Attached files

Baltia Air Lines, Inc. (A Development Stage Company)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

Period ending September 30, 2014

1. Basis of Presentation

The Financial Statements presented herein have been prepared by us in accordance with the accounting policies described in our December 31, 2013 Annual Report on Form 10-K and should be read in conjunction with the notes to financial statements which appear in that report.

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

In the opinion of management, the information furnished in this Form 10-Q reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the nine month periods ended September 30, 2014 and 2013. All such adjustments are of a normal recurring nature. The Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include some information and notes necessary to conform to annual reporting requirements

The financial statements have been presented in a development stage format. Since inception, our primary activities have been raising of capital, obtaining financing and obtaining FAA Certification from the U.S. Department of Transportation. We have not commenced our principal revenue producing activities. There is no assurance the Company will commence operation in the future or that those operations will be profitable.

2. Earnings/Loss Per Share

Net loss per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted earnings per share assumes that any dilutive convertible securities outstanding were converted, with related preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options for which market price exceeds the exercise price, less shares which could have been purchased by us with the related proceeds. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. Due to the net losses reported dilutive common equivalent shares were excluded from the computation of diluted loss per share, as inclusion would be anti-dilutive for the periods presented. At September 30, 2014, there are no outstanding common stock equivalents.

3. Stockholders' Equity

Stock Issued for Services

During the nine months ended September 30, 2014, we issued 190,646,311 shares of our common stock in exchange for services. The shares were valued at $3,247,358, approximately $0.02 per share and reflected the share market value at the time of issuance. The shares are not registered and are subject to restrictions as to transferability.

Stock Issued for Cash

During the nine months ended September 30, 2014, we issued 1,450,613,042 shares of our common stock in exchange for cash. The shares sold for cash were subscribed at $7,117,038, approximately $0.050 weighted average per share.

4. Note Payable

On March 31, 2013 the note payable to Eastern Construction & Electric, Inc. was modified as to the repayment of the note. The repayment was modified to read "Company will repay the principal amount of $1,150,000 to lender on or before the second anniversary of the date upon which the company commences its revenue flight operations. The Company will pay accrued interest to date on or before the first anniversary of the date upon which the Company commences its revenue flight operations." All other terms of the agreement remain the same.

Interest accrued to September 30, 2014 is $396,750.

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations

Statements that include words such as "believe," "expect," "should," intend," "may," "anticipate," "likely," "contingent," "could," "may," or other future-oriented statements, are forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding our business plans, strategies and objectives, and, in particular, statements referring to our expectations regarding our ability to continue as a going concern, generate increased market awareness of, and demand for, our service, realize profitability and positive cash flow, and timely obtain required financing. These forward-looking statements involve risks and uncertainties that could cause actual results to differ from anticipated results. The forward-looking statements are based on our current expectations and what we believe are reasonable assumptions given our knowledge of the markets; however, our actual performance, results and achievements could differ materially from those expressed in, or implied by, these forward-looking statements.

OVERVIEW

Baltia Air Lines, Inc. (the "Company" or "Baltia" or "Baltia Air Lines") is a certifying Part 121 (heavy jet operator) start-up United States airline with U.S. Government fitness approval and is currently in Stage 3 of FAA Air Carrier Certification, which is the final stage and includes demonstration flights. Upon completion, Baltia anticipates commencing scheduled non-stop service from JFK Int'l Airport in New York to Pulkovo II Int'l Airport of St. Petersburg, Russia. Baltia Air Lines, Inc. was organized in the State of New York on August 24, 1989.

On January 5, 2009, in its Order 2009-3-7, the U.S. Department of Transportation (DOT) certified Baltia Air Lines as fit, willing and able to engage in foreign scheduled air transportation of persons, property, and mail, subject principally to obtaining an Air Carrier Certificate and Operations Specifications from the Federal Aviation Administration (collectively “FAA certification”). In the DOT certification, Baltia was awarded route 890 from JFK International Airport, New York, New York to Pulkovo International Airport, St. Petersburg, Russia. Upon completing FAA certification Baltia is also authorized to operate worldwide charter services. Baltia had filed its application with the DOT in October 2007.

In the last quarter of 2010, we purchased a Boeing 747 aircraft from Kalitta Air. On October 23, 2014, the final C4 check was completed and the B747 aircraft passed inspection. Baltia carries $100,000,000 aircraft liability insurance, generally ground only, of which $10 million is through State National Insurance Co. and $90 million through Lloyds of London. Baltia is in the process of adding flight risk insurance of one billion dollars US ($1,000,000,000) prior to initiating flight. The Company will carry airline liability insurance as required for a US airline by DOT regulation.

Baltia intends to provide full service, i.e. passenger, cargo and mail. An agreement between the United States and Russia controls air transport of passengers and cargo between the two countries. Only U.S. airlines and Russian airlines are permitted to fly nonstop between the two countries. Currently no U.S. or Russian carrier is providing non-stop service between New York and St. Petersburg. Connecting service is provided mainly by third-nation carriers individually and in code shares with U.S. carriers. Finnair, Lufthansa and SAS are the leading competitors in the US-Russia market. KLM, British Airways, Air France, Austrian Airlines, and Swiss International also provide service. However, as third-nation carriers, each must make an intermediate stop in its respective country (Helsinki, Frankfurt, Stockholm, Copenhagen, etc.). Delta and two Russian airlines, Aeroflot and Transaero, currently operate non-stop between JFK and Moscow. With the exception of the JFK-Moscow route, there exists no non-stop competitive air transportation service on the routes for which Baltia intends to apply.

Baltia has two registered trademarks "BALTIA" and "VOYAGER CLASS" and five trademarks are subject to registration.

Baltia's objective is to establish itself as the leading non-stop carrier in the market niche over the North Atlantic with operations with profitable growth 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 provide connecting flights.

Baltia intends to provide First, Business, and Voyager Class passenger 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, non-stop service from the US to 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 establish 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 to provide world-wide access to reservations on Baltia's flights through a major Computer Reservations and Ticketing System ("CRS"). The Company intends to activate its 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 its non-stop service will be superior to the stop-over service currently offered by third-nation 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.

Because of the increased reliability and comfort of a non-stop flight, the Company expects to capture a portion of the existing traffic.

Using its Boeing 747 true wide-body aircraft, the Company is able to provide container, pallet, and block space cargo carriage. The Company expects to carry contract cargo for express shippers and plans to market its own “Baltia Courier”, “Baltia Express”, and “Baltia Priority” express service for letters and packages. The Company also expects revenues from diplomatic mail and cargo, under the Fly America Act.

The Company has passenger service and ground service arrangements at JFK and at Pulkovo II Airport in St. Petersburg. As a carrier designated under the U.S.-Russia agreement, Baltia is eligible to receive the same benefits in St. Petersburg that a Russian designated carrier receives when arriving in the US.

The Company intends to start the JFK-St. Petersburg service with one round-trip flight per week with progressive frequency increases to ultimately providing daily round trips. Following the commencement of service on the JFK-St. Petersburg route, Baltia's objective is to develop its route network to Russia, Latvia, Ukraine, and Belarus. Once established, the Company plans to build operating modules and apply them in developing new markets.

Additional revenues from charter flying: Following certification, the Company plans to utilize aircraft time available between scheduled service to earn additional revenues from charters and may include qualifying our aircraft for military contracts.

Since inception, the Company has been in the business of obtaining the requisite certifications of which FAA certification, alone, remains pending. The Company initiated FAA certification in New York. In December 2013, the Company terminated that process and re-initiated FAA certification in Michigan where its Base of Operations is established. On October 10, 2014, the Company passed Gate II and is currently in the third and final phase of FAA certification. Upon completion of FAA certification, Baltia will be an operating airline in the business of air transportation of passengers, cargo and mail.

As of September 30, 2014, the Company has a staff of seventy, primarily private contractors specializing in certification. Upon commencing the business of air carriage, Baltia expects to employ certain of those professional contractors who have qualified under the FAA certification procedure and have extensive major U.S. airline experience in aircraft maintenance, airline operations, airline regulatory compliance, reservation, information technology, passenger service and administration.

CRITICAL ACCOUNTING POLICIES

There have been no material changes to the Company's critical accounting policies and estimates as compared to the critical accounting policies and estimates and described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and filed on April 15, 2014, which we believe are the most critical to aid you in fully understanding and evaluating our reported financial results and the effect of the more significant judgments and estimates that we use in the preparation of our financial statements.

RESULTS OF OPERATIONS

We had no revenues during the nine months ended September 30, 2014 because we do cannot commence revenue flights until we complete the FAA certification, and cannot sell tickets until such time.

For the three month period ended September 30, 2014 and 2013, we reported general and administrative expenses of $4,361,613 and $889,476, respectively, an increase of $3,472,137, or 390%. We reported a net loss of $5,427,774 and $1,049,839, for the three months ended September 30, 2014 and 2013, respectively, an increase of $4,377,935, or 417%. This is primarily attributable to an increase of approximately $1,787,000 in common stock issued for services, an increase of $349,000 in contract costs, a $401,000 increase in insurance expense, and a $372,000 increase in compensation related expenses; these and other general administrative expenses have increased, when compared to prior periods, because of the need for the Company to ramp up its overall operations as it enters into the final stages of its certification process. In addition to the increase in general and administrative expenses, FAA certification costs increased $896,441, for the same reason general and administrative expenses increased during the three month period ended September 30, 2013.

For the nine month period ended September 30, 2014 and 2013, we reported general and administrative expenses of $9,634,461 and $4,200,139, respectively, an increase of $5,434,322, or 129%. We reported a net loss of $11,543,843 and $4,757,886, for the nine months ended September 30, 2014 and 2013, respectively, an increase of $6,785,957, or 143%. This is primarily attributable to an increase of approximately $1,533,000 in common stock issued for services, an increase of $691,000 in contract costs, a $175,000 increase in insurance expense, a $568,000 increase in compensation related expenses, and a $133,000 increase in professional fees; these and other general administrative expenses have increased, when compared to prior periods, because of the need for the Company to ramp up its overall operations as it enters into the final stages of its certification process. In addition to the increase in general and administrative expenses, FAA certification costs increased $1,319,000, for the same reason general and administrative expenses increased during the nine month period ended September 30, 2013.

Our future ability to achieve profitability in any given future fiscal period remains highly contingent upon our beginning flight operations. The management believes that the Company has the necessary funding to commence revenue flight operations, subject to completion of the FAA Air Carrier Certification. If commenced, there can be no assurance that such operations would be profitable.

LIQUIDITY AND CAPITAL RESOURCES

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred a deficit during its development stage of approximately $ 106,684,350 million and consumed approximately $35,463,568 million of cash due to its operating activities. The Company may not have adequate readily available resources to fund operations through December 31, 2014. This raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Since our inception, we have incurred substantial operating and net losses, as well as negative operating cash flows. As of September 30, 2014, our working capital deficit was $2,705,641 and our stockholders' deficit was $1,542,374. Our stockholders' equity balance at September 30, 2013 was $461,365, compared to the $1,542,374 stockholders' deficit reported as of September 30, 2014, an increase in stockholders' deficit of $2,003,739.

Our operating activities utilized $6,874,998 in cash during the nine months ended September 30, 2014, an increase of $3,549,267 from the $3,325,731in cash utilized in operating activities during the nine months Ended September 30, 2013.

For the nine months ended September 30, 2014 and 2013, our financing activities provided cash of $7,472,038 and $3,408,014, respectively, primarily from the sale of our common stock. Our unrestricted cash balance decreased to $29,566 at September 30, 2014 from $54,591 reported at September 30, 2013.

We had no significant planned capital expenditures, budgeted or otherwise, as of September 30, 2014

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Baltia plans to initiate its scheduled service with nonstop flights from New York to St.Petersburg, Russia. The current economic sanctions on Russia may impact the passengers, cargo and mail carried on those flights.

Item 4T. Controls and Procedures.

Our Chief Executive Officer and Chief Financial Officer, based on evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of September 30, 2014, have concluded that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. Our Chief Executive Officer and Chief Financial Officer also concluded that, as of September 30, 2014, our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There has been no change in our internal controls and other factors, other than as reported in the previous quarter's 10-Q and Company's Report 8K Item 4.01 on April 9, 2014. While the Company's existing controls may be adequate at present, upon the commencement of flight revenue service, we intend to implement controls appropriate for airline operations.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not subject to any material pending legal proceedings as defined in 17 CFR 229.103 (Item 103) Regulation S-K We are, however, subject to various routine legal proceedings and claims incidental to our business which we believe will not have a material adverse impact on our financial position to complete FAA Certification and initiate revenue operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the nine months ended September 30, 2014, we issued 1,450,613,042 shares of our common stock in exchange for cash. The shares are not registered, subject to restrictions as to transferability, were valued at $0.005 per share and reflect approximately 22% of the unrestricted share market value at the time of issuance.

All of the above issuances were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.

Item 3. Default Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information.

None.

Item 6. Exhibits.

3. CORPORATE CERTIFICATES AND BYLAWS

3.1.1 Certificate of Incorporation (as amended) of Baltia Air Lines, Inc.   Incorporated by reference to Exhibit 3.1.1 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013

3.1.2 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on June 24, 2011)   Incorporated by reference to Exhibit 3.1.2 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013

3.1.3 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on May 24, 2012)   Incorporated by reference to Exhibit 3.1.3 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013

3.1.4 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on December 27, 2012).   Incorporated by reference to Exhibit 3.1.4 to Baltia Air Lines Inc.'s reported on Form 10-K, for the year ended December 31, 2012, as filed April 16, 2013

3.1.5 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on July 29, 2013). Incorporated by reference to Exhibit 3.1.5 as reported on Baltia Air Lines's Form Q-10 filed 21 August 2013.

3.1.6 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on February 12, 2014). Incorporated by reference to Exhibit 3.1.6 as reported on Baltia Air Lines's Form 10-K filed April 15 2014.

3.1.7 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on June 18, 2014).Incorporated by reference to Exhibit 3.1.7 as reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

3.1.8 Certificate of Incorporation amendment of Baltia Air Lines, Inc. (as amended and filed on July 20, 2014).Incorporated by reference to Exhibit 3.1.8 as reported on Baltia Air Lines's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

3.2 Bylaws of Baltia Air Lines, Inc. (amended and ratified November 7, 2011)   Incorporated by reference to Exhibit 3.2.2 to Baltia Air Lines Inc.'s reported on Form 10-K, 21 Dec 2011 from the year ended December 31, 2010.

10. MATERIAL CONTRACTS

10.1. - Fuel supply Agreement between Joint Stock Company "SOVEX" and Baltia Air Lines, Inc. with Appendix I and Appendix II, valid as of 12/01/2013 to 12/31/2014. Incorporated by reference to Exhibit 10.1 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

10.2 - Amendment II - Aircraft Engine Lease Agreement, Logistic Air Inc., executed May 15, 2014, effective through February 1, 2015. Incorporated by reference to Exhibit 10.2 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

10.3 - Product and Services Agreements between Navtech Systems Support Inc. and Baltia Air Lines, Inc. Dated January 15, 2010 with confidential portion omitted and filed separately with the Commission pursuant to a request for confidential treatment.  Incorporated by reference to Exhibit 10.7 to Company's 10-K/A for year 2010 as filed December 21, 2011 effective to January 14, 2015.

10.4 - Ground Handling Agreement at Pulkovo Airport between ZAO Cargo Terminal Pulkovo and Baltia Air Lines, Inc. effective June 1, 2014 through May 31, 2016. Incorporated by reference to Exhibit 10.4 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

10.5 - Aircraft and/or Engine Maintenance Services Agreement between Kalitta Air, LLC and Baltia Air Lines, Inc., and Letter Agreement to Extend Aircraft Maintenance Service Agreement between Kalitta Air and Baltia Air Lines, Inc. effective December 24, 2013 until December 24, 2015 with 1-year extension with 60-day notice. Incorporated by reference to Exhibit 10.5 to Company's 10-K for 2013 filed April 15, 2014.

10.6 - First Amendment to Product and Services Agreements between Navtech Systems Support Inc. and Baltia Air Lines, Inc. dated January 15, 2010, and effective to January 15, 2015.  Incorporated by reference to Exhibit 10.10 to Company's 10-Q/A for 3rd quarter 2011, corrected and filed March 29, 2012.

10.7 Lockton Aircraft Hull, Spares and Airline Legal Liability Insurance, Baltia Air Lines, Inc. insured, effective June 15, 2014 to June 15, 2015.   Incorporated by reference to Exhibit 10.7 to Company's Form 10-Q for period ending June 30, 2014, filed August 19, 2014.

10.8 Certificate of Insurance, The Boeing Company and Boeing Commercial Airplanes insured, Hull, Aircraft and Airport Premises, including war perils, ground risks only, excluding passenger liabilities, effective January 8, 2013 to April 1, 2015.   Incorporated by reference to Exhibit 10.8 to Company's 10-K for 2013 filed April 15, 2014.

10.9 Kalitta Maintenance Agreement Certificate of Insurance, Kalitta Air, LLC insured, Hull & Liability ground only, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.9 to Company's 10-K for 2013 filed April 15, 2014.

10.10 Certificate of Insurance, Port Authority of New York and New Jersey insured, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.10 to Company's 10-K for 2013 filed April 15, 2014.

10.11 Premium Financing Agreement by Premium Assignment Corporation. Effective as of April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.11 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014

10.12 - John F. Kennedy Airport - Terminal 4, Lease Agreement between JFK International Air Terminal, LLC and Baltia Air Lines, dated November 17, 2008, effective until terminated by either party. Incorporated by reference to Exhibit 10.12 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012.

10.12.1 - Certificate of Insurance, JFK International Air Terminal LLC insured, Terminal 4 Leased space to Baltia Air Lines, Inc., effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.12.1 to Company's 10-K for 2013 filed April 15, 2014.

10.13 - JFK Airport Building 151 Lease Agreement, between Japan Airlines Management Corp. and Baltia Air Lines, effective on September 1, 2011, valid through November 30, 2015. Incorporated by reference to Exhibit 10.13 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012 as filed April 16, 2013.

10.13.1 - Certificate of Insurance, Japan Airlines Management Corp. insured, Building 151 Sublease Agreement, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.13.1 to Company's 10-K for 2013 filed April 15, 2014.

10.14 - Willow Run Airport facility lease between Wayne County Airport Authority and Baltia Air Lines, effective from June 1, 2013 until May 31, 2015.   Incorporated by reference to Exhibit 10.14 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.

10.14.1 - Amendment to Willow Run Airport facility lease, effective October 13, 2013 to May 31, 2015.   Incorporated by reference to Exhibit 10.14.1 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.

10.14.2 - Amendment to Willow Run Airport facility lease, effective February 2013 to May 21, 2015.   Incorporated by reference to Exhibit 10.14.2 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.

10.14.3 - Certificate of Insurance, Wayne County Airport Authority insured, Airport Premises, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.14.3 to Company's 10-K for 2013 filed April 15, 2014.

10.15 - Pulkovo Airport facility SubLease Agreement between LLC Northern Capital Gateway and Baltia Air Lines, effective from March 1, 2013, auto renewed unless objected to by Sublessor. Incorporated by reference to Exhibit 10.15 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014

10.16 - Contract affirmed by Board resolution affirming Agreements between the Company and its officers agreeing not to sell the shares issued to them until the Company receives FAA Certification and commence its revenue flights. Incorporated by reference to Exhibit 10.16 to Baltia Air Lines Inc.'s report on Form 10-K for the year ended December 31, 2012.

10.17 - Purchase of Cessna Citation 500 aircraft N606KR. Incorporated by reference to Form 8-K filed May 21, 2013.

10.17.1 - Certificate of Insurance, Baltia Air Lines, Inc. insured, Cessna 500 N606KR to July 26, 2014.   Incorporated by reference to Exhibit 10.17.1 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013. (NOTE: Aircraft currently not being operated.)

10.18 - Loan Agreement (amended) dated October 14, 2013 between Baltia Air Lines, Inc. and Eastern Construction & Electric, Inc. for purchase of Boeing 747 aircraft.   Incorporated by reference to Exhibit 10.18 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.

10.19 - Flight Training Agreement Aircraft Type B747-200 between Kalitta Air, LLC and Baltia Air Lines, Inc. effective October 10, 2013 to December 31, 2014.   Incorporated by reference to Exhibit 10.19 to Company's 10-Q for 3rd quarter 2013 filed November 19, 2013.

10.20 - B747 Aircraft Hull and Liability Binder - Renewal, Registration N706BL, Meadowbrook Insurance Group, effective April 1, 2014 to April 1, 2015. Incorporated by reference to Exhibit 10.20 to Company's 10-K for 2013 filed April 15, 2014.

10.21 - Purchase Report - T-500 A/C Tractor, Costal Engine Service (2013) Incorporated by reference to Exhibit 10.21 to Company's 10-K for 2013 filed April 15, 2014.

10.22 - Loan Agreement - Legal services rendered by International Business Law Firm PC to Baltia Air Lines, executed June 30, 2014. Incorporated by reference to Exhibit 10.22 to Company's 10-K for 2013 filed April 15, 2014.

10.23 - Workers Compensation and Employer Liability Insurance - CHUBB Group to Baltia Air Lines, executed June 30, 2014, effective February 6, 2014 to February 6, 2015. Incorporated by reference to Exhibit 10.23 to Company's 10-Q for period ending March 30, 2014, filed May 20, 2014.

10.24 – Cargo Handling at JFK – Cargo Airport Services USA and Baltia, valid to 1 January 2017 and continued annually until one party serves the other party with written notice not to renew.

10.25 - Security Service at JFK – FJC Security Services, Inc., valid to 9/18/15 with automatic annual renewal unless one party serves the other party with written notice not to renew.

10.26- Ground Handling at JFK - Swissport Agreement, Standard IATA Agreement of 1998 Ramp and Passenger Handling valid to May 16, 2017.

10.27- Maintenance Services Agreement, Standard IATA Agreement of 1998 with F&E Maintenance valid to May 16, 2017.

10.28 - Fuel Agreement, World Fuel Services Inc., valid to September 1, 2016.

CERTIFICATIONS

31.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Section 302, provided herewith.

32.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S. C. Section 1350, provided herewith.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized.

DATED: November 19, 2014

BALTIA AIR LINES, INC.

/s/ Igor Dmitrowsky
------------------------
Igor Dmitrowsky
Chief Executive Officer and
Chief Financial Officer (principal accounting officer)

EXHIBIT 31.1

BALTIA AIR LINES, INC.

OFFICER'S CERTIFICATE PURSUANT TO SECTION 302

I, Igor Dmitrowsky, the Chief Executive Officer and Chief Financial Officer of Baltia Air Lines, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Baltia Air Lines, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Igor Dmitrowsky
------------------------ Date: November 19, 2014
Igor Dmitrowsky
Chief Executive Officer and
Chief Financial Officer
(principal accounting officer)

EXHIBIT 31.2

BALTIA AIR LINES, INC.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report Baltia Air Lines, Inc. ("the “Company”") on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Igor Dmitrowsky, Chief Executive Officer and Chief Financial Officer (principal accounting officer) of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Baltia Air Lines, Inc. and will be retained by Baltia Air Lines, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Igor Dmitrowsky
------------------------ Date: November 19, 2014
Igor Dmitrowsky
Chief Executive Officer and
Chief Financial Officer
(principal accounting officer)