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.)

44 comments:

roslaninfo said...

I already read before .. about Baltia Airlines

David Parker Brown said...

I think it is amusing how they point out that all the lights are working in the cockpit --> http://www.flickr.com/photos/26601411@N06/4389532654/in/set-72157623511528052/

Anonymous said...

The whole Baltia model is not economically viable run the numbersyou ...one plan, limited first class, large expenses, how many flights will actually occur, how much cargo demand, frequent flyer is completely independent (no real airline connections). On another note if the airline is any reflection of the people they initially hired to raise capital then watch out...

Anonymous said...

Scam - made in USSR, period.
But, there is still enough perfect fool around who believe to spend a little - and make a BIG ONE...
This people is a good one - since 1990 still collect money...:O)
Go RusMafia...

Asif said...

I know very much about Baltia Airlines. They are very much conscious about there rapo in Airlines. The Baltia Airlines airplanes also used in Pakistan International Airlines. And we all knows that there are very few air crashes in PIA.

Scentsy said...

I agree that in questioning the choice of aircaft. There are younger more reliable and cheaper aircraft to maintain and operate.

newsfreak said...

As pointed out, model is flawed -
- Old aircraft needs a lot of maintenance and 747 needs more specialized maintenance
- 747 pilots = higher salaries
- 747 - too many seats = lower fares
- Older aircraft - Bad on fuel consumption


767 or 330 will definitely do better.

Reminds me of Branson's quote - "Easiest way to become a millionaire - become a billionaire and then open an airline"!

Though I should add Virgin is still in business!

Brian said...

Man i would love to be a 747 Pilot! I also agree what newsfreak said. Old aircraft such as this 747 needs more specialized maintenance. BTW great blog!

Chris said...

Hi guys,

I just wanted to put my two cents worth in.

I personally worked on the FAA certification process with Baltia.

I did somewhere in the range of 700 forms for them, which are part of the books required to pass FAA part 121 heavy carrier, for the B747.

These guys are more than serious about making this project work.

In my opinion, they are doing this in a smart way. Everything is being paid for as they go! I had no problem getting paid for two years!

It has been a long road, I agree, however, it has been a steady road as well.

I expect you will see a plane in the air before the summer of this year. They have come a long way over the past two years. They are in the middle of FAA certification right now. Fuel contracts, de-icing, staffing, and many other things are already in place.

Have a little faith guys! I do.

JetAviator7 said...

As a DC-3 pilot I can tell you that maintenance does increase, but it is still a great airplane to fly. My bet is that most people have no idea of the age of an aircraft when they hop on board, so if it looks nice, flies nice it will work just fine.

JetAviator7
All Things Aviation

Joni said...

We've never heard about the Baltia Airlines. Thanks for sharing this post.

pomast said...

does using older aircraft and increase in maintenance cost make it economically viable ? but also considering the existing aircraft age and cost of new aircraft it is not a bad thing either

Simon said...

What has happened to this airline?

Air hostess training said...

Yes, you have to post a follow up update so that people will know that Baltia offers good services. This is new to me, thankful to know that what you have written here is very transparent.

Emirates said...

Older aircraft requires more maintenance and passengers can face delays if there are frequent technical problems.

Is it risky too?

Brandon said...

Ive had regular correspondence with Baltia from here in Europe and I can say they are very serious and approaching an inaugural flight soon.
They now have 2x 747s 1 ex Kalitta Northwest which is being painted, so all being well..
Investorhub Baltia has up to the minute investor news.

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Rakesh said...

It will be interesting to see which carrier Branson will choose if they need to consolidate.

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cheap flights said...

Baltia Air Lines, the little carrier with nothing to its name but a few routes, got a promise of money yesterday that would enable it to buy something else it should find handy: a few airplanes. Baltia received a commitment of $148 million in financing from the Waterford Group, a Houston-based investment firm, which believes that the new airline will be able to build up traffic between New York, the Baltic states and the Soviet Union.

PilotTraining said...

Very interesting article and blog. I look forward to more posts!

travel bloger said...

interesting story I wish you good luck

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cheap flights said...

very informative post by Tom, Air Lines should continue to upgrade their services, maintenance to avoid any bad circumstances

Celebrity said...

Agreed to Joni. Nice post by the way. Thanks.

Airlines said...

For more information on Baltia airlines like phone numbers, baggage information, check in, call center number visit "AltiusDirectory.com".

http://www.altiusdirectory.com/Travel/airlines-of-the-world.html

jhopes70 said...

I agree that in questioning


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Anonymous said...

in reply to cheap flights....the Waterford money was back in 1991 not 2011, that was a nice attempt to trick people.

Anonymous said...

Baltia's plane age is irrelevant! they bought the plane with no engines!! so how can you make assumptions on gas consumption?? old body of the most reliable plane, new engines... furthermore who ever suggests that a twin engine plane would have been a better choice flying 8h straight over the Atlantic is just plane dumb! I consider myself to be educated so Id rather look out the window of the plane and know I have 4 chances to live!!! 4 engines = better chance to live then 2!! I have been a shareholder since 2006 and at this point im not optimistic of the company nor do i implore promotion however they are a viable company and anyone continuing a dream since 1989 should be deemed as "real" company.

Anonymous said...

Another fact: Do any of you have an idea how much money Russians have???? Moscow is top 5 most expensive places to live in the world!! That being said they need money to pay for these luxuries!! NYC has some of the richest people in the country... and guess what they are Russians/Jews!!! I have a great respect for the countrymen I know here in the US and I can assure you all that they are multi millionaires!! Just so you all know im Italian and no im not married to a Russian!! So my comment is completely NOT Bias nut based on facts!!

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Daljeet Kaur said...

I truly like to reading your post. Thank you so much for taking the time to share such a nice information.
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James said...

Fascinating to watch...what happens..


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Anonymous said...

Looking at the Flickr photos, the one commented on earlier that says the lights are working, it is also captioned that the person is an engineer. In fact he is a swimming pool installer.

AirLease said...

Looks interesting, not familiar with Baltia Airlines. Thanks for citing all your references it gave me a good overview of their situation.

The video doesn't work anymore FYI.

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London Drivers said...

NEVER HEARD ABOUT THIS AIRLINE BEFORE. THANKS FOR SHARING

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This comment has been removed by a blog administrator.