Proving flights test management, pilots, flight attendants, maintenance control/mechanics, ground handlers, baggage loaders, dispatchers, outsource fuel and deice providers. Pretty comprehensive stuff, not at all like a simulator ride.
There are simulated emergencies, a divert to an off-line location where they have to arrange fueling, deicing, maintenance etc. and other tests of the airline's systems. Not all that hard if everyone is trained properly but WAY harder than any mini-evac demo (normally).
You are absolutely right about 706BL being put right onto the certificate of an already certified airline. Doesn't make a lot of sense but that's the way it works. Almost takes an act of congress to change the rules. The FAA just enforces the rules.
Would really like to see Baltia get up and running, mainly so I could stop reading about it here. Kind of addicting.
Hope it happens in the New Year.