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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-QSB
(Mark One)

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

                  For the quarterly period ended March 31, 2001
                                                 --------------

                                       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 small business issuer as specified in its charter)


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


         FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA         02142-1493
        ---------------------------------------   ------------------
        (Address of principal executive office)       (Zip Code)


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


Indicate by check mark whether 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
                                         -----       -----

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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001
                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

BALANCE SHEETS (UNAUDITED)

                                                        MARCH 31,   DECEMBER 31,
                                                          2001         2000
                                                      -----------   -----------
ASSETS

Cash and cash equivalents ..........................  $ 1,834,002   $ 1,885,262
Other receivables ..................................        1,323         1,323
                                                      -----------   -----------

     Total Assets ..................................  $ 1,835,325   $ 1,886,585
                                                      ===========   ===========

LIABILITIES AND PARTNERS' EQUITY

Liabilities:

Accounts payable and accrued expenses ..............  $   172,751   $    90,777
                                                      -----------   -----------

       Total Liabilities ...........................      172,751        90,777
                                                      -----------   -----------

Commitments and Contingencies

Partners' Equity:

Limited partners' equity (385,805 units
   issued and outstanding) .........................    1,487,493     1,607,404
General partner's equity ...........................      175,081       188,404
                                                      -----------   -----------

       Total Partners' Equity ......................    1,662,574     1,795,808
                                                      -----------   -----------

       Total Liabilities and Partners' Equity ......  $ 1,835,325   $ 1,886,585
                                                      ===========   ===========


                       See notes to financial statements.


                                     2 of 11
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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001


STATEMENTS OF OPERATIONS (UNAUDITED)

                                                      FOR THE THREE MONTHS ENDED
                                                       MARCH 31,     MARCH 31,
                                                         2001          2000
                                                      -----------   -----------
Revenues:

     Interest ......................................  $    24,738   $    84,286
     Other income ..................................        6,400          --
                                                      -----------   -----------

       Total revenues ..............................       31,138        84,286
                                                      -----------   -----------

Costs and Expenses:

     General and administrative ....................      164,372        61,474
     Operating .....................................         --           8,490
                                                      -----------   -----------

       Total costs and expenses ....................      164,372        69,964
                                                      -----------   -----------

       Net (loss) income ...........................  $  (133,234)  $    14,322
                                                      ===========   ===========

Net (loss) income attributable to:

       Limited partners ............................  $  (119,911)  $    12,890

       General partner .............................      (13,323)        1,432
                                                      -----------   -----------

                                                      $  (133,234)  $    14,322
                                                      ===========   ===========

Net (loss) income per unit of limited partnership
     interest (385,805 units outstanding) ..........  $     (0.31)  $      0.03
                                                      ===========   ===========


                       See notes to financial statements.


                                     3 of 11
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                         AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

STATEMENTS OF PARTNERS' EQUITY (UNAUDITED)


                                           LIMITED      GENERAL        TOTAL
                                          PARTNERS'    PARTNER'S     PARTNERS'
                                           EQUITY        EQUITY       EQUITY
                                        -----------   -----------   -----------
Balance - January 1, 2001 ............  $ 1,607,404   $   188,404   $ 1,795,808

Net loss .............................     (119,911)      (13,323)     (133,234)
                                        -----------   -----------   -----------

Balance - March 31, 2000 .............  $ 1,487,493   $   175,081   $ 1,662,574
                                        ===========   ===========   ===========


                       See notes to financial statements.


                                    4 of 11
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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                      FOR THE THREE MONTHS ENDED
                                                       MARCH 31,     MARCH 31,
                                                         2001           2000
                                                      -----------   -----------
Cash Flows from Operating Activities:

Net (loss) income ..................................  $  (133,234)  $    14,322

     Changes in assets and liabilities:
       Other receivables ...........................         --           8,310
       Accounts payable and accrued expenses .......       81,974       (23,980)
                                                      -----------   -----------

Net cash used in operating activities ..............      (51,260)       (1,348)
                                                      -----------   -----------

Cash Flows from Investing Activities:

     Proceeds from sale of aircraft, net ...........         --         573,982
                                                      -----------   -----------

Cash provided by investing activities ..............         --         573,982
                                                      -----------   -----------

Cash Flows from Financing Activities:

     Distribution to Partners ......................         --      (4,000,000)
                                                      -----------   -----------

Cash used in financing activities ..................         --      (4,000,000)
                                                      -----------   -----------

Net decrease in cash and cash equivalents ..........      (51,260)   (3,427,366)

Cash and cash equivalents, beginning of period .....    1,885,262     7,411,200
                                                      -----------   -----------

Cash and cash equivalents, end of period ...........  $ 1,834,002   $ 3,983,834
                                                      ===========   ===========


                       See notes to financial statements.


                                     5 of 11
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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

                          NOTES TO FINANCIAL STATEMENTS

1.   INTERIM FINANCIAL INFORMATION

     The accompanying financial statements, footnotes and discussions should be
     read in conjunction with the financial statements, related footnotes and
     discussions contained in the Aircraft Income Partners L.P. (the
     "Partnership") Annual Report on Form 10-K for the year ended December 31,
     2000. The financial information contained herein is unaudited. In the
     opinion of management, all adjustments necessary for a fair presentation of
     such financial information have been included. All adjustments are of a
     normal recurring nature. The balance sheet at December 31, 2000 was derived
     from audited financial statements at such date.

     The results of operations for the three months ended March 31, 2001 and
     2000 are not necessarily indicative of the results to be expected for the
     full year.

2.   CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES

     The general partner of the Partnership, Integrated Aircraft Fund Management
     Corp. ("IAFM"), is indirectly a wholly owned subsidiary of Presidio Capital
     Corp. ("Presidio"). Presidio is indirectly owned by NorthStar Capital
     Investment Corp. ("NorthStar"), a Maryland corporation. Subject to the
     rights of the partners under the Agreement of the Limited Partnership
     ("Partnership Agreement"), Presidio controls the Partnership through its
     indirect ownership of all of the shares of IAFM.

     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 and
     is compensated by Presidio 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
     Agreement to, among other things, cause the Partnership to acquire an asset
     or file for bankruptcy. The General Partner does not believe that this
     relationship has had or 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. No distributions were
     paid to IAFM with respect to the three months ended March 31, 2001. IAFM
     received $400,000 in distributions for the three months ended March 31,
     2000.

                                     6 of 11


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

                          NOTES TO FINANCIAL STATEMENTS

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

     In addition, IAFM receives the management fee provided for in the
     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, 2001 and
     2000.

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. No
     distributions were made for the three months ended March 31, 2001.

5.   COMMITMENTS AND CONTINGENCIES

     During 1997, the leases of three McDonnell Douglas Model DC9-32 aircraft
     owned by the Partnership and leased to Continental Airlines, Inc.
     ("Continental") were extended to September 1998 (2 aircraft) and December
     1998 (1 aircraft) at a rental of $52,500 per month, per aircraft. Two of
     the aircraft were returned in September 1998 and the third aircraft was
     returned in December 1998.

     At the end of the lease, the Partnership conducted inspections of the
     aircraft to ascertain whether the return conditions of the lease were
     satisfied. On May 5, 1999, First Security Bank, N.A., acting not in its
     individual capacity, but solely as trustee under a trust agreement in which
     the Partnership is beneficiary, filed a complaint against Continental in
     the United States District Court, Southern District of New York.

     The complaint seeks damages in an amount to be determined at trial but
     believed to be in excess of $3,000,000 arising out of Continental's i)
     failure to return the three DC9-32 aircraft in the return condition
     required by the lease and ii) failure to make a rent payment provided for
     in the lease. Continental has filed an answer denying the allegations in
     the complaint. The parties are currently in the expert discovery stage.
     Continental has filed a motion for summary judgment on a substantial
     portion of the Registrant's claims.

     Two of the Partnership's DC9-32 aircrafts were sold during 1999 and the
     remaining aircraft was sold on January 19, 2000.

                                     7 of 11


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
        OPERATION

     The matters discussed in this Form 10-QSB contain certain forward-looking
     statements and involve risks and uncertainties (including changing market
     conditions, competitive and regulatory matters, etc.) detailed in the
     disclosure contained in this Form 10-QSB 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 financial statements and
     other items contained elsewhere in the report.

     Liquidity and Capital Resources

     The Registrant sold its remaining aircraft on January 19, 2000. In this
     regard, once the outstanding legal issue against Continental Airlines, Inc.
     is settled (see below), it is anticipated that the general partner will
     prepare a final accounting, commence the dissolution and termination of the
     Registrant, and make a final distribution to partners.

     The Partnership's level of liquidity based upon cash and cash equivalents
     decreased by $51,260 during the three months ended March 31, 2001, as
     compared to December 31, 2000. The decrease is due to cash used in
     operations. At March 31, 2001, the Partnership had $1,834,002 in cash and
     cash equivalents which had been invested primarily in money market mutual
     funds.

     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 aircrafts. 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.

     During 1997, the leases of three McDonnell Douglas Model DC9-32 aircrafts
     owned by the Partnership and leased to Continental were extended to
     September 1998 (2 aircrafts) and December 1998 (1 aircraft) at a rental of
     $52,500 per month, per aircraft. Two of the aircrafts were returned in
     September 1998 and the third aircraft was returned in December 1998.

                                     8 of 11


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
        OPERATION (CONTINUED)

     Liquidity and Capital Resources (Continued)

     At the end of the lease, the Partnership conducted inspections of the
     aircraft to ascertain whether the return conditions of the lease were
     satisfied. On May 5, 1999, First Security Bank, N.A., acting not in its
     individual capacity, but solely as trustee under a trust agreement in which
     the Partnership is beneficiary, filed a complaint against Continental in
     the United States District Court, Southern District of New York. The
     complaint seeks damages in an amount to be determined at trial, but
     believed to be in excess of $3,000,000, arising out of Continental's i)
     failure to return the three DC9-32 aircraft in the return condition
     required by the lease and ii) failure to make a rent payment provided for
     in the lease. Continental has filed an answer denying the allegations in
     the complaint. The parties are currently in the expert discovery stage.
     Continental has filed a motion for summary judgment on a substantial
     portion of the Registrant's claims.

     Two of the Partnership's DC9-32 aircrafts were sold during 1999 and the
     remaining aircraft was sold on January 19, 2000.

     Recently Issued Accounting Standards

     The Financial Accounting Standards Board issued SFAS No. 137, "Accounting
     for Derivative Instruments and Hedging Activities - Deferral of the
     Effective Date of SFAS No. 133." The Statement deferred for one year the
     effective date of SFAS No. 133, "Accounting for Derivative Instruments and
     Hedging Activities". The Statement requires companies to recognize all
     derivatives on the balance sheet as assets or liabilities, measured at fair
     value. Gains or losses resulting from changes in the values of those
     derivatives would be accounted for depending on the use of the derivative
     and whether they qualify for hedge accounting. This Statement is effective
     for fiscal years beginning after June 15, 2000. The Registrant believes
     that the effect of SFAS 133 on its financial statements will be immaterial.

     Results of Operations

     Net loss increased by $147,556 for the three month period ended March 31,
     2001 compared to March 31, 2000, due to a decrease in revenues and increase
     in costs and expenses.

     Revenues decreased by $53,148 for the three month period ended March 31,
     2001 compared to the corresponding period of the prior year principally due
     to a decrease in interest income as a result of lower reserves available
     for investment due to the distributions made to partners during 2000. Other
     income increased due to an increase in transfer fees.

     Costs and expenses increased by $94,408 for the three month period ended
     March 31, 2001 compared to the corresponding period of the prior year
     principally due to an increase in legal fees associated with the
     Continental Airlines matter, which is included in general and
     administrative expenses. Operating expense declined due to the sale of the
     remaining asset in January 2000.

                                     9 of 11


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE 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.

                                    10 of 11


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2001

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant 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



                                     BY:       /s/ MICHAEL L. ASHNER
                                         ---------------------------------------
                                               Michael L. Ashner
                                               President and Director
                                               (Principal Executive Officer)


                                     BY:       /s/ CAROLYN B. TIFFANY
                                        ----------------------------------------
                                               Carolyn B. Tiffany
                                               Vice President and Treasurer
                                               (Principal Financial and
                                               Accounting Officer)






                                                Dated:  May 14, 2001


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