Gediminas Jasionis

Baltia Air Lines (OTCBB: BLTA) Learning How To Fly

by Gediminas Jasionis December 3, 2009
baltia_airlines.jpgSince they had their first Boeing 747 delivered Baltia Air Lines (OTCBB: BLTA) has been seeing bright days - stock price shooting up, management opening a bottle of champagne and investors looking forward with hopes of even higher gains.

The next step will be the start of flights and hopefully cash will start to flow in. Currently the company is in a good position to talk, having no debt on their balance sheet and successfully delivering on ambitious plans to have their own aircraft fleet.

Transatlantic carrier flights between major US cities and eastern European capitals is a niche the company will be trying to fill. The first flight will commence between New York and Saint Petersburg, though the date of the very first voyage is still a mystery.

Also, the company plans to take things lightly once the route is open. Only one round-trip flight per week is currently considered, with increase to five round-trips per week within 4 months. At the end of the first year of operations, they plan on buying three additional planes.

That's quite a plan for a company that currently lives off the stock issuance proceeds. But the plan is yet in an early stage and its success is not guaranteed. The share price got excited over the plane purchase, but that is likely a short term rally. Baltia still doesn't have a fundamental background to create significant value for their shareholders. Their lack of capital as they are looking to start operations is something yet to be addressed. If they turn to equity funding once again, the stock price will go down.

More and more people are attracted to the company as the news spread around, and that's what's driving the price. In reality, apart from the Boeing and the saying "we have no debts", the company is pretty much naked.

Hopefully we'll get a more substantial update from the management when the rooster takes its first flight, and let's hope it is not a dodo!

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