More on Baltia Airlines

My first post regarding start-up Baltia Airlines has generated quite a few comments, and now that more information about the airline is available, I figured that I'd write a follow-up post. For those of you who aren't familiar with Baltia, it was originally established in 1989 but has only made real strides towards getting off the ground within the last year and a half or so. (I do recommend that you check out my previous post - it gives a better history of Baltia.) I'd say that the airline's odds of long-term success are pretty long, but the company has continued to make progress.

I wrote back in December about how Baltia got a used 747, pictured here thirty years ago in Pakistan International Airlines colors and, more recently, sitting in the Arizona desert awaiting service. (There's a recent set of photos on Flickr showing the airplane getting prepared for service with Baltia.) Well, the airline recently released a video featuring that 747 - those green stripes are still a dead giveaway that the plane is ex-PIA - as well as the airline's CEO and what appears to be a number of their employees.

No doubt the video is meant to reassure potential investors - see, we have an actual plane! and employees! - and certainly it looks as though something is up and running, if not yet fully operational. Supposedly they're still raising cash and are trying to get off the ground now by the fall, but I'm not too optimistic. (Some interesting points from the SEC filing: $2 to $4 million is expected to be raised this year, while their CEO, Igor Dmitrowsky, received $123,395 in compensation last year.)

In my opinion, the choice of aircraft could have been better. Unless things have changed since I last spoke to them in August, they're planning on having 296 seats on the main deck of the 747 in a four-class layout. And there are only going to be 12 seats on the upper deck, according to VP of Finance, Barry Clare:

"First class has only twelve seats," explains Clare. "It's sort of a gimmick because we want to show that we have that kind of service available. Even though service will be superior throughout the entire aircraft, first class service will really be far superior. The entire upper deck... will be dedicated as a first class lounge, with a bar and gourmet chefs, live entertainment, strictly for the first class passengers... If the [first class] seats get filled, great; if not, it's there to show that Baltia Air Lines has that kind of service."

If they can make it happen, it certainly does sound luxurious. But one has to wonder how much money would be lost if the first class seats (which ostensibly could be replaced by a bunch more coach seats) fly empty.

Looking at their 747 from an age aspect - it isn't necessarily much to worry about, since there are some impeccably maintained DC-3s out there that are sixty years old and perfectly safe to fly on. But airplanes, just like cars, require more maintenance (and therefore, more cash) as they age. The Boeing maintenance cost model dictates that as a plane's flight hours increases by 1%, its total airframe maintenance costs increase by 0.25%. This plane is 35 years old, so chances are that it will need some work. That's not to say that you can't successfully use an older aircraft; Northwest (now Delta) has a couple of DC-9s in the 40-year old range, although those are scheduled to exit service by the end of the year. If the aircraft are cheap enough up front - the Baltia 747 cost $475,000 - then perhaps it could work.

A better idea might have been to pick up a smaller aircraft with better economics - maybe a used Boeing 767-200ER, since there are a couple of them sitting around, or some other sort of twin-engine jet. Capacity would be diminished, to be sure, and since it seems like Baltia is planning some sort of cargo service, it could have an impact. But Baltia has also been championing direct, point-to-point flights that - let's face it - aren't likely to attract a whole lot of people, or at least not enough to consistently fill up a 747 enough to make it profitable. It might have a monopoly on the New York - St. Petersburg route, but some other routes that it's seeking to enter, such as New York - Moscow and New York - Kiev, are already flown by two airlines each (Delta and Aeroflot with the 767-300 and A330 for Moscow, and Delta and Ukrainian carrier AeroSvit, with the 767-300 for Kiev). In the instance of New York - Moscow, for example, Delta and Aeroflot operate more efficient aircraft and are able to offer connecting flights, along with frequent flier miles that can be used on a bunch of different airlines (SkyTeam), and probably will be able to offer a lower price.

So, we'll see when they can finally get off the ground. Baltia has some interesting ideas ("Dinner will be served by invitation on the Captain’s Deck in the fashion of the grand trans-Atlantic ocean liners," or "On Westbound flights, we will serve a continental lunch after takeoff, a mid-Atlantic lunch halfway across, and a New York deli meal an hour before landing"), but I'm not optimistic about their viability. (If you have any further information about Baltia that you'd like to share, please feel free to drop me an email.)