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



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                                    FORM 8-K


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                                 CURRENT REPORT

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


      Date of report (date of earliest event reported): September 18, 1996

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                           Commission File No. 2-91762

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                         POLARIS AIRCRAFT INCOME FUND I


                        State of Organization: California
                   IRS Employer Identification No. 94-2938977
         201 Mission Street, 27th Floor, San Francisco, California 94105
                           Telephone - (415) 284-7400



















                       This document consists of 4 pages.






Item 5.   Other Events

Viscount Air Services, Inc. (Viscount) Default

As discussed in Polaris Aircraft Income Fund I's (the  Partnership's)  Quarterly
Report to the  Securities  and Exchange  Commission on Form 10-Q (Form 10-Q) for
the quarterly  period ended June 30, 1996, GE Capital  Aviation  Services,  Inc.
(GECAS), on behalf of the Partnership, First Security Bank, National Association
(formerly known as First Security Bank of Utah, National Association) (FSB), the
owner/trustee  under  the  Partnership's  leases  with  Viscount  (the  Leases),
Viscount,  certain guarantors of Viscount's  indebtedness and others executed in
April 1996 a  Compromise  of Claims and  Stipulation  under  Section 1110 of the
Bankruptcy  Code  (the  Compromise  and  Stipulation),  which  was  subsequently
approved by the Bankruptcy  Court. The Compromise and Stipulation  provided that
in the event that  Viscount  failed to promptly and timely  perform its monetary
obligations under the Leases and the Compromise and Stipulation, without further
order of the Bankruptcy Court,  GECAS would be entitled to immediate  possession
of the aircraft for which Viscount  failed to perform and Viscount would deliver
such aircraft and all records related thereto to GECAS.

GECAS agreed to a rescheduling of Viscount's September rent obligations to allow
Viscount to make a 25% payment on  September  3, 1996,  with any  defaults to be
cured on or  before  September  6,  1996.  The  remainder  of the  rents and all
maintenance  reserve obligations were to be paid on September 10, 1996, with any
defaults to be cured on or before  September  13, 1996.  Viscount  agreed to the
proposed  cure dates and waived  any  requirement  for a notice of default to be
sent.  Viscount  failed to make the rent and  maintenance  reserve  payments  on
September  10, 1996 and  asserted  that it was  entitled to various  credits and
offsets with respect to such obligations.  GECAS disputed Viscount's  assertions
and notified Viscount that it was in default under the Leases and the Compromise
and  Stipulation.  On September 18, 1996,  GECAS (on behalf of the  Partnership,
Polaris  Holding  Company,  Polaris  Aircraft  Income Fund II, Polaris  Aircraft
Income Fund IV and Polaris Aircraft Investors XVIII) (collectively,  the Polaris
Entities) and Viscount entered into a Stipulation and Agreement (the Stipulation
and Agreement) by which Viscount agreed to voluntarily return all of the Polaris
Entities'  aircraft and  engines,  turn over  possession  of the majority of its
aircraft parts inventory, and cooperate with GECAS in the transition of aircraft
equipment and maintenance, in exchange for which, upon Bankruptcy Court approval
of the Stipulation and Agreement, the Polaris Entities would waive their pre-and
post-petition claims against Viscount for amounts due and unpaid.

The  Stipulation  and  Agreement  provides that upon the return and surrender of
possession of the Partnership's  three airframes and eight engines (two of which
were spare engines), Viscount's rights and interests therein shall terminate. As
of September 13, 1996, Viscount had returned (or surrendered  possession of) two
of the Partnership's  airframes and seven of the Partnership's  engines.  One of
the returned airframes  (together with one installed engine) is currently in the
possession of and being  operated by Nations Air Express,  Inc.  (Nations  Air),
with whom the  Partnership  expects to  negotiate  the terms of a direct  lease.
Nations Air continues to make lease payments directly to the Partnership. Six of
the  seven  returned  engines  are  in the  possession  of  certain  maintenance
facilities  and will  require  maintenance  work in  order to be made  operable.
Viscount returned the Partnership's  remaining airframe and one installed engine
on October 1, 1996. The Partnership is currently evaluating the condition of the
returned  equipment in order to determine the cost of placing such  equipment in
airworthy  condition and to determine  whether such equipment should be marketed
for sale or re-lease.  GECAS, on behalf of the Polaris  Entities,  is evaluating
the spare parts inventory to which Viscount relinquished  possession in order to

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determine its condition and value, the portion allocable to the Partnership, and
the Partnership's alternatives for the use and/or disposition of such parts.

The Stipulation and Agreement also provides that the Polaris Entities, GECAS and
FSB shall release any and all claims  against  Viscount,  Viscount's  bankruptcy
estate, and the property of Viscount's  bankruptcy estate,  effective upon entry
of a final  non-appealable  court order approving the Stipulation and Agreement.
Viscount's affiliates, Rock-It Cargo USA, Inc. and Riverhorse Investments, Inc.,
are expected to assume Viscount's engine finance sale note to the Partnership as
provided under the Compromise  and  Stipulation.  Payments are expected to begin
October 31, 1996.

As discussed in the  Partnership's  June 30, 1996 Form 10-Q, the Partnership has
recorded an allowance for credit losses of  approximately  $1.25 million for the
aggregate  unsecured  receivables from Viscount.  The line of credit,  which was
advanced  to  Viscount  in 1994,  was, in  accordance  with the  Compromise  and
Stipulation, secured by certain of Viscount's trade receivables and spare parts.
The pending  Stipulation and Agreement releases the Partnership's  claim against
Viscount's  trade  receivables.  As a  result,  in the  Partnership's  financial
statements  to be presented  in the  Partnership's  Form 10-Q for the  quarterly
period ended  September  30, 1996,  the  Partnership  will record an  additional
allowance for credit losses of approximately  $339,000,  representing Viscount's
outstanding balance of the line of credit.  Payments received by the Partnership
from the sale of the spare aircraft  parts,  if any, will be recorded as revenue
when received.

The Partnership is currently evaluating these aircraft for potential re-lease or
sale. As noted above, the Partnership  expects to negotiate with Nations Air for
a direct lease of the Partnership's aircraft Nations Air is currently operating.
While the Partnership has not yet completed its evaluation of this equipment, it
believes it is likely that very substantial  maintenance and refurbishment costs
will be required with respect to any equipment that the  Partnership  decides to
re-lease  rather than sell.  If the  Partnership  decides to remarket all of the
three aircraft for re-lease, maintenance and refurbishment costs may well exceed
an estimated  $3.2  million.  A portion of these costs would likely be paid from
the Partnership's current maintenance reserves. The balance would likely be paid
from the  Partnership's  cash  reserves  and would be  capitalized  or expensed.
Alternatively,  with respect to any equipment  that the  Partnership  decides to
sell rather than  re-lease,  such sale would  likely be made on an "as is, where
is" basis, without the Partnership incurring substantial maintenance costs.




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                                    SIGNATURE



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.

                                               POLARIS AIRCRAFT INCOME FUND I
                                               (Registrant)
                                               By:  Polaris Investment
                                                    Management Corporation,
                                                    General Partner




        October 4, 1996                   By:  /S/Marc A. Meiches
- --------------------------------               --------------------------------
                                               Marc A. Meiches
                                               Chief Financial Officer
                                               (principal financial officer and
                                               principal accounting officer of
                                               Polaris Investment Management
                                               Corporation, General Partner of
                                               the Registrant)

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