8 Page Baltia Stock Report
At the Link below, there is Free access to an 8 Page Stock Report on Baltia. I do not believe the Report is in the public domain, but you can access it by simply entering your Email, and joining their site. If you do not like the site, unsubscribe.
I did read the entire Report. Nothing earth shattering, but I do reccomend. It definitely goes into much more detail of their Business Plan from the Inaugural Flight to Expansion, Marketing efforts, and Certification requirements. If you are like me, you probably want every tidbit of info you can get on this emerging company.
This much is in the public domain:
July 6, 2007
Baltia Airlines Inc. Description of Business
The Company was organized in the State of New York, August 24, 1989. Its objective is to provide scheduled air transportation from the U.S. to Russia, and former Soviet Union countries. In 1991, the Department of Transportation (DOT) granted the Company routes to provide non-stop passenger, cargo and mail service from JFK Airport in New York to St. Petersburg and from JFK to Riga, with online service to Minsk, Kiev and Tbilisi, as well as back up service to Moscow. Due to a lack of sufficient working capital, the US Department of Transportation terminated the Company's route authority without prejudice to reapply when financing was in hand. Thereafter, Baltia has engaged in market research, operations development and planning, as well as activities to raise the requisite funding in order to reapply with the US Department of Transportation. These costs are borne by Baltia's shareholders and principals. Once fully operational, Baltia expects that it will employ approximately 200 persons full-time and be operating in compliance with all regulations applicable to U.S. airlines.
With the exception of the JFK - Moscow route, there exists no nonstop competitive air transportation service on the routes for which Baltia can reapply pending financing. Baltia intends to provide full service, i.e. passenger, cargo and mail, and will not be dependent upon one or a few major customers. Baltia has two registered trademarks "BALTIA" and "VOYAGER CLASS" and five trademarks are subject to registration.
There is currently no nonstop service from JFK to St. Petersburg. Connecting service is provided mainly by foreign carriers. Finnair, Lufthansa and SAS are the leading competitors in the US-Russia market. KLM, British Airways, Air France, Austrian Airlines, and Swissair also provide service. However, foreign carriers are required to have intermediate stops at transit airports in their respective countries (Helsinki, Frankfurt, Stockholm, Copenhagen, etc.) because they are "third nation" airlines and as such cannot fly directly between the US and Russia (only a US airline as well as a reciprocating Russian airline is eligible to fly nonstop). Delta and Aeroflot currently operate between JFK and Moscow.
Baltia's objective is to establish itself as the leading nonstop carrier in the market niche over the North Atlantic with operations that are profitable and growing over time. In order to accomplish this objective, we intend to establish and maintain high quality service standards which we believe will be competitive with the European airlines currently providing connecting flights. Baltia does not expect to be in direct competition with deep discount airlines, including several East European airlines and the offspring of the former Soviet airline Aeroflot, which also provide connecting flights.
Baltia intends to provide First, Business, and Voyager Class accommodations. Baltia's passenger market strategy is tailored to particular preferences of the various segments of its customer base, with marketing attention particularly focused on American business travelers with interests in Russia who require high quality, nonstop service from the US to Russia.
Baltia's initial marketing strategy is based on existing agencies specializing in the market, selected travel and business publications, supplemented by direct mailings to corporate travel planners, and individual American businesses that are currently involved in Russia. Soon after the inauguration of flight service, Baltia plans to implement its frequent flyer program. As the marketing matures, Baltia plans to advertise to the general public throughout the US, and in Russia. Baltia also plans to sponsor selected industry and trade events in the US and in St. Petersburg.
Baltia intends to provide customer service and reservations centers in New York and in St. Petersburg, to list Baltia's schedules and tariffs in the Official Airline Guide, and provide world wide access to reservations on Baltia's flights through a major Computer Reservations and Ticketing System ("CRS").
The Company intends to activate the reservations service when the DOT issues its order authorizing Baltia to sell tickets (expected to be approximately 30 to 45 days before the inaugural flight).
Baltia has identified the following market segments in the U.S.-Russia market: (i) Business Travelers, (ii) General Tourism, (iii) Ethnic Travelers, (iv) Special Interest Groups, (v) Professional Exchanges, and (vi) Government and Diplomatic Travel.
Baltia believes that the direct nonstop service to be offered by it will be superior to the stop-over service currently offered by foreign airlines. A comparison between the two services with respect to passenger convenience and cargo transport efficiency is set forth below.
BALTIA - US flag, non-stop service:
With non-stop service, a passenger can fly from JFK to St. Petersburg in about 8 hours in a Boeing B747 wide body airplane. Cargo arrives containerized, palletized, and secure.
Foreign, stop-over journeys:
With stop-over service, it would take a passenger 10 to 18 hours to fly through Helsinki, Copenhagen, Moscow, or Frankfurt on a foreign carrier. In addition, passengers must change to narrow-body aircraft at a layover airport. Cargo is "broken up" and manually loaded onto narrow-body aircraft, or trucked from Helsinki.
Baltia plans to operate efficiently and provide consistent high quality service to passengers and cargo shippers alike in order to establish the Company as the preferred airline in the market in comparison to its competitors. The Company also plans to use targeted marketing of its service to maintain and grow its market share.
Because of the increased reliability and comfort of a nonstop flight, Baltia expects to capture a portion of the existing traffic. Further, US government traffic is required by law (Fly America Act) to fly on a US Flag carrier when service is available.
In order to start revenue flight operations, the Company has to complete FAA air carrier certification. During this process the airline demonstrates to the FAA how the airline will comply with the federal aviation regulations. As part of the process the FAA reviews the Company's management and operational control.
The Company's staff has prior experience with the certification and has worked closely with the New York Flight Standards District Office (NY FSDO) and is familiar with procedures of the Certification Standardization and Evaluation Team (CSET). The FAA certification is a defined process, it is structured in phases with test gates, and requires advance preparation on the part of the carrier. The FAA assembles a certification team and the airline assembles its certification team, acceptable to the FAA. The two teams interact at a counterpart level. Each team has its team leaders and managers of different functions, for example, maintenance, flight operations, cabin safety, etc. The following table shows the basic outline of the certification process.
Documentation Period:
Formal application documents Manual system, checklists, aircraft airworthiness records, airport/enroute analyses, environmental impact analysis Compliance statement, draft operation specifications Training curricula Mini-evacuation test plan Proving flight plan Requests for deviations and exemptions
Inspection and Demonstration Period:
Training of pilots, instructors, check airmen Training of mechanics, instructors Training of dispatchers Training of flight attendants Aircraft conformity check Inspection of base of operations and stations JFK and St. Petersburg Mini evacuation test Proving flight
During the documentation period the FAA in essence satisfies itself that the new air carrier has properly documented its operating procedures, that the aircraft and its documentation meet airworthiness requirements, that maintenance and training facilities are qualified and their curricula meets FAA requirements. During this period the Company prepares draft Operation Specifications, which are refined and issued upon certification.
During the inspection and demonstration stage, the FAA confirms that the Company conducts its training in accordance with its procedures, under FAA supervision. The FAA satisfies itself that the base station facilities at JFK and St. Petersburg are appropriate for the proposed operations with adequate equipment and arrangements in place. Aircraft conformity check assures that the aircraft meets all airworthiness requirements. The mini evacuation test demonstrates that the crew is capable of evacuating the aircraft in emergency. Finally, proving flights demonstrate how the Company actually conducts its flights in accordance with its specifications and procedures, and the test involves simulated emergencies.
The air carrier certification process includes environment impact analysis of the airline's operations. There is no specific cost attached, and there are no special environmental procedures in addition the airline's operations specifications. Standard industry operating procedures include such environmental aspects as containment and cleaning after an accidental fuel spill, handling of de-iceing liquid, waste disposal, etc. Also, Baltia will have to conduct flight operations in compliance with noise abatement regulations. Compliance with these requirements is prescribed by Federal Aviation Regulation and is standard in the industry. The initial compliance cost is part of the air carrier certification. The Company will carry airline liability insurance as required for a US airline by DOT regulation.
During the past two years the Company has been preparing for air carrier certification and is seeking funding to commence revenue flight operations on the JFK St. Petersburg route. Until the necessary funding is in place, management is foregoing compensation and expects to contribute administrative costs.
The Company does not engage in flight operations at this time and has made no equipment purchases or sales. The change in aggregate financial data during this year reflects the relatively small administrative costs that were incurred and added to the pre-launching costs.
Baltia has arranged for a lease of a Boeing 747 aircraft from a reliable lessor. The Company will execute the agreement when it has the financing. The aircraft will be delivered fresh from check C, an FAA required maintenance standard. The term "check C" refers to a mandatory, extensive overall maintenance inspection program of an aircraft that is typically conducted every two years. The marketing strategy relating to capacity and overall quality of service as experienced by passengers is reflected in the choice of aircraft. Five aircraft types are capable of flying nonstop on the JFK-St. Petersburg route, Boeing 747, MD11/DC10-30, Boeing 767, A340 and Boeing 777. From among these, Baltia's management believes that the cabin size of a Boeing 747 aircraft offers the greatest degree of comfort and capacity for the JFK-St. Petersburg market. Boeing 747 dispatch reliability lies within the 97% range (Boeing Report ID:RM 23004), which is a contributing factor to on-time dependability. Baltia's on-time dependability is further enhanced because a Boeing 747, a four-engine aircraft, is not subject to ETOPS regulations which could limit flights during certain weather conditions. "ETOPS" is an acronym for Extended Range Twin Engine Operations, which for a startup airline generally requires that during year one a twin engine aircraft be operated within 75 minutes from a suitable airport. If one of the airports on the Great Circle route is unusable, a twin engine aircraft would not receive dispatch clearance from JFK for a flight to St. Petersburg.
With the Boeing 747 true wide body aircraft Baltia intends to provide cargo service from JFK to St. Petersburg, offering containers, pallets, and block space arrangements. Baltia expects to carry contract cargo for express shippers. Baltia plans to market its own "Baltia Courier", "Baltia Express", and "Baltia Priority" express service for letter and packages. Baltia also expects revenues from diplomatic mail and cargo, under the Fly America Act provision. This Act provides that when service is available, US government traffic is required to fly on a US Flag carrier.
Baltia has prepared passenger service and ground service arrangements at JFK, and similar services are available at Pulkovo Airport in St. Petersburg, based on recent contact. As a US carrier flying into a foreign country, Baltia will be eligible to the same degree of priority that a foreign carrier receives when arriving in the US.
Baltia intends to start the JFK-St. Petersburg service with one round-trip flight per week, then increase the frequency to three round trips, and then to five round trips, within a four-month period.
By starting with one roundtrip flight per week for the first four weeks, Baltia not only accelerates and simplifies its FAA certification, but expects to save itself the additional time it would incur to make needed improvements and corrections. Starting with a light schedule, any inefficiencies of a given flight may be corrected for the next flight. Baltia management believes that in the initial four weeks, the Company will attain high operating efficiencies and service standards. These standards may be further refined during the following two months when Baltia plans to increase service to three round-trips per week. Following that, Baltia plans to increase service to five round trips per week, and then subsequently to daily round trip flights as additional aircraft are brought into service. The transitional schedule allows Baltia to train additional pilots, flight attendants, and support staff with a continuous training program. It also allows Baltia marketing program to take effect through its various segments.
During the past two years Baltia has also been preparing standards for service. The care taken in establishing high standards has implications beyond the launching of the JFK-St. Petersburg flight. Baltia plans to build operating modules and apply that know-how to develop new markets. Once established, Baltia plans to duplicate its JFK-St. Petersburg standards on flights on other transatlantic routes. By the end of year one, Baltia plans to introduce three additional aircrafts.
Additional revenues from charter flying. In conjunction with its Part 121 air carrier certification ("Part 121", referring to a Federal Aviation Regulations' number, is an industry acronym used to describe a US airline operating heavy jet aircraft) for scheduled service, Baltia intends to seek certification for world wide charter service. Following certification, Baltia plans to utilize aircraft time available between scheduled service, to earn additional revenues from charters. We are also considering qualifying our aircraft for military contracts.
As of December 31, 2005, Baltia has four full-time personnel and five part-time personnel. SH&E, an industry consulting firm based in New York, is Baltia's consultant. Baltia staff has professionals who have extensive major US airline experience in aircraft maintenance, airline operations, airline regulatory compliance and administration.
Scroll down the Link and a good portion of the Baltia Report is there (above). Or enter Email for the entire 8 page Stock Report:
http://www.hotstocked.com/companies/b/baltia-air-lines-inc-BLTA-61608.html
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