<PAGE>




                     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, 2002

                                       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 Identification No.)
       incorporation or organization)

      7 Bulfinch Place, Boston MA                        02114
----------------------------------------  --------------------------------------
(Address of principal executive office)                (Zip Code)

        Registrant's telephone number, including area code (617) 570-4600


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
                                       ---       ---








                                     1 of 12

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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002
                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

BALANCE SHEETS (UNAUDITED)

                                                    MARCH 31,       DECEMBER 31,
                                                      2002              2001
                                                  ----------        ----------

Assets

Cash and cash equivalents                         $1,463,613        $1,476,100
                                                  ----------        ----------

    Total Assets                                  $1,463,613        $1,476,100
                                                  ==========        ==========

LIABILITIES AND PARTNERS' EQUITY

Liabilities:

Accounts payable and accrued expenses             $  151,615        $  142,468
                                                  ----------        ----------

       Total Liabilities                             151,615           142,468
                                                  ----------        ----------

Commitments and Contingencies

Partners' Equity:

Limited partners' equity (385,805 units
   issued and outstanding)                         1,171,975         1,191,446
General partner's equity                             140,023           142,186
                                                  ----------        ----------

       Total Partners' Equity                      1,311,998         1,333,632
                                                  ----------        ----------

       Total Liabilities and Partners' Equity     $1,463,613        $1,476,100
                                                  ==========        ==========






                       See notes to financial statements.

                                     2 of 12




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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002



STATEMENTS OF OPERATIONS (UNAUDITED)
                                                FOR THE THREE MONTHS ENDED
                                                MARCH 31,         MARCH 31,
                                                  2002              2001
                                               ---------         ---------

Revenues:

    Interest                                   $   6,014         $  24,738
    Other income                                   5,600             6,400
                                               ---------         ---------

       Total revenues                             11,614            31,138
                                               ---------         ---------

Costs and Expenses:

    General and administrative                    33,248           164,372
                                               ---------         ---------

       Total costs and expenses                   33,248           164,372
                                               ---------         ---------

       Net loss                                $ (21,634)        $(133,234)
                                               =========         =========

Net loss attributable to:

       Limited partners                        $ (19,471)        $(119,911)

       General partner                            (2,163)          (13,323)
                                               ---------         ---------

                                               $ (21,634)        $(133,234)
                                               =========         =========

Net loss per unit of limited partnership
    interest (385,805 units outstanding)       $   (0.05)        $   (0.31)
                                               =========         =========





See notes to financial statements.

                                     3 of 12

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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002


STATEMENT OF PARTNERS' EQUITY (UNAUDITED)





                                Limited            General               Total
                               Partners'          Partner's            Partners'
                                Equity             Equity               Equity
                             -----------        -----------         -----------

Balance - January 1, 2002    $ 1,191,446        $   142,186         $ 1,333,632

   Net loss                      (19,471)            (2,163)            (21,634)
                             -----------        -----------         -----------

Balance - March 31, 2002     $ 1,171,975        $   140,023         $ 1,311,998
                             ===========        ===========         ===========






















                       See notes to financial statements.

                                     4 of 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002

<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                          FOR THE THREE MONTHS ENDED
                                                         MARCH 31,           MARCH 31,
                                                           2002                2001
                                                      -----------         -----------
<S>                                                   <C>                 <C>
Cash Flows from Operating Activities:

Net loss                                              $   (21,634)        $  (133,234)

    Changes in assets and liabilities:
       Accounts payable and accrued expenses                9,147              81,974
                                                      -----------         -----------

Net cash used in operating activities                     (12,487)            (51,260)
                                                      -----------         -----------

Net decrease in cash and cash equivalents                 (12,487)            (51,260)

Cash and cash equivalents, beginning of period          1,476,100           1,885,262
                                                      -----------         -----------

Cash and cash equivalents, end of period              $ 1,463,613         $ 1,834,002
                                                      ===========         ===========
</TABLE>




















                       See notes to financial statements.

                                     5 of 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002

                          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-KSB for the year ended December
         31, 2001. 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, 2001 was derived from audited financial statements at such
         date.

         The results of operations for the three months ended March 31, 2002 and
         2001 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 is Integrated Aircraft Fund
         Management Corp. (the "General Partner"), which is ultimately
         indirectly owned by NorthStar Capital Investment Corp. ("NorthStar"), a
         Maryland corporation.

         On October 21, 1999, Presidio Capital Corp. ("Presidio"), an affiliate
         of NorthStar, entered into a 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.

         The General Partner 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 the General Partner with respect to the
         three months ended March 31, 2002.

         In addition, the General Partner 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, the General Partner did not earn any management fees for the
         three months ended March 31, 2002 and 2001.


                                     6 of 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002

                          NOTES TO FINANCIAL STATEMENTS


3.       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.

         Upon return, 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 in the United States
         District Court, Southern District of New York against Continental.
         Plaintiff seeks damages in an amount to be determined at trial arising
         from Continental's failure to return the three DC9-32 aircraft in the
         return condition required by the lease. On July 31, 2001, the Court
         denied Continental's motion for partial summary judgment. Trial has
         been scheduled for November 5, 2002.

         Two of the Partnership's DC9-32 aircraft were sold during 1999 and the
         remaining aircraft was sold during 2000.























                                     7 of 12



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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002


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 during January 2000. In this
         regard, once the outstanding legal issue against Continental Airlines,
         Inc. is resolved (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 $12,487 during the three months ended March
         31, 2002, as compared to December 31, 2001. The decrease is due to cash
         used in operations. At March 31, 2002, the Partnership had $1,463,613
         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 12

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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002


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

         Liquidity and Capital Resources (Continued)

         Upon return, Registrant 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
         Registrant is beneficiary, filed a complaint in the United States
         District Court, Southern District of New York against Continental.
         Plaintiff seeks damages in an amount to be determined at trial arising
         from Continental's failure to return the three DC9-32 aircraft in the
         return condition required by the lease. On July 31, 2001, the Court
         denied Continental's motion for partial summary judgment. Trial has
         been scheduled for November 5, 2002.

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

         Recently Issued Accounting Standards

         In July 2001, the FASB issued SFAS No. 141 "Business Combinations".
         SFAS No. 141 requires that all business combinations be accounted for
         under the purchase method of accounting. SFAS No. 141 also changes the
         criteria for the separate recognition of intangible assets acquired in
         a business combination. SFAS No. 141 is effective for all business
         combinations initiated after June 30, 2001. This statement will not
         affect the Partnership's financial statements.

         In July 2001, the FASB issued SFAS No. 142 "Goodwill and Other
         Intangible Assets". SFAS No. 142 addresses accounting and reporting for
         intangible assets acquired, except for those acquired in a business
         combination. SFAS No. 142 presumes that goodwill and certain intangible
         assets have indefinite useful lives. Accordingly, goodwill and certain
         intangibles will not be amortized but will rather be tested at least
         annually for impairment. SFAS No. 142 also addresses accounting and
         reporting for goodwill and other intangible assets subsequent to their
         acquisition. SFAS No. 142 is effective for fiscal years beginning after
         December 15, 2001. This statement will not have a material effect on
         the Partnership's financial statements.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets," which addresses financial
         accounting and reporting for the impairment or disposal of long-lived
         assets. This statement supersedes SFAS No. 121, "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed Of" and the accounting and reporting provisions of APB Opinion
         No. 30, "Reporting the Results of Operations -Reporting the Effects of
         a Disposal of a Business and Extraordinary, Unusual and Infrequently
         Occurring Events and Transactions," for the disposal of a segment of a
         business. This Statement also amends ARB No. 51, "Consolidated
         Financial Statements," to eliminate the exception to consolidation for
         a subsidiary for which control is likely to be temporary. SFAS No. 144
         is effective for fiscal years beginning after December 15, 2001, and
         interim periods within those fiscal years. The provisions of this
         Statement generally are to be applied prospectively. This statement
         will not have a material effect on the Partnership's results of
         operations.


                                     9 of 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002

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

         Results of Operations

         Net loss decreased by $111,600 for the three month period ended March
         31, 2002 compared to March 31, 2001, due to decreases in revenues and
         in costs and expenses.

         Revenues decreased by $19,524 for the three month period ended March
         31, 2002 compared to the corresponding period of the prior year
         principally due to a decrease in interest income as a result of lower
         interest rates. Other income decreased due to a decrease in transfer
         fees.

         Costs and expenses decreased by $131,124 for the three month period
         ended March 31, 2002 compared to the corresponding period of the prior
         year principally due to a decrease in legal fees associated with the
         Continental Airlines matter and a decrease in investor relations
         expense.

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 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002



PART II - OTHER INFORMATION


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


         (a)      Exhibits:

                  None.


         (b)      Reports of Form 8-K:

                  No reports on Form 8-K were filed during the period ended
                  March 31, 2002.






























                                    11 of 12


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                          AIRCRAFT INCOME PARTNERS L.P.

                           FORM 10-QSB MARCH 31, 2002

                                   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, 2002










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