retained its rights pursuant to a proof of
claim and an administrative claim filed in the Continental Bankruptcy case with
respect to such aircraft.

In June 1999, the Partnership and Continental agreed to settle the foregoing
claims. Pursuant to the settlement, the Partnership received $780,000 on August
24, 1999 as well as 8,684 shares of Continental's Class A stock and 24,179
shares of Continental's Class B stock and an additional $90,861 on September 22,
1999. On October 6, 1999, the Partnership sold all shares of stock for net
proceeds aggregating approximately $1,213,000, which equaled the Partnership's
cost basis in the stock. Subject to the resolution of third party claims against
additional stock reserved under Continental's Plan of Reorganization, the
Partnership may receive additional shares of Class A and Class B stock.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000




Item 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS (CONTINUED)

Liquidity and Capital Resources (continued)

In September 1996 and July 1998, the Partnership received proposed notices of
assessment from the State of Hawaii with respect to general excise tax of
approximately $1,923,000 (including interest and penalties) for the years 1991
through 1997. The state is alleging that GET is owed by the Partnership with
respect to rents received from Aloha and Hawaiian under the leases between the
Partnership and each of the airlines.

The leases with both Aloha and Hawaiian provide for full indemnification of the
Partnership for such taxes, but the bankruptcy of Hawaiian may relieve Hawaiian
of its indemnification obligation for any periods prior to September 21, 1993,
when Hawaiian and its affiliates sought bankruptcy protection. In any event, it
is the Partnership, as taxpayer, which is ultimately liable for the GET, if it
is applicable.

The State of Hawaii has never previously applied the GET to rentals received by
a lessor of aircraft where the lessor's only contact with the State of Hawaii is
the fact that it has leased its aircraft to airlines which are based in the
state. Aloha and Hawaiian, as well as the Partnership, have separately engaged
tax counsel and both airlines are cooperating with the Partnership in vigorously
contesting the proposed assessments.

The Partnership recently reached a settlement with Aloha pursuant to which Aloha
agreed to indemnify the Partnership for any costs it may ultimately incur. The
Partnership has further been advised that Hawaiian is pursuing a legislative
remedy. The Partnership believes that the state's position on the applicability
of GET in this instance is without merit. The Partnership has not recorded any
liability as a result of the proposed notices of assessment.

Upon resolution of the tax examination relating to the GET, the managing general
partner will then prepare a final accounting of the Partnership's assets and
liabilities, commence the dissolution and termination of the Partnership and
make a final distribution to partners.

Inflation has not had any material effect on the Partnership's revenues since
its inception nor does the Partnership anticipate any material effect on its
business from this factor. The softness in the aircraft industry and resulting
decline in the value of the types of aircraft owned by the Partnership have
resulted in the Partnership providing allowances for equipment impairment.

Results of Operations

Net income increased for the three-month period ended March 31, 2000 compared to
the three-month period ended March 31, 1999, principally due to no operating
Aircraft expenses or impairment provision.

Revenues decreased for the three months ended March 31, 2000 compared to the
corresponding periods in the prior year principally due to decrease on other
income (investor transfer fees) partially offset by increased interest income
due to higher invested cash balances.

Costs and expenses decreased for the three months ended March 31, 2000 compared
to the corresponding period of the prior year principally due to no Aircraft
operations as all equipment has been sold as of February 2000. The decrease in
general and administrative expenses is the result of lower professional fees.


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000



Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Partnership is not subject to market risk as its cash and cash equivalents
are invested in short term money market mutual funds. The Partnership has no
loans outstanding.


<PAGE>

                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000



PART II - OTHER INFORMATION

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

(a)            Exhibits:  27.       Financial Data Schedule.

(b)            Reports on Form 8-K:  None


<PAGE>


                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-Q - MARCH 31, 2000


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                  AIRCRAFT INCOME PARTNERS L.P.

                                  BY: Integrated Aircraft Fund Management Corp.,
                                      General Partner
Date: May 14, 2000                    By:  /S/ Michael L. Ashner
                                           ---------------------
                                           Michael L. Ashner
                                           President and Director
                                           (Principal Executive Officer)

Date: May 14, 2000                    By: /S/ Carolyn B. Tiffany
                                          ----------------------
                                          Carolyn B. Tiffany
                                          Vice President and Treasurer
                                          (Principal Financial and
                                          Accounting Officer)