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.
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?