UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC 20549

                            FORM 10-KSB

               ANNUAL REPORT UNDER SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                  BALTIA AIR LINES, INC. (Baltia)
       (Exact name of registrant as specified in its charter)

   STATE of NEW YORK                         11-2989648
(State of Incorporation)          (IRS Employer Identification No.)

         63-25 SAUNDERS STREET, SUITE 7 I, REGO PARK, NY 11374
            (Address of principal executive offices)

Registrant's telephone number, including area code: (718) 275 5205

Securities Registered: 12 G #O-28502,
                       Common Stock

Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
and (2) has been subject to such filing requirements for the past 90
days. [x] yes [] no

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [x]

Baltia has not commenced revenue operations to date. Registrant's
revenues for its fiscal year 2003: $-0-

The aggregate market value of the voting common equity held by
non-affiliates computed by December 31, 2003: $7,824,877

           Class                                 Number Outstanding
    Common Stock - Par Value $.0001 Per Share        52,165,847
    Preferred Stock - $.01 Per Share                    66,500


                 DESCRIPTION OF SECURITIES

The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, $.0001 par value per share,
and 2,000,000 shares of Preferred Stock, $.01 par value.  As of
December 31, 2003, a total of 52,165,847 shares of Common Stock are
issued and outstanding and held by over 100 shareholders.  A total
of 66,500 shares of Preferred Stock are issued and outstanding.  No
stock was issued under 333-21006-NY and all securities registered
therein are carried forward into Registration 333-37409.
Registration 333-37409 was effective 2/12/99.

Common Stock

All outstanding shares of Common Stock are, and the shares offered
hereby will be, duly authorized, validly issued, fully paid and
non-assessable.  Holders of Common Stock are entitled to receive
dividends, when and if declared by the board of directors, out of
funds legally available therefor and, subject to prior rights of
holders of any Preferred Stock then outstanding, if any, to share
rateably in the net assets of the Company upon liquidation.  Holders
of Common Stock do not have preemptive or other rights to subscribe
for additional shares, nor are there any redemption or sinking fund
provisions associated with the Common Stock.  The Certificate of
Incorporation does not provide for cumulative voting.  Shares of
Common Stock have equal voting, dividend, liquidation and other
rights, and have no preference, exchange or appraisal rights.

Lack of Control by Minority Shareholders

Holders of shares of Common Stock are entitled to one vote per share
on all matters requiring a vote of stockholders.  Since the Common
Stock does not have cumulative voting rights in electing directors,
the holders of a majority of the outstanding shares of Common Stock
voting for the election of directors can elect all of the directors,
excepting one board seat reserved for a future underwriter's
nominee, if required by the underwriter.

Stock Transfer Agent

The Transfer Agent and Registrar for the shares of Common Stock is
The Nevada Agency and Trust Company, 50 West Liberty Street,
Bank of America Plaza Suite 880, Reno, Nevada 89501: Telephone
(775)322-0626.

Warrants

The Company registered Redeemable Purchase Warrants, effective
February 12, 1999.  Warrants have expired and no shares have
been issued on the Warrants.

Purchase and Sale of Warrants

No assurance can be given that a trading market for the Warrants
will develop, or if one does develop, whether it will sustain or at
what price the Warrants will trade.

Representative's Warrants

No Representative's Warrants were issued.

Preferred Stock

The Company has authorized 2,000,000 Preferred Shares which may be
issued from time to time, as authorized by the Board of Directors.
Preferred shares have $.01 par value and no voting rights.  As of
the present date 66,500 shares of Preferred Stock are outstanding.


                            BALTIA IS A CORPORATE ISSUER

The number of shares outstanding of each of the issuer's classes of
common equity, as of December 31, 2003:

     Class                                        Number of Shares

Common Stock Par Value $.0001 Per Share                 52,165,847

Preferred Stock Par Value $.01 Per Share                   66,500

Transitional Small Business Disclosure Format (Check one): No [X]

                         DOCUMENTS INCORPORATED BY REFERENCE


                               PART I

Item 1. Description of Business.

     The Company was organized in the State of New York, August 24,
1989 to provide air transportation to Russia and, the then, Soviet
Union countries.  Prior to 1999 the Company was
preparing authorities, licenses, personnel, equipment, and financing
to commence flight operations.  At the beginning of 1999 the Company
had all variables in place for commencing revenue service and needed
only working capital to meet the U.S. Department of Transportation's
regulatory requirement, i.e. cash equal to an average 1/4 of total
annual expenses assuming zero revenue on the proposed Boeing 747
nonstop flights between New York and St. Petersburg, Russia.  This
amount was to be obtained from the Company's Initial Public
Offering.  The underwriter had indications for the full offering and
offered the full amount of the offering to his exclusive clearing
agent.  The tender was refused.  The clearing agent, CIBC
Oppenheimer Corp., a wholy-owned subsidiary of the Canadian
Imperial Bank of Commerce with significant financial interests
in the airlines with which the Company would have been
competing, selectively and without rationale or notice
arbitrarily refused to clear the Company's registered stock.
Without the required working capital. The US Department
of Transportation terminated the Company's route authority without
prejudice to reapply when financing was in hand.

The Company expects to maintain over the next twelve months.  In the
absence of outside investors, management is foregoing compensation
and expects to contribute administrative costs incurred in
developing another approach to alternate funding. On November 16, 2001
the Company was listed on the pink sheets.

The Company plans no product research or development at this time
and no equipment purchases or sales.  There is no significant
change, and none expected, in the personnel disclosed in
Registration Statement 333-37409.

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 disclosed in the Registration Statement
333-37409.

Item 2.  Description of Property.

     Office equipment

Item 3. Intentionally Omitted


Item 4. Intentionally Omitted.

PART II.

Item 5.  Market for Common Equity and Related Stockholder Matters.

No shares were issued by Restrant during 2003.

Registrant has over 180 holder's of common equity.  No dividends
have been paid and it is anticipated that none will be paid
during the year 2003.

Registrant has no equity compensation plans, no written purchase,
savings, option, bonus, appreciation, profit sharing,
thrift, incentive, pension or similar plan or written compensation
contracts.  Shares were issued in 2001 upon Board approval, as
reported in relevant 10QSB filings, to principals who have
received no other compensation for services rendered.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

     The Company will proceed with obtaining alternate funds by
which to effect its plan to initiate nonstop direct flights between
New York and St. Petersburg, Russia, using Boeing 747 aircraft to
carry three-class passengers, cargo and mail as has been fully
described in Registration Statement 333-037409.  Assuming funding is
obtained and timing is appropriate, within the next twelve months
the Company will resume its flight operations plan.


Item 7. Financial Statements.


          BALTIA AIR LINES, INC.
       (a development stage company)

        REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders Baltia Air Lines, Inc.

I have audited the accompanying balance sheet of Baltia Air Lines, Inc.
(a development stage company) as of December 31, 2003  and the related
statements of operations, changes in stockholders' equity and cash
flows for the year then ended. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on my
audit. The financial statements of Baltia Air Lines, Inc. as of
 December 31, 2002 were audited by other auditors whose report
dated March 4, 2003 expressed an unqualified opinion on those
financial statements.

I conducted my audit in accordance with auditing standards
 generally accepted in the United States of America. Those
 standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for
my opinion.

In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Baltia Air Lines, Inc. as of December 31, 2003
and the results of its operations and its cash flows for
the year then ended  in conformity with accounting principles
generally accepted in the United States of America..

The Company has incurred operating losses since inception
and does not currently have sufficient capital to commence
revenue flight operations. Note 4 of the financial statements
addresses  Management's Plan regarding the future operations
of the Company.

Michael F. Cronin,
CPA Rochester. New York

April 10, 2004

<PAGE>
<TABLE>
<CAPTION>
           Baltia Air Lines, Inc.
              Balance Sheets
      (A Development Stage Company)

                                              12/31/2003     12/31/2002
           Assets
<S>                                           <C>          <C>
Current Assets                                 $    2,432   $    2,416

Property & Equipment:
Equipment                                          60,191       60,191
Accumulated Depreciation                          (40,979)     (28,171)
  Net Property & Equipment                         19,212       32,020

Other:
Lease deposit on airplane                          50,000            0


Total Assets                                    $  71,644   $   34,436

Liabilities & Equity

Current Liabilities:
Accounts Payable                                $     700          700

Equity:
Preferred stock - 2,000,000
  authorized $0.01 par value
  66,500 issued & outstanding
  (275,250 in 2002)                                   665        2,753

Common Stock - 100,000,000
  authorized $0.0001 par value
  52,165,847 issued & outstanding
  (48,679,757 in 2002)                              5,217        4,868
Additional paid in capital                      8,291,223    8,151,370

Deficit Accumulated During
  Development Stage                            (8,226,161)  (8,125,255)

Total Equity                                   $   70,944  $    33,736

Total Liabilities & Equity                     $   71,644  $    34,436

See Summary of Significant Accounting Policies and Notes to Financial Statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Baltia Air Lines, Inc.
Statements of Operations
(A Development Stage Company)

                                                      Fiscal Years Ended          Inception to
                                                  12/31/2003      12/31/2002      12/31/2003
<S>                                            <C>             <C>              <C>
Revenue                                         $          0    $          0     $          0

Costs & Expenses
 General & administrative
 FAA certification costs                                   0               0          206,633
 Training                                                  0               0          225,637
 Depreciation                                         12,808          12,808          286,652
 Other                                                     0          52,812          568,245
 Interest                                                  0               0        1,066,659

Loss before income taxes                            (100,581)        (76,106)      (8,225,338)

Income Taxes                                             325               0              823

Deficit Accumulated During Development Stage    $   (100,906)   $    (76,106)    $ (8,226,161)

Per share amounts:
Basic & Diluted:
  Loss                                          $      (0.00)          (0.00)
  Weighted Average                                49,769,573      48,679,757

See Summary of Significant Accounting Policies and Notes to Financial Statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Baltia Air Lines, Inc.
Statements of Cash Flows
(A Development Stage Company)

                                                            Fiscal Years Ended            Inception to
                                                         12/31/2003     12/31/2002        12/31/2003
<S>                                                     <C>            <C>               <C>
Cash flows from operating activities:
Deficit Accumulated During Development Stage             $  (100,906)   $  (76,106)       $ (8,226,161)
Adjustments required to reconcile deficit accumulated
  during development stage to cash used in operating
  activities:
Depreciation                                                  12,808        12,808             286,652
Expenses paid by issuance of common stock                        402             0              63,902
(Increase) decrease in prepaid expenses                            0        52,812             400,301
Increase (decrease) in accounts payable & accrued expenses         0        (3,179)          3,152,181
Cash flows used by operating activities:                     (87,696)      (13,665)         (4,323,125)

Cash flows from investing activities:
Purchase of equipment                                              0             0            (309,066)
Deposit on airplane lease                                    (50,000)            0             (50,000)
Cash used in investing activities                            (50,000)            0            (359,066)

Cash flows from financing activities:
Proceeds from issuance of common stock                       137,712        12,877           4,199,287
Proceeds from issuance of preferred stock                          0             0               2,753
Loans from related parties                                         0             0           1,351,573
Repayment of related party loans                                   0             0            (368,890)
Acquisition of treasury stock                                      0             0            (500,100)
 Cash generated by financing activities                      137,712        12,877           4,684,623

Change in cash                                                    16          (788)              2,432
Cash-beginning of period                                       2,416         3,204                   0
Cash-end of period                                           $ 2,432    $    2,416        $      2,432

See Summary of Significant Accounting Policies and Notes to Financial Statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Baltia Air Lines, Inc.
Statements of Shareholders' Equity
(A Development Stage Company)
                                            Preferred                       Common                 Deficit
                                                                                                   Accumulated
                                                                         Common    Additional      During Development
                                                Par                      Stock     Paid-In         Stage
                                      Shares   Value        Shares       Amount    Capital
<S>                                <C>       <C>        <C>           <C>        <C>                <C>
Balance at December 31, 2001         275,250 $ 2,753      48,679,757   $ 4,868    $ 8,138,593        $  8,049,149)
Contribution of Additional Capital                                                     12,877
Net Loss                                                                                                  (76,106)
Balance at December 31, 2002         275,250   2,753      48,679,757     4,868      8,151,470          (8,125,255)

Exercise of Warrants and Options                           2,934,662       293         86,906
Stock issued for cash                                        696,428        70         50,442
Stock issued for services                                   (145,000)      (15)           417
Eliminated Treasury Stock Account                                                        (100)
Correct error in Preferred Stock    (208,750) (2,088)                                   2,088
Net Loss                                                                                                 (100,906)
Balance at December 31, 2003          66,500 $   665       52,165,847   $ 5,217    $ 8,291,881        $ (8,226,161)

See Summary of Significant Accounting Policies and Notes to Financial Statements
</TABLE>

<PAGE>
             BALTIA AIR LINES, INC.
        ( a development stage company )
                 BACKGROUND
     AND SIGNIFICANT ACCOUNTING POLICIES
               December 31, 2003

The Company

The Company was formed as a U.S. airline on August 24, 1989
in the State of New York. Our objective is to provide scheduled
air transportation from the U.S. to Russia, the Baltic States
and Ukraine.  In 1991, the Department of Transportation (DOT)
granted the Company routes to provide non-stop passenger, cargo
and mail service from JFK to St. Petersburg and from JFK to Riga,
with online service to Minsk, Kiev and Tbilisi as well as back up
service to Moscow. We have two registered trademarks "BALTIA" and
"VOYAGER CLASS," and five trademarks subject to registration.
Our activities to date have been devoted principally to raising
capital, obtaining route authority and approval from the DOT and
the FAA, training crews, and conducting market research to develop
the Company's marketing strategy.

Regulatory Compliance

We intend to operate as a Part 121 carrier, a heavy jet operator.
As such, following certification we will be required to maintain
our air carrier standards as prescribed by DOT and FAA regulation
and as specified in the FAA approved Company manuals.  As part of
its regulatory compliance we will be required to submit periodic
reports of our operations to the DOT.

Basis of Presentation

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 Route
Authority and approval from the U.S. Department of Transportation.
We have not commenced our principal revenue producing activities.

Significant Accounting Policies:

Use of Estimates The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
the estimates.

Cash and Cash Equivalents: For financial statement presentation
purposes, the Company considers those short-term, highly liquid
investments with original maturities of three months or less to
be cash or cash equivalents.

Property and Equipment Property and equipment are recorded at
cost. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets, generally 5 years.
Expenditures for renewals and betterments are capitalized.
Expenditures for minor items, repairs and maintenance are
charged to operations as incurred. Gain or loss upon sale
or retirement due to obsolescence is reflected in the operating
results in the period the event takes place. Preoperating costs
related to the integration of new types of aircraft are charged
to expense as incurred. The cost of modifications to the
aircraft interior are capitalized and depreciated over the
lesser of the life of the aircraft or the life of the modification.
For the years ended December 31, 2003 and 2002, depreciation
expense amounted to $12,808 for each year.

Valuation of Long-Lived Assets: We review the recoverability
of our long-lived assets including equipment, goodwill and
other intangible assets, when events or changes in circumstances
occur that indicate that the carrying value of the asset may not
be recoverable. The assessment of possible impairment is based on
our ability to recover the carrying value of the asset from the
expected future pre-tax cash flows (undiscounted and without
interest charges) of the related operations. If these cash flows
are less than the carrying value of such asset, an impairment loss
is recognized for the difference between estimated fair value and
carrying value. Our primary measure of fair value is based on
discounted cash flows. The measurement of impairment requires
management to make estimates of these cash flows related to
long-lived assets, as well as other fair value determinations.

Revenue Recognition: Passenger revenue is recognized when the
passenger travels. Tickets sold but not yet used are reported
as air traffic liability. Freight and mail revenues are
recognized when service is provided.

Stock Based Compensation: Stock-based awards to non-employees
are accounted for using the fair value method in accordance
with SFAS No. 123, Accounting for Stock-Based Compensation,
and EITF Issue No. 96-18, Accounting for Equity Instruments
that are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling Goods or Services. All transactions
in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on
the fair value of the consideration received or the fair value
of the equity instrument issued, whichever is more reliably
measurable. The measurement date used to determine the fair
value of the equity instrument issued is the earlier of the
date on which the third-party performance is complete or the
date on which it is probable that performance will occur.

 In December 2002, the Financial Accounting Standards Board
("FASB") issued SFAS No. 148, Accounting for Stock-Based
Compensation --- Transition and Disclosure, effective for fiscal
years ending after December 15, 2002. SFAS No. 148 amends
SFAS No. 123 to provide alternative methods of transition to
the fair value method of accounting for stock-based employee
compensation. SFAS No. 148 also amends the disclosure provisions
of SFAS No. 123 to require disclosure in the summary of
significant accounting policies of the effects of an entity's
accounting policy with respect to stock-based employee
compensation on reported net income and earnings per share
in annual and interim financial statements. SFAS No. 148
does not amend SFAS No. 123 to require companies to account
for their employee stock-based awards using the fair value
method. The disclosure provisions are required, however, for
all companies with stock-based employee compensation, regardless
of whether they utilize the fair value method of accounting
described in SFAS No. 123 or the intrinsic value method
described in Accounting Principles Board ("APB") Opinion
No. 25, Accounting for Stock Issued to Employees.

We account for stock-based awards to employees using the
intrinsic value method in accordance with APB Opinion No. 25
and FIN No. 44. As permitted by SFAS No. 123, as amended by
SFAS No. 148, we have chosen to continue to account for our
employee stock-based compensation plans under APB Opinion
No. 25 and provide the expanded disclosures specified in
SFAS No. 123, as amended by SFAS No. 148.

We have adopted the disclosure requirements of SFAS No. 148
effective January 1, 2003. The adoption of this standard had
no impact on the our financial condition or operating results.

Fair Value of Financial Instruments: Statements of Financial
Accounting Standards No. 107, "Disclosures about Fair Value
of Financial Instruments," requires disclosure of fair value
information about financial instruments. Fair value estimates
discussed herein are based upon certain market assumptions and
pertinent information available to management as of December 31,
2002. The respective carrying value of certain on-balance sheet
financial instruments approximated their fair values.

These financial instruments include cash and cash equivalents,
accounts payable and accrued expenses. Fair values were assumed
to approximate carrying values for these financial instruments
since they are short-term in nature and their carrying amounts
approximate fair values or they are receivable or payable on demand.

Earnings per Common Share: Basic net loss per share is computed
using the weighted average number of common shares outstanding
during the period.  Diluted net loss per common share is computed
using the weighted average number of common and dilutive equivalent
shares outstanding during the period. Dilutive common equivalent
shares consist of options to purchase common stock (only if those
options are exercisable and at prices below the average share
price for the period) and shares issueable upon the conversion
of our Preferred Stock. 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.

If we had generated earnings during the year ended December 31,
2003, we would have added 3,970,662 common equivalent shares, to
the basic weighted average shares outstanding to arrive at diluted
weighted average shares outstanding. This consists of 3,771,162
stock options and warrants outstanding and exercisable with exercise
prices below the average share price for the period and 199,500
shares issuable upon the conversion or our Preferred Stock.
Income Taxes: The Company accounts for income taxes in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," ("SFAS 109") which requires recognition of estimated
income taxes payable or refundable on income tax returns for the current
year and for the estimated future tax effect attributable to temporary
differences and carry-forwards. Measurement of deferred income tax is
based on enacted tax laws including tax rates, with the measurement of
deferred income tax assets being reduced by available tax benefits not
expected to be realized.

Recent Accounting Pronouncements

In June, 2001, the Financial Accounting Standards Board issued Statement
of Financial Standards No. 141, "Business Combinations" (SFAS 141), and
No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 141
is effective for business combinations completed after June 30, 2001,
and SFAS 142 is effective for fiscal years beginning after December 15,
2001.

SFAS 141 proscribes the exclusive use of the purchase method of accounting
for all business combinations subsequent to the effective date. SFAS 142
mandates that acquired goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized. Rather, goodwill and these
intangibles will be subject to regular impairment tests in accordance
with SFAS 142. All other intangible assets will continue to be
amortized over their estimated useful lives.

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 143, "Accounting
for Asset Retirement Obligations" (SFAS 143). SFAS 143 addresses
financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated
retirement costs. SFAS 143 is effective for the fiscal years
beginning after June 15, 2002.

SFAS 143 is expected to improve financial reporting because
all asset retirement obligations that fall within the scope
of this Statement and their related asset retirement cost
will be accounted for consistently and financial statements
of different entities will be more comparable. As provided
for in SFAS 143, we have elected early adoption of this
statement in our fiscal year beginning January 1, 2002.
In August 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived
Assets ("SFAS 144"). SFAS 144 addresses financial accounting
and reporting for the impairment or disposal of long-lived
assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting provisions
of APB Opinion No. 30, "Reporting the Results of Operations
Reporting the Effects of Disposal of a Segment of a Business.
SFAS 144 is effective for fiscal years beginning after December
15, 2001 (with early adoption permitted under certain circumstances).
SFAS 144 is expected to improve financial reporting by requiring
that one accounting model be used for long-lived assets to be disposed
of by sale, whether previously held and used or newly acquired, and
by broadening the presentation of discontinued operations to include
more disposal transactions.

As provided for in SFAS 144, we have elected early adoption of this
statement in our fiscal year beginning January 1, 2002.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Exit
or Disposal Activities." This statement addresses the recognition,
measurement, and reporting of costs associated with exit and disposal
activities. SFAS No. 146 is applicable to restructuring activities
and costs related to terminating a contract that is not a capital
lease and one time benefit arrangements received by employees who
are involuntarily terminated. SFAS No. 146 supersedes EITF Issue
No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." Under SFAS No. 146 the cost
associated with an exit or disposal activity is recognized in the
periods in which it is incurred rather than at the date the Company
committed to the exit plan. This statement is effective for exit
or disposal activities initiated after December 31, 2002, with
earlier adoption encouraged. Previously issued financial statements
will not be restated. The provisions of EITF Issue No. 94-3 will
continue to apply for exit plans initiated prior to the adoption
of SFAS No. 146. As of December 31, 2003, management has not
determined the impact of SFAS No. 146 on the Company's financial
statements.

In January 2003, FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities ("FIN 46"). In general, a variable
interest entity is a corporation, partnership, trust or any other
legal structure used for business purposes that either (a) does
not have equity investors with voting rights or (b) has equity
investors that do not provide sufficient financial resources for
the entity to support its activities. FIN 46 requires certain
variable interest entities to be consolidated by the primary
beneficiary of the entity if the investors do not have the
characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support
from other parties. The consolidation requirements of FIN 46
apply immediately to variable interest entities created after
January 31, 2003. The Company adopted the provisions of FIN
46 effective February 1, 2003 and such adoption did not have
a material impact on its consolidated financial statements since
it currently has no variable interest entities. In December 2003,
the FASB issued FIN 46R with respect to variable interest entities
created before January 31, 2003, which among other things, revised
the implementation date to the first fiscal year or interim period
ending after March 15, 2004, with the exception of Special Purpose
Entities ("SPE). The consolidation requirements apply to all SPE's
in the first fiscal year or interim period ending after December 15,
2003. The Company adopted the provisions of FIN 46R effective
December 29, 2003 and such adoption did not have a material impact
on its consolidated financial statements since it currently has no SPE's.

<PAGE>
              BALTIA AIR LINES, INC.
          (a development stage company)
         NOTES TO FINANCIAL STATEMENTS
                December 31, 2003

1. Income Taxes:
The Company has approximately $7,700,000 in net operating loss
carryovers available to reduce future income taxes. These
carryovers expire at various dates through the year 2021. The
Company has adopted SFAS 109 which provides for the recognition
of a deferred tax asset based upon the value the loss carry-forwards
will have to reduce future income taxes and management's estimate of
the probability of the realization of these tax benefits. We have
determined it more likely than not that our net operating loss
carry-forwards will not be utilized; therefore we have provided
for a valuation allowance against the related deferred tax asset
A summary of the deferred tax asset presented on the accompanying
balance sheets is as follows:

<TABLE>
<CAPTION>
                                                                  December 31,       December 31,
                                                                      2003               2002
<S>                                                           <C>                  <C>
Federal Deferred Tax Asset Relating to Net Operating Losses    $    2,000,852       $  1,966,960

State Deferred Tax Asset Relating to Net Operating Losses             511,726            503,059

Less: Valuation Allowance                                          (2,512,578)        (2,470,019)

Total Deferred Tax Asset                                       $            0       $          0

</TABLE>

2. Commitments:

            Facilities

The Company leases its office space for its administrative offices,
under a month to month agreement, at a monthly rental of
approximately $ 800.

            Airplane Lease

On December 16, 2003 we signed a Letter of Intent, and remitted
a $ 50,000 deposit to secure an operating lease on a 316 seat
aircraft. Delivery was postponed and the $ 50,000 was returned
pending a rescheduling of the delivery date.

3. Stockholders' Equity:

          Preferred Stock

 We are authorized to issue up to a maximum of 2 million shares
(66,500 shares outstanding) of Preferred  Stock.  We can issue
these shares as our board of directors shall from time to time
fix by resolution.

Our Preferred Stock is not entitled to share in any dividends
declared on the Common Stock and has no voting rights. Each share
is convertible in to 3 shares of Common. The liquidation preference
is set by this conversion formula and results in a pro rata claim
on the Company's assets based upon the underlying common shares
issuable (199,500) upon conversion.

 Stock Issued for Cash

In August 2003, we issued 696,428 shares of our common stock
for a total of $50,512.  The shares are not registered and
subject to restrictions as to transferability.

Stock Issued for Services

In 2003, we issued 10,000 shares of our common stock in
exchange for services.  The shares were valued at $ 402 or
$0.04 per share which approximated the market value at the
time of issuance. The shares are not registered and are subject
to restrictions as to transferability. We also issued 20,000
shares to correct a prior issuance and cancelled 175,000 shares
issued in error in a previous fiscal year.

Stock Issued Due to Exercise of Warrants & Options

During 2003 holders of 2,934,662 warrants, registered in our 1999
registration statement,  exercised their option to acquire a like
amount of shares of Common Stock. The options were at various
exercise prices and resulted in proceeds of $ 81,200.

Stock Based Compensation

Stock based compensation is accounted for by using the intrinsic
value based method in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). The Company has adopted Statements of Financial
Accounting Standards No. 123, "Accounting for Stock Based
Compensation, ("SFAS 123") which allows companies to either
continue to account for stock based compensation to employees
under APB 25, or adopt a fair value based method of accounting.
The Company has elected to continue to account for stock based
compensation to employees under APB 25. APB 25 recognizes
compensation expense for options granted to employees only
when the market price of the stock exceeds the grant exercise
price at the date of the grant. The amount reflected as compensation
expense is measured as the difference between the exercise price and
the market value at the date of the grant.

There were no employee or non-employee options granted in either
fiscal year ended December 31, 2003 or 2002.

            Warrants and Options

No warrants or options were granted in 2003. The following table
summarizes warrants and options outstanding at December 31, 2003:

<TABLE>
<CAPTION>

                                                        Weighted       Weighted
                                                        Average        Average
                                                        Exercise       Fair
                                       Shares           Price          Value
<S>                                   <C>              <C>            <C>
Balance 1/1/03                          46,445,824        $0.0001         Nil
Granted during 2003                              0        $0.00           Nil
Exercised/Lapsed during 2003            (2,934,662)       $0.03           Nil
Balance 12/31/03                        43,511,162        $0.0001         Nil

<CAPTION>
    Options Outstanding & Exercisable at 12/31/03:       Options Outstanding at 12/31/03:
                              Weighted                                          Weighted
                              Average                                           Average
                              Remaining     Weighted                            Remaining     Weighted
     Range of                 Contractual   Average      Range of               Contractual   Average
     Exercise                 Life in       Exercise     Exercise               Life in       Exercise
     Prices      Shares       Months        Price        Prices     Shares      Months        Price
    <C>         <C>          <C>           <C>          <C>       <C>          <C>           <C>
     $ 0.0001    3,771,162      2.0         $ 0.03       $ 0.0001   39,740,000   60.0         $ 0.0001
</TABLE>

The outstanding options of 39,740,000 are primarily granted
to management and vest upon the completion of the first revenue flight.

4. Management's Plan of Operation.

We do not currently have sufficient capital to commence
revenue flight operations and must rely on additional sources
of financing in order to maintain our current level of operations.
During 2003 and into 2004 we continued to finance our operations
through the issuance of our common stock and the continued exercise
of warrants associated with our 1999 public offering. Until revenue
operations begin, our monthly expenditures for administrative and
regulatory compliance can be controlled at about $1,500-$2,000.
Based on current reserves we have sufficient capital to support
our development stage operations through the end of 2004.

In 2004 we plan to raise $1 to 1.3 mm in a private placement in
order to start revenue flight operations.  Based on our prior
experience with certification and current preparations the management
believes that the launch budget, previously reviewed by the DOT, will
be adequate to complete certification and to commence flight service.
Approximately $300,000 is budgeted for aircraft, $450,000 for
certification tasks, and $300,000 for general and administrative
expenses. At the time flight service is inaugurated the company
plans to have approximately 15 management and 45 staff personnel.

Management has considered the overall pipeline effect that enhances
the initial cash position of a startup carrier. It is the industry
practice for passengers to purchase tickets in advance of their
flights while service vendors bill the carrier later.

In order that a new airline would not fly empty on day one,
approximately 30 days prior to the expected inaugural date the
DOT authorizes sales of tickets and cargo. Such funds from advance
sales, estimated at approximately $3 mm for the company, accumulate
in an escrow account, and are released upon the issuance of the
air carrier certificate.

There can be no assurance that additional financing will be
available on terms favorable to us or at all.  If adequate funds
are not available or are not available on acceptable terms, we
may not be able to fund expansion.


Item 8.  Intentionally Omitted.

                           PART III

Item 9.  Directors, Executive officers, Promoters and Control
Persons:
                       MANAGEMENT

Executive Officers and Directors

<TABLE>
<CAPTION>
The following table summarizes certain information with respect
to the executive officers and directors of the board <FN1>:

Name                     Age  Position
<S>                     <C>  <C>
Igor Dmitrowsky . . . .  48   President, CEO, Director of the Board
Walter Kaplinsky  . . .  64   Secretary and Director of the Board
Andris Rukmanis . . . .  41   V.P. Europe and Director of the Board
Anita Schiff-Spielman    48   Director of the Board

<FN>
<FN1>
(1)  The bylaws limit the number of directors on the
     board to a maximum of four, with a provision that an
     additional seat on the board is created for a future
     Underwriter's designee for a period of five years, if
     required by the underwriter.  Officers and Directors
     have a one year term and are elected at, and after, the
     Annual Meeting in August.
</FN>
</TABLE>

Igor Dmitrowsky, President and Chief Executive Officer, founded
the Company and served as Chairman of the Board from its
inception in August 24, 1989 to date. Mr. Dmitrowsky, a US
citizen, born in Riga, Latvia, attended the State University of
Latvia from 1972 to 1974 and Queens College from 1976 through 1979.
In 1979, he founded American Kefir Corporation, a dairy distribution
company, which completed a public offering in 1986, and from
which he retired in 1987.  Mr. Dmitrowsky has financed aircraft
and automotive projects, speaks fluent Latvian and Russian, and
has traveled extensively in the republics of the former Soviet
Union.  In 1990, he testified before the House Aviation
Subcommittee on the implementation of United States' aviation
authorities by US airlines.

Walter Kaplinsky, a US citizen, has been with the Company since
1990.  Mr. Kaplinsky has been corporate secretary and a director
of the board since 1993.  In 1979, together with Mr. Dmitrowsky,
Mr. Kaplinsky was one of the co-founders of American Kefir
Corporation, where from 1979 through 1982, Mr. Kaplinsky served
as secretary and vice president.

Andris Rukmanis, a citizen of Latvia, is the Company's Vice
President in Europe.  Mr. Rukmanis joined the Company in 1989.
In Latvia, Mr. Rukmanis has worked as an attorney specializing in
business law.  From 1988 through 1989, he was Senior Legal Counsel
for the Town of Adazhi in Riga County, Latvia.  From 1989 to 1990,
he served as Deputy Mayor of Adazhi.

Anita Schiff-Spielman, a US citizen, serves as a director of the
board. She has been associated with the Company since its
inception in 1989.  Ms. Schiff-Spielman has owned Schiff Dental
Labs, New York, NY, for the past seventeen years.

Item 10.  Executive Compensation.  Management, Compensation.

Employment Agreements

The Company has no individual employment agreements.

Compensation

The board of directors approves salaries for the Company's
executive officers as well as the Company's overall salary
structure.  For year one following the closing of financing
sufficient to commence flight operations, the rate of
compensation for the Company's executive officers is:(i)
President $186,000, (ii) Vice President Marketing $82,000,and
(iii) Vice President Europe $68,000.  To this date, the Company
has paid officers no salaries. Board directors are not presently
compensated and shall receive no compensation prior to
commencement of revenue service.

Item 11.  Security Ownership of Certain Beneficial Owners and
Management.

  Principal Stockholders.

<TABLE>
                 PRINCIPAL STOCKHOLDERS
<CAPTION>

The following table sets forth, as of December 31, 2002, the
ownership of the Company's Common Stock by (i)each director and
officers of the Company, (ii) all executive officers and
directors of the Company as a group, and (iii) all other persons
known to the Company to own more than 5% of the Company's Common
Stock.  Each person named in the table has or shares voting and
investment power with respect to all shares shown as beneficially
owned by such person.

                               Common Shares
                            Beneficially Owned    Percent of Total
 Directors and Officers

<S>                                <C>                 <C>
Igor Dmitrowsky . . . . . .         24,422,825           46.82%
63-26 Saunders St., Suite 7I
Rego Park, NY 11374

Walter Kaplinsky  . . . . .          3,717,294            7.13%
  2000 Quentin Rd.
Brooklyn, NY 11229

Andris Rukmanis . . . . . .            638,750            1.22%
  Kundzinsala, 8 Linija 9.
Riga, Latvia LV-1005

Anita Schiff-Spielman . . .             13,118            0.03%
  1149 Kensington Rd.
Teaneck, NJ 07666

Counsel

Steffanie J. Lewis . . . . .          5,623,331           10.78%
  3511 North 13th St.
Arlington, VA 22201

5% or more Shareholder

</TABLE>

Item 12.  Intentionally omitted.


Item 13.  Intentionally omitted.

                       SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                         Baltia Air Lines, Inc., Registrant


Date: 07-26-2004        _______ IGOR DMITROWSKY _______
                        By: Igor Dmitrowsky, President

Date: 07-26-2004        _______ WALTER KAPLINSKY ______
                        By: Walter Kaplinsky, Secretary

                SIGNATURES and CERTIFICATIONS

I, Igor Dmitrowsky, the Registrant's Chief Executive Officer, certify that:

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

2. Based on my knowledge, this annual 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 annual report;

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

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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 annual report is being
prepared; b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented
in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):  a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Registrant's internal
controls; and

6. The Registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

   Date: July 26, 2004  ____IGOR DMITROWSKY (signed)_________
                        By: Igor Dmitrowsky, Chief Executive Officer

I, Igor Dmitrowsky, the Registrant's Chief Financial Officer, certify that:

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

2. Based on my knowledge, this annual 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 annual report;

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

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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 annual report is being
prepared; b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented
in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The Registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of Registrant's board of directors (or persons
performing the equivalent function):  a) all significant deficiencies
in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's auditors any
material weaknesses in internal controls; and b) any fraud, whether or
not material, that involves management or other employees who have a
significant role in the Registrant's internal controls; and

6. The Registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

   Date:  July 26, 2004  ______ IGOR DMITROWSKY (signed) _____
                         By: Igor Dmitrowsky, Chief Financial Officer

BALTIA AIR LINES, INC., Registrant

  Date: 07-26-2004    ______ IGOR DMITROWSKY (signed) _____
                      By: Igor Dmitrowsky, President

  Date: 07-26-2004    ____ WALTER KAPLINKSY (signed)_____
                      By: Walter Kaplinsky, Secretary
[bltk03.txt/2004-07-24]