December 21, 1994

Mr. Thomas J. Flaherty
The Fairchild Corporation
300 West Service Road
P.O. Box 10803 
Chantilly, VA 22021

Dear Tom:

This letter agreement modifies and supplements the Employment
Agreement dated April 8, 1993 between The Fairchild Corporation
("Fairchild") and you ("Agreement") as follows:

Change of Control:

If a "Change of  Control" (as defined in the attached Exhibit A)
of Fairchild occurs during a three year period from the date of
this letter while you are still an employee of Fairchild, you
shall be entitled to receive a sum equal to two times your then
current total annual compensation (including base salary and
incentive compensation target, earned or unearned), payable one-
half on the date of change of control (the "first change
payment") and, as long as your employment continues, one-half
over a one year period in four equal quarterly installments,
commencing three months after the date of change of control (the
"second change payments"), except that in the event your
employment is terminated without cause during said one year
period (or in the event you terminate your employment during said
one year period for "good reason" as defined below), you shall be
entitled to receive immediately the first change payment (if not
already paid), any second change payments accrued to date of
termination but not yet paid, and any severance payments payable
to you under the Agreement, but shall not be entitled to any
further second change payments not then due and payable.  "Good
reason" includes any action by Fairchild (or a successor company)
which results in a reduction in your compensation, position,
authority, duties or responsibilities such that your senior
management opportunities are substantially lessened, or which
results in your primary place of employment being relocated more
than  35 miles from the current Dulles Airport location.  No sum
payable to you upon change of control shall limit or affect your
entitlement to base salary or incentive compensation for all
periods during which you are employed by Fairchild.

In no event shall any amounts payable pursuant to this letter
agreement which are deemed to constitute "parachute payments" (as
defined in Section 280G of the Internal Revenue Code, as amended
by the Tax Reform Act of 1986, and as thereafter amended ("the
Code")), when added to any other payments which are deemed to
constitute "parachute payments", as defined in the Code, exceed
2.99 times your "base amount" (as defined in the Code).



Except as supplemented by the terms set forth above, the terms of
the Agreement shall remain in full force and effect.  Thus, the
terms of severance compensation set forth in the "Termination"
section  of the Agreement shall govern such events, rather than
the severance policy recently adopted by the Compensation
Committee of the Board of Directors requiring, among other
things, five years of Fairchild employment and three years of
service as an Officer /General Manager of Fairchild to be
eligible for severance compensation.

Please acknowledge your agreement with the terms of this letter
agreement by signing the attached copy and returning same to this
office, which shall be effective as of the date of your
acceptance.

                              Very truly yours,

                              THE FAIRCHILD CORPORATION



                              By:   John D. Jackson


ACCEPTED AND AGREED:


By:  Thomas J. Flaherty
Date:  January 11, 1995