Is The End Finally Here For Baltia, America’s Oldest Imaginary Airline?

Could America’s oldest “startup airline” finally be coming to an end? It looks like it.

The basics of Baltia & USGlobal Airways

For those of you not familiar with Baltia & USGlobal Airways, I’ve been writing about them for years. They’ve been taking money from investors for about 30 years, though they’ve never operated a commercial flight, despite the fact that they had a 747-200 for over 20 years (which they finally dumped in 2016, after hiring a consultant who told them it might not be the ideal plane with which to launch an airline).

Their business plan was initially to fly between New York and St. Petersburg, Russia, with plans to later expand to other European capitals. For years Baltia had been pretending that they were actually going to start flying some day soon. Bizarrely enough, some people actually believed it, as the airline had a market cap of $70 million in 2014.

Finally in early 2016, the SEC filed charges against one of Baltia’s executives, who was accused of misleading investors.

After this shakeup, the airline came up with a new business plan. Rather than flying a 747 between New York and Eastern Europe, they’d instead become a regional airline within the United States, and fly between BALtimore, Trenton, Islip, and Albany. This isn’t a joke, folks (I mean, other than the fact that the whole thing clearly is).

But then they changed their mind again, and in late 2016 Baltia signed a letter of intent with Kalitta to lease a 767-300. Then last February they announced that they planned to change their name, execute a reverse stock split, and trade under a new ticker symbol. Baltia’s new name was USGlobal Airways.

Late last year USGlobal Airways announced that they planned to acquire Songbird Airways, a charter airline based in Florida with one 737-400. The plan was to buy the airline for $6.2 million, and the logic was that it would be easier and faster to take over Songbird’s operating certificate than to actually get their own.

They said that they would then be able to immediately begin revenue flying with a 737-400, and planned to start service to Caribbean Islands, and also start charter operations both domestically and internationally. Their goal continued to be to fly 767s across the Atlantic, so eventually they wanted to retire the 737 and start 767 operations. At least that was the claim.

Late last year they announced this wasn’t happening anymore, and it has basically been radio silence ever since.

Is Baltia finally dead?!

Yesterday the SEC revoked Baltia’s registration, meaning the company no longer has the ability to sell stock. This came after Baltia’s failure to respond to a May 7 order from the SEC to bring their annual and quarterly financial reports current. The company hasn’t filed any financial reports for two years, and now they have 21 days to appeal the decision.

The SEC said that this decision was necessary to “help ensure that the corporate shell is not later put to an illicit use involving publicly traded securities manipulated to the detriment of market participants.”

The airline has updated their website to say that they are “cooperating” and “working on all fronts to rectify the trading suspension:

Baltia Airlines, Inc. dba USGlobal Airways is cooperating with the SEC and working on all fronts to rectify the trading suspension. The restatement of previous years’ financials and ongoing legacy legal proceedings have caused a delay in providing completed audited financials. Our goal is to complete this process as quickly as possible. We will keep our shareholders updated as to our progress in getting the trading suspension lifted.

Bottom line

It’s unbelievable that Baltia has continued to exist for as long as they have. Sadly there are still investors who are convinced that the airline will be the next big thing. Heck, it seems like even Baltia’s “VP of Corporate Communications” was being fooled. He had worked at British Airways for over 40 years and seemed to take this job after retiring. After my conversation with him I couldn’t help but feel bad for the guy.

Is this finally the end for Baltia?

Comments

  1. I’m very disappointed. I am a businessman in Albany seeking to fly to Islip (one-stop via BWI) to conduct important meetings, and then fly onward to Trenton (one-stop via BWI) in time for some rest and next-day meetings.

  2. My whole retirement strategy was built around the 10k shares of Baltia stock that I bought for $17. Now I’m going to have to work until I’m 80.

  3. @Mitch – but you can! (Well, almost.) Southwest flies ALB-BWI 6x/day, and BWI-ISP 5x. And American flies ISP-PHL, you’d have to take SEPTA the rest of the way.

    If Baltia wasn’t such a joke to begin with, I’d almost think they noticed that the 800-pound domestic gorilla was already entrenched in BWI and that their idea was a colossal disaster two decades too late. But that’d be giving them far more credit than they deserve.

  4. This “airline” was set up to rip off newly arrived immigrants from Russia and Ukraine looking to cash in on the American dream of striking it rich in the stock market. I’m also sure money laundering may pay a part

  5. “They’ve been taking money from investors for about 30 years, though they’ve never operated a commercial flight, despite the fact that they had a 747-200 for over 20 years”

    This is hilarious. 30 years. How did this happen?

  6. You should read “Conspiracy of Fools,” which is about Enron. Nothing about corporate greed/nonsense/stupidity will surprise you after reading that…absolutely nothing.

  7. @Rain17 I was thinking the same thing. Corporate shells and dummy corporations are after all a very popular vehicle for laundering money.

  8. Corruption and corporate malfeasance are very common in the US, probably approaching the levels in Russia and China. It can only get worse with the scrofulous horror entrenched in the WH.

  9. @Lucky, I’d be careful about how you describe what the SEC has done – as “revocation” (as you have described it) or “suspension” (as the company has described it). The two are different things and of course the consequences for the company are different – and so therefore are the (potential) consequences if somebody mis-reports what has happened.

    I can’t at the moment tell from the links you have provided which of the two it is – the link referring to the “revocation” doesn’t seem to work.

  10. @Tom link works fine, and it states: WASHINGTON, D.C. – Baltia Air Lines, the aspirational carrier that made a splash at Stewart International Airport last year, lost its ability to sell stock Monday when the Securities and Exchange Commission revoked its registration.

  11. Please continue this comical coverage of Baltia! always enjoy reading the updates. I may actually be sad when they eventually shut down “in the best interest” of their shareholders.

  12. I’ve heard that Baltia will be leasing or buying the mysterious Zimbabwe Airways 777 that’s currently parked at Harare Airport. They apparently tried the aircraft by merging with Zimbabwe Airways, but ZA nixed the deal because it was “too shady”.

  13. Isn’t this just the modern equivalent of the South Sea Company?
    (Google South Sea bubble)

    I’m surprised it’s managed to stay as long as it has.

  14. I looked into this for a friend who was considering investing, and we both ended up just watching for entertainment value. The Director of Communications is a travel blogger, the CEO has ZERO experience in aviation, and most of the board is composed of people Baltia owes lots of money to. Their certification expert has zero experience actually working for a 121 air carrier which showed in how quickly they gave up in actually getting certified. No viable plane, no viable business plan but they do have a nifty model of a 767 on someone’s desk and two hired models wearing a flight attendant uniform!

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