I get a lot of emails from PR people, and unfortunately don’t have time to respond to all of them. However, yesterday I received one that I not only read in full, but that caused me to immediately pick up the phone. Specifically, I got an email from USGlobal Airways’ VP of Corporate Communications. He asked me to give him a ring as there “seems to be some misunderstandings about the position of USGlobal Airways — at least that’s what [he had] been told.”
For those of you not familiar with USGlobal Airways, until recently they were known as Baltia Air Lines, the oldest airline startup that never took to the skies, by design. Let me explain.
The basics of Baltia & USGlobal Airways
In 2014 I first wrote about Baltia Air Lines, which is America’s oldest startup airline. They’ve been in “business” for almost 30 years, except they’ve never actually flown a commercial flight, despite having owned a 747-200 for over 20 years (which they finally dumped last year, after hiring a consultant who told them it might not be the ideal plane with which to launch an airline — who would’ve thought?!).
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 early last year 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.
But then they changed their mind again, and late last year Baltia signed a letter of intent with Kalitta to lease a 767-300. This February they announced that they planned to change their name, execute a reverse stock split, and trade under a new ticker symbol. So Baltia’s new name is USGlobal Airways.
My conversation with USGlobal Airways’ VP of Corporate Communications
Before calling this guy I Googled him, figuring he was in on the whole thing and was as shady as everyone else in this operation. As it turns out, he worked at British Airways for over 41 years, so he has truly been in the airline industry his entire career. This made me even more curious about the whole situation. How could this guy really believe that this airline is a real thing?
Well, I had a nice 20 minute talk with the guy, and I think I can safely say he genuinely believes this airline is a thing, and that they’ll actually start flying next year. He seemed confused when I asked if he could see why some people might question the company’s credibility.
Now, I should mention that he had no clue what I had written about the airline. It appeared as if the airline gave him a list of names to call, and he did that without Googling what those people said about his airline. He said “well I am not sure exactly what you said, but I was told that you were confused about USGlobal Airways, so I wanted to clarify some things.”
I asked him about how the airline had a 747-200 for 20 years but didn’t start flying it. He explained that he didn’t fully understand why they bought that plane in the first place, but that they couldn’t pass the evacuation test. I asked him how people were supposed to have faith in an airline with a plane that can’t get through an evacuation test in two decades.
I asked him why the airline had a name change (hint: so they can fool more investors who don’t know how to use the internet, which is probably how they raised most of their money in the first place). The explanation was that they’re an American company, and they realized that “Baltia” doesn’t sound very American, so it sent the wrong message. USGlobal Airways, on the other hand, sounds much more American.
I wish there were more to report about the questions he had to my answer, but they were exactly what you’d expect. He responded with everything in a way that suggested this is a legitimate organization.
What’s USGlobal Airways’ latest plan?
This airline changes their business plan frequently. Here was the latest update I was provided, which is also partly in their press release:
- USGlobal Airways is presently in the middle of an audit, as they’re trying to “sort out all the old stuff”
- USGlobal Airways intends to purchase Songbird Airways, a charter airline based in Florida with one 737-400; they think it will be easier to take over Songbird’s operating certificate than to actually get their own, so they’ll buy the airline for $6.2 million
- Then they can immediately begin revenue operations, and since this is a 737-400, they’ll fly it to the “Caribbean Islands as well as various domestic and international charter opportunities”
- Keep in mind their initial business plan was to fly 767s between the US and Europe, so that continues to be their long term goal; they’ll operate the 737 short term, and then eventually retire it in favor of flying 767s out of Stewart Airport in New York
I… I… I… I don’t know what to say. I felt like I was in the twilight zone.
To the very nice guy I spoke with, all I can say is that I hope you’re being paid by USGlobal Airways in cash and not stock options. And USGlobal Airways, you’re smart for hiring a guy who actually has decades of experience in the airline industry and would almost seem believable, if it weren’t for the company he worked for.
PS: USGlobal Airways, if you’re looking for a VP of Loyalty for the Golden Rooster Club frequent flyer program, call me! Building an imaginary frequent flyer program seems like it could be fun.
"Reached out to me". Lucky, he rang you. Fewer words. More accurate. Lose the stupid jargon.
@ Fred M -- Well, except it's not more accurate. I called him, not the other way around.
I you look up their current CEO, it appears he was barred from the securities industry several years ago. It could also be someone else with the same name though.
Ben: Thanks for the article, I haven't laughed this much in a long time!
Thank you for keeping us, frequent flyers, up to date with your wonderful articles and in depth reporting!
I look forward to reading every issue of your blog!
Keep up the good work!!!
I'm just sad that I will never see a 747 classic fly.
all BS...this guy takes up a job without doing any research????
"USGlobal Airways, on the other hand, sounds much more American." -take away the Global...
Interesting they bought SongBird. Having worked for Songbird's sister company and Xtra, I can tell you the current owners were not willing to sell it if it was going to be a competitor to Xtra. Foolish thought and it cost them many deals... I'll believe the sale when I hear it from inside Songbird/Xtra.
USGlobal Airways sounds like one from one of the 70s disaster movies. Nor can you call yourself global based on a single route
Look at all the start ups that have failed
Totally reliant on point to point traffic
No back up in case of irregularities
No interline agreements
You can bet the vast majority would fly with a reputable carrier
Let us know when the reverse stock split is completed so we can short it.
I enjoyed reading the post.
Thanks Lucky for writing unique posts like this.
Money laundring in form of failed airlines company. Interesting.......
My guess is that these "announcements" give plausible reason for the stock price to move up and down. Real people buy low and sell high and realize capital gains. Mysterious overseas corporations buy high and sell low as they trade real money for paper losses. Not surprised about the Russian angle.
But why be so public about it?
I'm curious to see if there'll be further fallout at Baltia/USGlobal (both are terrible names...they need a new VP of Marketing, apparently, too) when they read this post and see that you're likely still "confused" about this sham airline.
I was starting to believe they could be legit with the new executive group and the gutting of the old one, but saying they'll operate the 737 is a huge red flag for me. They need to pick a plan and stick to it
Super intriguing. Thanks for posting about your zone experience.