Replies to post #12721 on Baltia Air Lines Inc. (fka BLTA)

[GreekInvestor]

That first plane served a purpose quite well actually. There were significant reasons why they chose to purchase 705. If you are interested in investing in Baltia or continuing a current investment, I would suggest giving them a call. There's plenty of detail to be offered.

E

[DarthPilot]

Yep, A good pre-buy on 705 would have found the problems that they found straightaway in Malaysia. It appears that Baltia relied on Logistics Air way too much...can you say "Used Car Salesman"?

Now its the big spin that 705 will be parted out for spare parts...guess what...there is an overabundance of used Classic 747 parts on the market already...just this screw-up alone that someone should have been fired...but know one seems to concerned over a million dollar plus mistake and no one has been held accountable! This is why I'm selling off...no accountability...every one trusts Igor...time for a new CEO... Gordon Bethune wouldn't even come to the rescue of this company!

[deepspringer]

Apparently, 705 was a necessary stepping stone.

Here is a quote from FAA requirements for certification appication:

"In the Formal Application Package, you have to be able to identify the airplane you intend to use by make/model/serial number so that you can write your training programs and maintenance programs."

Source: http://www.faa.gov/about/initiatives/atos/air_carrier/cert_ques_and_ans/#4

Baltia seems to have been faced with a catch 22 then - they had to have a flyable plane in hand before they could a) submit their application to the FAA and b) raise capital to complete the application process. Baltia tried to negotiate a 747 purchase from several other airlines over several months in 2008, but all were priced far more than they could afford. Then they found 705, and its logs were inspected prior to purchase. This 705 plane cost just $475,000 for the airframe, plus the cost of some maintenance to make it ready to ferry to Malaysia where it was to undergo a D-check heavy maintenance program. This work to be done at an FAA-approved facility there that cost far less than any US maintenance facility.

The engines for 705 were leased (later transferred to 706). After this plane flew to Malaysia in late summer 2009, it was then possible to submit the application to the FAA and to raise a lot more capital.

Then, in late fall 2009, 706 (then Northwest N623US) was being retired by Delta-Northwest and was purchased by Kalitta. Baltia looked at it and saw that this plane was in much better shape than 705, had a lot more time left to run on the airframe, and though its airframe purchase price was $1,200,000 it would require far less work and expense to refit (a C-check instead of D-check) than 705. So they bought it from Kalitta, and had Kalitta do the C-check, and brought the leased engines back from Maylasia to hang on it.

So 705 seems to have been a necessary expedient to get to the next step in certification processing and financing. After that plateau was reached, then the 706 opportunity appeared, and long term, that was clearly a better investment going forward, and by then Baltia had the capital to do it.