UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC 20549

                            FORM 10-K/A

    Mark One

       [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

       [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from         to

               Commission File Number: 001-14519

               Date of Report:    May 11, 2011

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

       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


   Title of each class             Name of each Exchange
                                    on which registered

      -None-                            -None-

Securities Registered pursuant to Section 12(g) of the Exchange Act:

Common Stock,            $.0001 Par Value
(Title of Class)

Indicate by check mark if the Registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
   Yes [  ]      No  [X]

Indicate by check mark if the Registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Act.

   Yes [  ]      No [X]

Indicate by check mark whether the Registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes  [X]       No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.


Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act. (Check one):

Large accelerated filer [ ]           Accelerated filer  [ ]

Non-accelerated filer   [ ]        Smaller reporting company  [X]

Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act of 1934).
      Yes [ ] No [X]

The aggregate market value of the voting common equity held by
non-affiliates as of June 30, 2010 is $20,913,294.

The number of shares of the registrant's common stock outstanding as of
April 7, 2011 was 1,150,636,026.

    TABLE OF CONTENTS

PART 1

Item 1.   Business
Item 1A.  Risk Factors
Item 1B.  Unresolved Staff Comments
Item 2.   Properties
Item 3.   Legal Proceedings

PART II

Item 5.   Market for Registrant's Common Equity, Related Stockholder
           Matters and Issuer Purchases of Equity Securities
Item 6.   Selected Financial Information
Item 7.   Management's Discussion and Analysis of Financial Condition
           and Results of Operations
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
Item 8.   Financial Statement Supplementary Data
Item 9.   Changes in and Disagreements with Accountants on Accounting
           And Financial Disclosures
Item 9A   Controls and Procedures
Item 9B   Other Information

PART III

Item 10.   Directors and Executive Officers of the Registrant
Item 11.   Executive Compensation
Item 12.   Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters
Item 13.   Certain Relationships and Related Transactions
Item 14.   Principal Accountant Fees and Services

PART IV

Item 15.   Exhibits and Financial Statements

<PAGE>

PART I

Item 1. Business.

Baltia Air Lines, Inc. (the "Company" or "Baltia" or "Baltia Air Lines")
is the only Part 121 (heavy jet operator) start-up airline in the United
States today that has received Government fitness approval.  Baltia is
currently conducting the FAA Air Carrier Certification. Baltia Air Lines,
Inc. is a New York State corporation.

On December 19, 2008, the U.S. Department of Transportation (DOT) issued
its Order to Show Cause, finding that Baltia Air Lines is fit, willing
and able to engage in international air transport of persons, property
and mail.  Baltia was awarded the non-stop route from JFK International
Airport, New York, New York to Pulkovo International Airport, St.
Petersburg Russia. Baltia was also authorized for worldwide charter
services. Baltia had filed its application with the DOT in October 2007.

On March 20, 2009 the DOT awarded Baltia Air Lines its initial
frequencies for flights from JFK to St. Petersburg.

On August 18, 2009, the Company purchased its first Boeing 747 aircraft
from Logistic Air, Inc.

In the first quarter of 2010, we leased engines on a power by the hour
basis from Logistic Air, Inc. The engines have been delivered and
installed on the aircraft.

Baltia Air Line's operations are based at Terminal 4, JFK. We have made
key operating arrangements at JFK and other service arrangements are in
the process of being made.

In the first quarter of 2010, Baltia leased its station facilities from
Pulkovo Airport, entered into a fuelling agreement with SOVEX (the
exclusive fueling company at Pulkovo Airport), entered into agreement
with Pulkovo Caro facility and customs for cargo processing, and entered
into a ground servicing agreement with Pulkovo Airport.

In the last quarter of 2010, we purchased our second Boeing 747 aircraft
from Kalitta Air.

Baltia currently carries $500,000,000 aircraft liability insurance, and
has placed $1.2 billion airline liability insurance through JLT Aerospace
meeting the regulatory requirement in preparation for the commencement of
revenue service.

Baltia is currently conducting the FAA Air Carrier Certification process
under Part 121.

Upon completion of the Air Carrier Certification, Baltia intends to
commence scheduled non-stop service from its Base of Operations at
Terminal 4, JFK Int'l Airport in New York to Pulkovo II Int'l Airport of
St. Petersburg.

Baltia Air Lines, Inc. was organized in the State of New York on August
24, 1989.

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.

Baltia intends to provide full service, i.e. passenger, cargo and mail,
and will not be dependent upon one or a few major customers. Baltia has two
registered trademarks "BALTIA" and "VOYAGER CLASS" and five trademarks
are subject to registration.

There is currently no non-stop service from JFK to St. Petersburg.
Connecting service is provided mainly by foreign 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, foreign carriers are
required to have intermediate stops at transit airports in their
respective countries (Helsinki, Frankfurt, Stockholm, Copenhagen, etc.)
because they are "third nation" airlines and as such cannot fly directly
between the US and Russia (only a US airline as well as a reciprocating
Russian airline is eligible to fly nonstop). Delta and two Russian
airlines, Aeroflot and Transaero, currently operate 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 can reapply.

Baltia's objective is to establish itself as the leading non-stop carrier
in the market niche over the North Atlantic with operations that are
profitable and growing 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
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.

Baltia's initial marketing strategy is based on existing agencies
specializing in the market, selected travel and business publications,
supplemented by direct mailings to corporate travel planners, and
individual American businesses that are currently involved in 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 provide 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 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 direct non-stop service to be offered by it will
be superior to the stop-over service currently offered by foreign
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.

Baltia plans to operate efficiently and provide consistent high quality
service to passengers and cargo shippers alike in order to establish the
Company as the preferred airline in the market in comparison to its
competitors. The Company also plans to use targeted marketing of its
service to maintain and grow its market share.

Because of the increased reliability and comfort of a non-stop flight,
Baltia expects to capture a portion of the existing traffic.  Further, US
government traffic is required by law (Fly America Act) to fly on a US
Flag carrier when service is available.

With the Boeing 747 true wide-body aircraft Baltia intends to provide
cargo service from JFK to St. Petersburg, offering containers, pallets,
and block space arrangements. Baltia expects to carry contract cargo for
express shippers.  Baltia also plans to market its own "Baltia Courier",
"Baltia Express", and "Baltia Priority" express service for letters and
packages.  Baltia also expects revenues from diplomatic mail and cargo,
under the Fly America Act.

Baltia has passenger service and ground service arrangements at JFK and
at Pulkovo II Airport in St. Petersburg. As a US carrier flying into a
foreign country, Baltia will be eligible to the same degree of priority
that a foreign carrier receives when arriving in the US.

Baltia intends to start the JFK-St. Petersburg service with one round-
trip flight per week, then increase the frequency to three round trips,
and then to five round trips, within a four-month period.

Baltia has been preparing standards for service. The care taken in
establishing high standards has implications beyond the launching of the
JFK-St. Petersburg flight.  Baltia plans to build operating modules and
apply that know-how to develop new markets. Once established, Baltia
plans to duplicate its JFK-St. Petersburg standards on flights on other
transatlantic routes. By the end of year one, Baltia plans to introduce
three additional aircraft.

Additional revenues from charter flying. In conjunction with its Part 121
air carrier certification ("Part 121"), (referring to a Federal Aviation
Regulations' number, is an industry acronym used to describe a US airline
operating heavy jet aircraft) for scheduled service, Baltia intends to
seek certification for world wide charter service. Following
certification, Baltia plans to utilize aircraft time available between
scheduled service, to earn additional revenues from charters. We are also
considering qualifying our aircraft for military contracts.

The Company will carry airline liability insurance as required for a US
airline by DOT regulation.

As of December 31, 2010, Baltia had twenty full-time employees and
fifteen part-time employees. Baltia's staff includes professionals who
have extensive major US airline experience in aircraft maintenance,
airline operations, airline regulatory compliance, reservation, info
technology, passenger service, and administration.

Item 1A.  Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.

Item 1B.  Unresolved Staff Comments.

We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.

Item 2.  Properties.

The Company rents space at Concourse A, Terminal 4, JFK International
Airport, at a monthly rent of $26,370.  The Company believes its property is
adequate to launch its services and the Company expects to increase space
within the first few months of operations.

Item 3. Legal Proceedings.

None.

Item 4. Reserved

PART II.

Item 5.  Market for Registrant's Common Equity, Related Stockholder
           Matters and Issuer Purchases of Equity Securities.

The following table sets forth the high and low sales prices, as quoted
by the OTCBB, for our common stock for each quarter during our two most
recent fiscal years ended December 31, 2009 and 2010. These quotations
reflect inter-dealers prices, without retail mark-ups, mark-downs or
commissions, and may not represent actual transactions.


      Fiscal Quarter Ended         High         Low
--------------------------- --------------- ----------------
        March 31, 2009                  .06             .03
         June 30, 2009                  .04             .02
    September 30, 2009                  .04             .02
     December 31, 2009                  .11             .02
        March 31, 2010                  .09             .08
         June 30, 2010                  .08             .04
    September 30, 2010                  .08             .04
     December 31, 2010                  .05             .04

The Company currently estimates that there are approximately 1,000
holders of record of its common stock. Given its continuing need to
retain any earnings to fund its future operations and desired growth, the
Company has not declared or paid, nor does it currently anticipate
declaring or paying for the foreseeable future, any dividends on the
Company's common stock.

The Company currently has no equity compensation plans, no written
purchase, savings, option, bonus, appreciation, profit sharing, thrift,
incentive, pension or similar plan or written compensation contracts.

Item 6.  Selected Financial Information.

We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.

Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations.

The following discussion includes certain forward-looking statements
within the meaning of the safe harbor protections of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. 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.

Our fiscal year ends on December 31. References to a fiscal year refer to
the calendar year in which such fiscal year ends.

OVERVIEW

The Company was organized in the State of New York on August 24, 1989.
Its objective is to provide scheduled air transportation from the U.S. to
Russia, and former Soviet Union countries.

Baltia is currently conducting the FAA Air Carrier Certification
process.  Upon completion of the Air Carrier Certification, Baltia
intends to commence scheduled non-stop service from its Base of
Operations at Terminal 4, JFK Int'l Airport in New York to Pulkovo II
Int'l Airport of St. Petersburg.

Baltia intends to provide full service, i.e. passenger, cargo and mail,
and will not be dependent upon one or a few major customers. Baltia has
two registered trademarks "BALTIA" and "VOYAGER CLASS" and five
trademarks subject to registration.

The accompanying consolidated financial statements have been prepared on
a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business.  The
Company has capital which  management believes is sufficient to start
revenue operations on the JFK-St. Petersburg route.  The Company's
operational success may be dependent upon its timely procuring
significant external debt and/or equity financing to fund its immediate
and nearer-term operations, and subsequently realizing operating cash
flows from ticket sales sufficient to sustain its longer-term operations
and growth initiatives.

PLAN OF OPERATION

We believe that we have sufficient capital to commence revenue flight
operations. During 2010 and into 2011 we continued to finance our
operations through the issuance of our common stock. Until revenue
operations begin, our monthly expenditures for administrative and
regulatory compliance can be controlled at about $100,000-$200,000. Based
on current reserves we believe we have sufficient capital to support our
development stage operations through the end of 2011.

In 2011 we plan to raise $3 to $5 million in additional financing in order
to support revenue flight operations. Based on our prior experience with
certification and current preparations management believes that the
launch budget, previously reviewed by the DOT, will be adequate to
complete certification and to commence flight service. Approximately
$1,500,000 is budgeted for certification tasks, and $500,000 for general
and administrative expenses. At the time flight service is inaugurated
the Company plans to have approximately 20 management and 45 staff
personnel.

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
operations.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the U.S. The
preparation of our financial statements requires us to make certain
estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Our estimates, judgments and assumptions are
continually re-evaluated based upon available information and experience.
Because of the use of estimates inherent in the financial reporting process,
actual results could differ from those estimates. Areas in which significant
judgment and estimates are used include, but are not limited to, valuation
of long-lived assets and deferred income taxes.

Valuation of Long-Lived Assets: We review the recoverability of our long-
lived assets, including buildings, equipment and 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.

We amortize the costs of other intangibles (excluding goodwill) over
their estimated useful lives unless such lives are deemed indefinite.
Amortizable intangible assets are tested for impairment based on
undiscounted cash flows and, if impaired, written down to fair value
based on either discounted cash flows or appraised values.  Intangible
assets with indefinite lives are tested for impairment, at least
annually, and written down to fair value as required.

The Company complies with FASB ASC Topic 718 "Compensation - Stock
Compensation," which establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods
or services.  It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair
value of the entity's equity instruments or that may be settled by the
issuance of those equity instruments. FASB ASC Topic 718 focuses primarily
on accounting for transactions in which an entity obtains employee
services in share-based payment transactions.  FASB ASC Topic 718 requires
an entity to measure the cost of employee services received in exchange
for an award of equity instruments based on the grant-date fair value of
the award (with limited exceptions).  That cost will be recognized over
the period during which an employee is required to provide service in
exchange for the award the requisite service period (usually the vesting
period).  No compensation costs are recognized for equity instruments for
which employees do not render the requisite service.  The grant-date fair
value of employee share options and similar instruments will be estimated
using option-pricing models adjusted for the unique characteristics of
those instruments (unless observable market prices for the same or similar
instruments are available).  If an equity award is modified after the
grant date, incremental compensation cost will be recognized in an amount
equal to the excess of the fair value of the modified award over the fair
value of the original award immediately before the modification.

Our primary type of share-based compensation consists of
stock options. We use the Black-Scholes option pricing model in
valuing options. The inputs for the valuation analysis of the
options include the market value of the Company's common stock, the
estimated volatility of the Company's common stock, the exercise
price of the warrants and the risk free interest rate.

                           Dividend      Expected     Expected
    Year Interest Rate      Yield        Volatility   Life in Years

    2010    4.4%             0.00%          200%        1
    2009    4.4%             0.00%          200%        5

Income taxes: The Company accounts for income taxes in accordance with
FASB ASC Topic 740 "Income Taxes," which requires accounting for deferred
income taxes under the asset and liability method.  Deferred income tax
asset and liabilities are computed for difference between the financial
statement and tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on the enacted tax laws
and rates applicable to the periods in which the differences are expected
to affect taxable income.  Valuation allowances are established, when
necessary, to reduce the deferred income tax assets to the amount expected
to be realized.

The determination of the Company's provision for income taxes requires
significant judgment, the use of estimates, and the interpretation and
application of complex tax laws.  Significant judgment is required in
assessing the timing and amounts of deductible and taxable items and the
probability of sustaining uncertain tax positions.  The benefits of
uncertain tax positions are recorded in the Company's financial statements
only after determining a more-likely-than-not probability that the
uncertain tax positions will withstand challenge, if any, from tax
authorities.  When facts and circumstances change, the Company reassesses
these probabilities and records any changes in the financial statements as
appropriate.

In accordance with GAAP, the Company is required to determine whether a
tax position of the Company is more likely than not to be sustained upon
examination by the applicable taxing authority, including resolution of
any related appeals or litigation processes, based on the technical merits
of the position.  The tax benefit to be recognized is measured as the
largest amount of benefit that is greater than fifty percent likely of
being realized upon ultimate settlement.  De-recognition of a tax benefit
previously recognized could result in the Company recording a tax
liability that would reduce stockholders equity.  This policy also
provides guidance on thresholds, measurement, de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition that is intended to provide better financial
statement comparability among different entities.  Management's
conclusions regarding this policy may be subject to review and adjustment
at a later date based on factors including, but not limited to, on-going
analyses of and changes to tax laws, regulations and interpretations
thereof. Generally, the tax filings are no longer subject to income tax
examinations by major taxing authorities for years before 2007. Any
potential examinations may include questioning the timing and amount of
deductions, the nexus of income among various tax jurisdictions and
compliance with U.S. federal, state and local tax laws.  The Company's
management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.

RESULTS OF OPERATIONS

We had no revenues during the fiscal years ended December 31, 2010
and 2009, because (1) we did not fly aircraft in passenger, charter, or
freight service, and (2) we could not sell tickets for those services.

Our general and administrative expenses increased by $7,157,362 to
$18,560,838 during fiscal year ended December 31, 2010 as compared
to an increase of $7,867,324 during the fiscal year ended December
31,2009. This increase is primarily attributable to the costs incurred in
connection with air carrier certification.

Primarily as a result of the foregoing, we incurred a net loss of
$19,394,527 during the fiscal year ended December 31, 2010 as
compared to a net loss of $12,172,463 during the fiscal year ended
December 31, 2009.

Our future ability to achieve profitability in any given future
fiscal period remains highly contingent upon us beginning flight
operations. Our ability to realize revenue from flight operations in
any given future fiscal period remains highly contingent upon us
obtaining significant equity infusions and/or long-term debt
financing sufficient to fund initial operations. Even if we were to
be successful in procuring such funding, there can be no assurance
that we will be successful in commencing revenue operations or, if
commenced, that such operations would be profitable.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have incurred substantial operating and net
losses, as well as negative operating cash flows. As of December 31,
2010, we had cash of $52,840, a decrease of $1,387,057 from the cash
balance of $1,439,897 reported at December 31,2010. Our stockholders'
equity was $2,286,953 at December 31, 2010, an increase of $287,753 from
the balance of $1,999,200 reported at December 31, 2009.

Our operating activities utilized $4,408,364 in cash during the
fiscal year ended December 31, 2010, an increase of $2,027,215 from
the $2,381,149 in cash utilized during the fiscal year ended
December 31, 2009.

Our financing activities provided $5,527,454 and $3,701,900 in cash
during the fiscal year ended December 31, 2010 and 2009, respectively.

In the last quarter of 2010, Eastern Construction & Electric, Inc., a
company operated by our Director Vick Luis Bolanos, lent us $1,150,000 to
pay for the second B747 aircraft purchase to Kalitta Air.  The loan is
repayable in two years, once we have earned $4.0 million in operating
profit or received the same amount from investment in the open market.

We had no significant planned capital expenditures, budgeted or
otherwise, as of December 31, 2010, except for an investment of
approximately $350,000 in our aircraft avionics upgrades and
approximately $800,000 in the aircraft's scheduled maintenance
this year.

Off-Balance Sheet Arrangements: We do not have any off-balance
sheet arrangements which have, or are reasonably likely to have,
an effect on our financial condition, financial statements,
revenues or expenses.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.

Item 8.  Financial Statement Supplementary Data.

None.

Item 9.  Changes in and Disagreements with Accountants on Accounting
           And Financial Disclosures

We have changed our accountants because our previously engaged registered
accountant had been determined not to be independent within the
terms of the applicable regulations. The financial statements herein have
now been audited by our independent registered accountant and his report
included in this amended filing. The Company has had no disagreements
with either the past or present registered accounting firms.

Item 9A(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.  As of the end of the
period covered by this report, we conducted an evaluation under the
supervision and with the participation of our chief executive officer and
chief financial officer of our disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based
upon this evaluation, our chief executive officer and chief financial
officer concluded that our disclosure controls and procedures are
effective to ensure 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.

Management's Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act). Our internal control over financial reporting is
a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes of accounting principles generally
accepted in the United States.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance
of achieving their control objectives.

Our management evaluated the effectiveness of our internal control over
financial reporting as of December 31, 2010. In making this assessment,
our management used the COSO framework, an integrated framework for the
evaluation of internal controls issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our
management concluded that, as of December 31, 2010, our internal control
over financial reporting was effective.

This annual report does not include an attestation report of our
registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation
by our registered public accounting firm pursuant to temporary rules of
the SEC that permit the company to provide only management's report in
this annual report.

Changes in Internal Control Over Financial Reporting.   There was no
change in our internal controls or in other factors that could affect
these controls during our last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal
control over financial reporting. While existing controls may be adequate
at present, upon the commencement of flight revenue service we intend to
implement controls appropriate for airline operations.

Item 9B.  Other Information.

None.

PART III

Item 10.  Directors and Executive Officers of the Registrant.

The following table summarizes certain information with respect
to the executive officers and directors of the board :

Name                     Age   Position

Igor Dmitrowsky . . . .  56    President, CEO, CFO, Chairman of the Board
Russell Thal . . . . .   76    Executive Vice President
Barry Clare . . . . . .  52    Vice President Finance
Walter Kaplinsky  . . .  73    Secretary, Director
Andris Rukmanis . . . .  49    Vice President Europe, Director
Vick Luis Bolanos ...    51    Director

Our directors serve until the next annual meeting and until their
successors are elected and qualified. Our officers are appointed to serve
for one year until the meeting of the board of directors following the
annual meeting of stockholders and until their successors have been
elected and qualified. There are no family relationships between any of
our directors or officers.

Igor Dmitrowsky, President, Chief Executive Officer and CFO, 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.

Russell Thal, a US citizen, is the Company's Executive Vice President.
Mr. Thal joined the Company in 2000. From 1981 to 2000 he was Chairman of
Compuflight, Inc., an airline flight planning firm. From 1980 to 1981 he
was Director of Stations for New York Air.

Barry Clare, a US citizen, is the Company's Vice President of Finance.
Mr. Clare joined the Company in 2006.   Mr. Clare has been instrumental
in helping finance the Company From 2001 to 2004 has was Chief Operating
Officer for Advance Plant Pharmaceuticals, Inc.  From 1995 to 1997 Mr.
Clare served as vice president of Intermediaries, Inc., an investment
banking firm.

Walter Kaplinsky, a US citizen, has been with the Company since 1990.
Mr. Kaplinsky has been corporate secretary 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.

Vick Luis Bolanos, a US citizen, joined the Company's Board as a Director
in 2009. Mr. Bolanos is President of Eastern Construction & Electric,
Inc., since 1992.

Item 11.  Executive Compensation.

No cash compensation has been paid to our executive officers during the
fiscal years ended December 31, 2009 and 2010.

During the fiscal year ended December 31, 2010, 100,000,000 options were
granted to Igor Dmitrowsky.

During the fiscal year ended December 31, 2010, 80,000,000 common stock
options were exercised by Igor Dmitrowsky.

EMPLOYMENT AGREEMENTS

The Company has no individual employment agreements with any of its
executive officers or employees.

Future Compensation of Executive Officers

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 expected to be:(i) President $198,000, Executive Vice President
$130,000, Vice President Finance $120,000, (ii) Vice President Marketing
$110,000,and (iii) Vice President Europe $90,000.  Board directors are
not presently compensated and shall receive no compensation prior to
commencement of revenue service.

Item 12.  Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters.

As of April 7, 2011, there were 1,150,636,026 shares of common stock, par
value $0.0001 outstanding.  The following table sets forth, as of
December 31, 2010, 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.

<TABLE>
<CAPTION>
                               Common Shares
                            Beneficially Owned    Percent of Total
Outstanding
 Directors and Officers

<S>                             <C>                 <C>
Igor Dmitrowsky . . . . . .       339,422,825             40.39
63-26 Saunders St., Suite 7I
Rego Park, NY 11374

Russell Thal . . . . . . . .       11,150,000              1.32
26 Ridge Drive
Port Washington, NY 11050

Barry Clare . . . . . . . .        71,200,000              8.47
16 Birchwood Park Court
Jericho, NY 11753

Vick Luis Bolanos ......           72,000,000              8.57
633 Monroe St.
Riverside, NJ 08075

Walter Kaplinsky  . . . . .         9,717,294              1.15
2000 Quentin Rd.
Brooklyn, NY 11229

Andris Rukmanis . . . . . .         4,768,750              0.56
Kundzinsala, 8 Linija 9.
Riga, Latvia LV-1005

Shares of all directors and       508,258,869             60.49
executive officers as a
group (5 persons)
</TABLE>

Item 13.  Certain Relationships and Related Transactions.

None.

Item 14.  Principal Accountant Fees and Services.

In 2010, 2009 and 2008 the Company paid its independent accountant $7,000
for services in providing an audit of the previous year. All other
Company accounting and tax preparations have been done in house.

PART IV.

Item 15.  Exhibits and Financial Statements.

3.1 Certificate of Incorporation of Baltia Air Lines, Inc. (incorporated
by reference to Exhibit 3.1 to Form 10-KSB filed on May 19, 2005)

3.2 Bylaws of Baltia Air Lines, Inc. (incorporated by reference to
Exhibit 3.2 to Form S-8 filed on December 19, 2001).


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.

APPENDIX A.

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

                 FINANCIAL STATEMENTS
      For the Years Ended December 31, 2010 and 2009


                    Table of Contents


                                                           Page(s)


Report of Independent Registered Accounting firm              F-1

Balance Sheets as of December 31, 2010 and 2009               F-2

Statements of Operations for the years ended
December 31, 2010 and 2009, and the period August 29,
1989 (inception) to December 31, 2010                         F-3

Statements of Cash Flows for the years ended
December 31, 2010 and 2009, and the period August
29, 1989 (inception) to December 31, 2010                     F-4

Statement of Stockholders' Equity for the years
ended December 31, 2010, 2009, 2008, and 2007                 F-5

Notes to Financial Statements                         F-6 to F-26

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Years Ended December 31, 2010 and 2009

Board of Directors and Shareholders
Baltia Air Lines, Inc.
New York, NY

I have audited the accompanying balance sheets of Baltia Air Lines, Inc.
("the Company") as of December 31, 2010 and 2009 and the statements of
operations, stockholders' equity, and cash flows for the years 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.

I conducted my audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States).  Those standards
require that I plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatements.
I was not engaged to perform an audit of its internal control over
financial reporting.  My audits included consideration of internal control
over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal
control over financial reporting.  Accordingly, I express no such opinion.

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 audits provide a reasonable
basis for my opinion.

In my opinion, these financial statements present fairly, in all
material respects, the financial position of Baltia Air Lines, Inc. as
of December 31, 2010 and 2009 and the results of its operations and its
cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States.

The Company has incurred operating losses since inception.  Note 7 of
the financial statements address Management's Plan regarding the future
operations of the Company.

/s/ Patrick Rodgers, CPA, PA
Patrick Rodgers, CPA, PA
Altamonte Springs, Florida
May 9, 2011




F-1
<PAGE>
<TABLE>
<CAPTION>
                 Baltia Air Lines, Inc.
              (A Development Stage Company)
                    BALANCE SHEETS



                                               12/31/2010     12/31/2009
           Assets
<S>                                         <C>            <C>
Current Assets
Cash                                         $     52,840    $ 1,439,897
Prepaid Expenses                                   50,160              0
  Total Current Assets                            103,000      1,439,897

Property & Equipment:
Equipment                                       3,011,308        745,161
Accumulated Depreciation                          (92,782)       (85,858)
  Net Property & Equipment                      2,918,526        659,303

Other Assets:
Security deposit on airplane engines              240,000              0

Total Assets                                 $  3,261,526    $ 2,099,200

Liabilities & Equity

Current Liabilities:
Accounts Payable                                $ 100,000    $   100,000
Accrued Expenses                                    8,625              0
Current portion of long-term debt                       0              0
  Total current liabilities                       108,625        100,000

Long-term debt                                    865,948              0

Equity:
Preferred stock - 2,000,000
  authorized $0.01 par value
  66,500 issued & outstanding                         665           665

Common Stock   1,500,000,000
  authorized $0.0001 par value
  1,118,814,994 issued & outstanding
  (743,580,039 in 2008)                           111,881        74,358

Additional paid in capital                     51,747,347    32,102,590

Deficit Accumulated During
  Development Stage                           (49,572,940)  (30,178,413)

Total Equity                                 $  2,286,953   $ 1,999,200

Total Liabilities & Equity                   $  3,261,526   $ 2,099,200

</TABLE>
The accompanying footnotes are an integral part of these financial statements.




F-2



<PAGE>
<TABLE>
<CAPTION>
                   Baltia Air Lines, Inc.
              (A Development Stage Company)
                STATEMENTS OF OPERATIONS

                                                   Years Ended            Inception to
                                            12/31/2010     12/31/2009       12/31/2010
<S>                                     <C>               <C>              <C>
Revenue                                  $            0    $          0     $          0

Costs & Expenses
 General & administrative                    18,560,838      11,403,476       45,324,992
 FAA certification costs                        804,418         756,386        2,033,296
 Training                                             0               0          225,637
 Depreciation                                     6,924          13,072          339,603
 Other                                                0               0          568,245
 Interest                                        19,504            (471)       1,069,725
   Total Costs & Expenses                    19,391,684      12,172,463       49,561,498

Net Loss before income taxes                (19,391,684)    (12,172,463)     (49,561,498)

Provision for Income Taxes                        2,843           3,087           11,442

Deficit Accumulated During
        Development Stage                 $ (19,394,527)   $(12,175,550)    $(49,572,940)

Net loss per weighted share,
  basic and fully diluted                        ($0.02)         ($0.03)

 Weighted average number of common
  shares outstanding,
  basic and fully diluted                   913,981,784     476,403,471

</TABLE>
The accompanying footnotes are an integral part of these financial statements.


F-3
<PAGE>
<TABLE>
<CAPTION>

                    Baltia Air Lines, Inc.
                (A Development Stage Company)
                 STATEMENTS OF CASH FLOWS

                                                         Years Ended  December 31      Inception to
                                                             2010          2009        Dec 31, 2010
<S>                                                     <C>            <C>            <C>
Cash flows from operating activities:
Deficit Accumulated During Development Stage            $(19,394,527) $(12,175,550)   $(49,572,941)
Adjustments required to reconcile deficit accumulated
  during development stage to cash used in operating
  activities:
Depreciation                                                   6,924        11,923         338,454
Amortization of loan discount                                 10,925             0          10,925
Expenses paid by issuance of common stock                 15,009,850     9,697,478      32,024,266
(Increase) decrease in prepaid expenses                      (50,160)            0         350,141
Increase in accounts payable & accrued expenses                8,625        85,000       3,260,106
   Cash flows used by operating activities:               (4,408,364)   (2,381,149)    (13,589,050)

Cash flows from investing activities:
Purchase of equipment                                     (2,266,147)     (605,094)      3,194,366)
Security deposits                                           (240,000)            0        (240,000)
   Cash used in investing activities                      (2,506,147)     (605,094)     (3,434,366)

Cash flows from financing activities:
Proceeds from issuance of common stock                     4,377,454     3,701,900      15,481,737
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)
Proceeds of long-term debt                                 1,150,000             0       1,109,183
Acquisition of treasury stock                                      0             0        (500,100)
 Cash generated by financing activities                    5,527,454     3,701,900      17,076,256

Change in cash                                            (1,387,057)      715,657          52,840
Cash-beginning of period                                   1,439,897       724,240               0

Cash-end of period                                       $    52,840   $ 1,439,897    $     52,840

Supplemental cash flow disclosures:
 Cash paid during year of interest                       $    19,504   $      (417)

 Fair value of equity instruments issued as partial
  payment for the acquisition of a Boeing 747-200
  airplane.                                              $         0   $    25,000

 Fair Value ofequity instruments issues as loan
  incentives                                             $   294,297   $         0

</TABLE>


The accompanying footnotes are an integral part of these financial statements.

F-4

<PAGE>
<TABLE>
<CAPTION>

             Baltia Air Lines, Inc.
         (A Development Stage Company)
     STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


                                                                                         Deficit
                                                                                        Accumulated
                                                                         Additional      During
                                 Preferred Stock        Common Stock        Paid-In     Development
                                   Shares  Amount     Shares      Amount    Capital      Stage            Total
<S>                              <C>       <C>   <C>           <C>      <C>          <C>            <C>
Balance at December 31, 2006       66,500    665   122,394,909   12,240   10,486,192   (10,493,582)          5,515

Exercise of Warrants and Options                    58,000,000    5,800      239,700                       245,500
Shares issued and issuable for cash                 60,670,637    6,067    2,450,438                     2,456,505
Shares issued for services                          38,384,988    3,838    3,021,429                     3,025,267
Options issued for services                                                   35,768                        35,768
Net Loss                                                                                (3,760,743)     (3,760,743)

Balance at December 31, 2007       66,500    665   279,450,534   27,945   16,233,527   (14,254,326)      2,007,812

Exercise of Warrants and Options                    46,000,000    4,600                                      4,600
Shares issued and issuable for cash                    816,625       82       46,368                        46,450
Shares issued for services                          29,500,000    2,950      673,000                       675,950
Options issued for services                                                1,764,099                     1,764,099
Net Loss                                                                                (3,748,537)     (3,748,537)

Balance at December 31, 2008       66,500    665   355,767,159   35,577   18,716,994   (18,002,863)        750,374

Exercise of Warrants and Options                    32,000,000    3,200                                      3,200
Shares issued and issuable for cash                154,034,244   15,403    3,686,497                     3,701,900
Shares issued for services                         200,778,636   20,078    9,430,413                     9,450.491
Options issued for services                                                  243,787                       243,787
Stock issued to purchase airplane                    1,000,000      100       24,900                        25,000
Net Loss                                                                               (12,175,550)    (12,175,550)

Balance at December 31, 2009       66,500    665   743,580,039   74,358   32,102,591   (30,178,413)      1,999,200

Shares issued and issuable for cash                115,776,464   11,578    4,365,876                     4,377,454
Shares issued for services                         252,658,491   25,266   14,984,584                    15,009,850
Fair value of options issued as loan incentive                                92,745                        92,745
Stock issued as loan incentive                       6,800,000      680      201,552                       202,232
Net Loss                                                                               (19,394,572)    (19,394,572)

Balance at December 31, 2010       66,500    665 1,118,814,994  111,881   51,747,348   (49,572,940)      2,286,953

</TABLE>

The accompanying footnotes are an integral part of these financial statements.

F-5
<PAGE>

BALTIA AIR LINES, INC.
(A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


1.	Organization and Operation

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.

2.	Property and Equipment

A summary of property and equipment is as follows:


                  Estimated
                 Useful Life           2010              2009

Airplanes (2)    10-15 years          $2,851,347      $590,524
Office equipment
and other         5-7 years              159,961       154,637

Less accumulated depreciation            (92,782)      (85,858)
net                                    2,918,526       659,303

current depreciation expense              $6,924       $11,923




F-6


<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies

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 of obtaining route authority and
approval from the DOT and the FAA. We have not commenced our principal
revenue producing activities.

Use of Estimates

The preparation of financial statements inconformity with generally
accepted accounting principles requires our 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, we consider those short-term, highly liquid investments
with original maturities of three months or less to be cash or cash
equivalents.

Fair Value of Financial Instruments

The fair values of the Company's assets and liabilities that qualify as
financial instruments under FASB ASC Topic 825, "Financial Instruments,"
approximate their carrying amounts presented in the accompanying
consolidated statements of financial condition at December 31, 2010 and
2009.



F-7

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Valuation of Investments in Securities at Fair Value

Definition and Hierarchy: FASB ASC Topic 820 "Fair Value Measurements and
Disclosures" provides a framework for measuring fair value under generally
accepted accounting principles in the United States and requires expanded
disclosures regarding fair value measurements.  ASC 820 defines fair value
as the exchange price that would be received for an asset or paid to
transfer a liability (i.e., the "exit price") in an orderly transaction
between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches.
In accordance with GAAP, a fair value hierarchy for inputs is used in
measuring fair value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring that the most
observable inputs be used when available.  Observable inputs are those
that market participants would use in pricing the asset or liability based
on market data obtained from sources independent of the Company.
Unobservable inputs reflect the Company's assumptions about the inputs
market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances.  FASB ASC
Topic 820 establishes a three-tiered fair value hierarchy that prioritizes
inputs to valuation techniques used in fair value calculations, as
follows:

Level 1 - Valuations based on unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has the
ability to access.  Valuation adjustments and block discounts are not
applied to Level 1 securities.  Since valuations are based on quoted
prices that are readily and regularly available in an active market,
valuation of these securities does not entail a significant degree of
judgment.

Level 2 - Valuations based on quoted prices in markets that are not
active or for which all significant inputs are observable, either
directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and
significant to the overall fair value measurement.



F-8

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Valuation of Investments in Securities at Fair Value (continued)

The availability of valuation techniques and observable inputs can vary
from security to security and is affected by a wide variety of factors
including, the type of security, whether the security is new and not yet
established in the marketplace, and other characteristics particular to
the transaction.  To the extent that valuation is based on models or
inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment.  Those estimated
values do not necessarily represent the amounts that may be ultimately
realized due to the occurrence of future circumstances that cannot be
reasonably determined.

Because of the inherent uncertainty of valuation, those estimated values
may be materially higher or lower than the values that would have been
used had a ready market for the securities existed. Accordingly, the
degree of judgment exercised by the Company in determining fair value is
greatest for securities categorized in Level 3. In certain cases, the
inputs used to measure fair value may fall into different levels of the
fair value hierarchy. In such cases, for disclosure purposes, the level in
the fair value hierarchy within which the fair value measurement in its
entirety falls is determined based on the lowest level input that is
significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a
market participant rather than an entity-specific measure.  Therefore,
even when market assumptions are not readily available, the Company's own
assumptions are set to reflect those that market participants would use in
pricing the asset or liability at the measurement date.  The Company uses
prices and inputs that are current as of the measurement date, including
periods of market dislocation.  In periods of market dislocation, the
observability of prices and inputs may be reduced for many securities.
This condition could cause a security to be reclassified to a lower level
within the fair value hierarchy.




F-9

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Measurement of Fair Value

The Company measures fair value as an exit price using the
procedures described below for all assets and liabilities measured
at fair value. When available, the Company uses unadjusted quoted
market prices to measure fair value and classify such items within
Level 1. If quoted market prices are not available, fair value is
based upon internally developed models that use, where possible,
current market-based or independently-sourced market parameters such
as interest rates and currency rates. Items valued using internally
generated models are classified according to the lowest level input
or value driver that is significant to the valuation. Thus, an item
may be classified in Level 3 even though there may be inputs that
are readily observable. If quoted market prices are not available,
the valuation model used generally depends on the specific asset or
liability being valued. The determination of fair value considers
various factors including interest rate yield curves and time value
underlying the financial instruments.

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 5-7 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.

Valuation of Long-Lived Assets

We review the recoverability of our long-lived assets, in accordance with
Financial Accounting Standard Board ("FASB") Accounting Standards
Codification ("ASC") Topic 360 "Property, Plant, and Equipment," including
buildings, equipment and 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



F-10

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Valuation of Long-Lived Assets (continued)

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.

We amortize the costs of other intangibles (excluding goodwill) over
their estimated useful lives unless such lives are deemed
indefinite. Amortizable intangible assets are tested for impairment
based on undiscounted cash flows and, if impaired, written down to
fair value based on either discounted cash flows or appraised
values.  Intangible assets with indefinite lives are tested for
impairment, at least annually, and written down to fair value as
required.

Comprehensive Income

The Company complies with FASB ASC Topic 220, "Comprehensive Income,"
which establishes rules for the reporting and display of comprehensive
income (loss) and its components.  FASB ASC Topic 220 requires the
Company's change in the minimum pension liabilities, unrealized gain or
loss on securities, and foreign currency translation adjustments to be
included in other comprehensive loss, and is reflected as a separate
component of stockholders' equity.

Stock-Based Compensation Plans

The Company complies with FASB ASC Topic 718 "Compensation - Stock
Compensation," which establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods
or services.  It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair
value of the entity's equity instruments or that may be settled by the
issuance of those equity instruments. FASB ASC Topic 718 focuses primarily
on accounting for transactions in which an entity obtains employee services
in share-based payment transactions.  FASB ASC Topic 718 requires an entity
to measure the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award (with

F-11

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Stock-Based Compensation Plans (continued)

limited exceptions).  That cost will be recognized over the period during
which an employee is required to provide service in exchange for the award
the requisite service period (usually the vesting period).  No compensation
costs are recognized for equity instruments for which employees do not
render the requisite service.  The grant-date fair value of employee share
options and similar instruments will be estimated using option-pricing
models adjusted for the unique characteristics of those instruments (unless
observable market prices for the same or similar instruments are
available).  If an equity award is modified after the grant date,
incremental compensation cost will be recognized in an amount equal to the
excess of the fair value of the modified award over the fair value of the
original award immediately before the modification

We use the Black-Scholes option pricing model in valuing options. The
inputs for the valuation analysis of the options include the market value
of the Company's common stock, the estimated volatility of the Company's
common stock, the exercise price of the warrants and the risk free
interest rate.


  Year    Interest       Dividend    Expected      Expected
             Rate           Yield   Volatility  Life in Years
 2010         4.4            0.00      200           1

 2009         4.4            0.00      200           5



Accounting For Obligations And Instruments Potentially To Be Settled

In The Company's Own Stock, we account for obligations and
instruments potentially to be settled in the Company's stock in
accordance with FASB ASC Topic 815, "Derivatives and Hedging."
Topic 815 addresses the initial balance sheet classification and
measurement of contracts that are indexed to, and potentially settled in,
the Company's own stock.

Under ASC Topic 815 contracts are initially classified as equity or as
either assets or liabilities, in the following situations:



F-12

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)


Equity

Contracts that require physical settlement or net-share settlement; and
Contracts that give the company a choice of net-cash settlement or
settlement in its own shares (physical settlement or net-share
settlement), assuming that all the criteria for equity
classification has been met.

Assets or Liabilities

Contracts that require net-cash settlement (including a requirement
to net-cash settle the contract if an event occurs and if that event
is outside the control of the company); and Contracts that give the
counterparty a choice of net-cash settlement or settlement in shares
(physical settlement or net-share settlement).

All contracts are initially measured at fair value and subsequently
accounted for based on the current classification. Contracts
initially classified as equity do not recognize subsequent changes
in fair value as long as the contracts continue to be classified as
equity. For contracts classified as assets or liabilities, the
Company reports changes in fair value in earnings and discloses
these changes in the financial statements as long as the contracts
remain classified as assets or liabilities. If contracts classified
as assets or liabilities are ultimately settled in shares, any
previously reported gains or losses on those contracts continue to
be included in earnings. The classification of a contract is
reassessed at each balance sheet date.

In accordance with ASC Topic 815, "Derivatives and Hedging," a transaction
which includes a potential for net-cash settlement, including liquidated
damages, requires that derivative financial instruments, including
warrants and additional investment rights, initially be recorded at fair
value as an asset or liability and subsequent changes in fair value be
reflected in the statement of operations. The recorded
value of the liability for such derivatives can fluctuate
significantly based on fluctuations in the market value of the
underlying common stock of the issuer of the derivative instruments,
as well as in the volatility of the stock price during the term used
for observation and the remaining term.




F-13

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Assets or Liabilities (Continued)

Warrant Derivative Liabilities

We also account for warrants issued in connection with financing
arrangements in accordance with ASC Topic 815, "Derivatives and Hedging."
Pursuant to ASC Topic 815, an evaluation of specifically identified
conditions is made to determine whether the fair value of warrants issued
is required to be classified as a derivative liability. The fair value of
warrants classified as derivative liabilities is adjusted for changes in
fair value at each reporting period, and the corresponding non-cash gain
or loss is recorded in current period earnings.

Earnings per Common Share

Basic earnings 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 assume 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.

Income Taxes
The Company accounts for income taxes in accordance with FASB ASC Topic
740 "Income Taxes," which requires accounting for deferred income taxes
under the asset and liability method.  Deferred income tax asset and
liabilities are computed for difference between the financial statement and
tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on the enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income.  Valuation allowances are established, when necessary, to
reduce the deferred income tax assets to the amount expected to be
realized.

F-14

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Income Taxes (continued)

The determination of the Company's provision for income taxes requires
significant judgment, the use of estimates, and the interpretation and
application of complex tax laws.  Significant judgment is required in
assessing the timing and amounts of deductible and taxable items and the
probability of sustaining uncertain tax positions.  The benefits of
uncertain tax positions are recorded in the Company's financial statements
only after determining a more-likely-than-not probability that the
uncertain tax positions will withstand challenge, if any, from tax
authorities.  When facts and circumstances change, the Company reassesses
these probabilities and records any changes in the financial statements as
appropriate.

In accordance with GAAP, the Company is required to determine whether a
tax position of the Company is more likely than not to be sustained upon
examination by the applicable taxing authority, including resolution of
any related appeals or litigation processes, based on the technical merits
of the position.  The tax benefit to be recognized is measured as the
largest amount of benefit that is greater than fifty percent likely of
being realized upon ultimate settlement.  De-recognition of a tax benefit
previously recognized could result in the Company recording a tax
liability that would reduce stockholders equity.  This policy also
provides guidance on thresholds, measurement, de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition that is intended to provide better financial
statement comparability among different entities.  Management's
conclusions regarding this policy may be subject to review and adjustment
at a later date based on factors including, but not limited to, on-going
analyses of and changes to tax laws, regulations and interpretations
thereof. Generally, the tax filings are no longer subject to income tax
examinations by major taxing authorities for years before 2007. Any
potential examinations may include questioning the timing and amount of
deductions, the nexus of income among various tax jurisdictions and
compliance with U.S. federal, state and local tax laws.  The Company's
management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.

F-15

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Income Taxes (continued)

Interest and Penalty Recognition on Unrecognized Tax Benefits
The Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses. No
interest expense or penalties have been recognized as of and for the
periods ended December 31, 2010 and 2009.
Our federal and state income tax returns are open for fiscal years
ending on or after December 31, 2007. We are not under examination
by any jurisdiction for any tax year. At December 31, 2010 we had no
material unrecognized tax benefits and no adjustments to liabilities
or operations were required under FASB ASC Topic 740, "Income Taxes."

Recent Accounting Pronouncements

Recently Adopted Standards

On October 1, 2009, the Company adopted FASB ASC Topic 820-10 (ASC 820-
10), "Fair Value Measurements and Disclosures," for nonfinancial assets
and liabilities that are not recognized or disclosed at fair value in the
financial statements on a recurring basis. The adoption of ASC 820-10 did
not have a material impact on the Company's financial statements.
In August 2009, the FASB issued Accounting Standards Update 2009-05 (ASU
2009-05), "Fair Value Measurements and Disclosures (Topic 820) - Measuring
Liabilities at Fair Value," to amend FASB ASC Topic 820, "Fair Value
Measurements and Disclosures," to provide guidance on the measurement of
liabilities at fair value.  The guidance provides clarification that in
circumstances in which a quoted market price in an active market for an
identical liability is not available, an entity is required to measure fair
value using a valuation technique that uses the quoted price of an
identical liability when traded as an asset or, if unavailable, quoted
prices for similar liabilities or similar assets when traded as assets.  If
none of this information is available, an entity should use a valuation
technique in accordance with existing fair valuation principles.  The
Company adopted the guidance in 2009, and there was no material impact on
the Company's consolidated financial statements or related footnotes.
F-16

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Recently Adopted Standards (continued)

In June 2009, the FASB issued the FASB Accounting Standards Codification
(the "Codification") and a new Hierarchy of Generally Accepted Accounting
Principles which establishes only two levels of GAAP: authoritative and
nonauthoritative. The Codification is now the source of authoritative U.S.
GAAP recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP, except
for rules and interpretive releases of the SEC, which are additional
sources of authoritative GAAP for SEC registrants. All other
nongrandfathered, non-SEC accounting literature not included in the
Codification will become nonauthoritative. The Codification is effective
for financial statements for interim or annual reporting periods ending
after September 15, 2009. The Company adopted the new guidelines and
numbering system prescribed by the Codification when referring to GAAP in
the third quarter of 2009. The application of the Codification did not
have an impact on the Company's financial statements; however, all
references to authoritative accounting literature will now be references
in accordance with the Codification.

In May 2009, the FASB issued authoritative guidance for subsequent events,
now codified as FASB ASC Topic 855, "Subsequent Events," which establishes
general standards of accounting for and disclosures of events that occur
after the balance sheet date but before the financial statements are
issued or are available to be issued.  The guidance sets forth the
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements.  The guidance also requires the disclosure of the date through
which an entity has evaluated subsequent events and whether this date
represents the date the financial statements were issued or were available
to be issued.  The Company adopted this guidance in 2009 with no
significant impact on the Company's financial statements or related
footnotes.

In April 2009, the FASB provided additional guidance for estimating fair
value in accordance with FASB ASC Topic 820, "Fair Value Measurements and
Disclosures," when the volume and level of activity for the asset or
liability have significantly decreased.  This additional guidance re-
emphasizes that regardless of market conditions the fair value measurement
F-17

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009


3.	Summary of Significant Accounting Policies (continued)

Recently Adopted Standards (continued)

is an exit price concept and clarifies and includes additional factors to
consider in determining whether there has been a significant decrease in
market activity for an asset or liability. This guidance also provides
additional clarification on estimating fair value when the market activity
for an asset or liability has declined significantly.  The scope of this
guidance does not include assets and liabilities measured under quoted
prices in active markets.  This guidance is applied prospectively to all
fair value measurements where appropriate and will be effective for
interim and annual periods ending after June 15, 2009.  The adoption of
the provisions of this guidance did not have any material impact on the
Company's financial statements.

In April 2009, FASB issued FSP FAS 107-1 and APB 28-1, now codified in
FASB ASC Topic 825-10-65, "Interim Disclosures about Fair Value of
Financial Instruments," which amends U.S. GAAP to require entities to
disclose the fair value of financial instruments in all interim financial
statements.  The additional requirements of this guidance also require
disclosure of the method(s) and significant assumptions used to estimate
the fair value of those financial instruments.  Previously, these
disclosures were required only in annual financial statements.  The
additional requirements of this guidance are effective for interim
reporting periods ending after June 15, 2009.  The adoption of the
additional requirements did not have any financial impact on the Company's
financial statements.

In April, 2009, the FASB issued ASC Topic 320-10 (ASC 320-10),
"Recognition and Presentation of Other-Than-Temporary Impairments," which
provides additional guidance designed to create greater clarity and
consistency in accounting for and presenting impairment losses on
securities. ASC Topic 320-10 provides greater clarity to investors about
the credit and noncredit components of impaired debt securities that are
not expected to be sold. The measure of impairment in comprehensive income
remains fair value. This statement also requires more timely disclosures


F-18

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009


3.	Summary of Significant Accounting Policies (continued)

Recently Adopted Standards (continued)

and an increase in disclosures regarding expected cash flows, credit
losses, and an aging of securities with unrealized losses. We adopted
these statements April 1, 2009 without material effect on our  financial
statements.

On January 1, 2009, the Company adopted FASB ASC Topic 805 (ASC 805),
"Business Combinations," which generally requires an acquirer to recognize
the identifiable assets acquired, liabilities assumed, contingent purchase
consideration and any noncontrolling interest in the acquiree at fair
value on the date of acquisition. It also requires an acquirer to
recognize as expense most transaction and restructuring costs as incurred,
rather than include such items in the cost of the acquired entity. For the
Company, ASC 805 applies prospectively to business combinations for which
the acquisition date is on or after October 1, 2009. The adoption of ASC
805 did not have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

In December 2010, FASB issued ASC ASU 2010-28, "When to Perform Step 2 of
the Goodwill Impairment Test for Reporting Units with Zero or Negative
Carrying Amounts (Topic 350) - Intangibles - Goodwill and Other." ASU
2010-28 amends the criteria for performing Step 2 of the goodwill
impairment test for reporting units with zero or negative carrying amounts
and requires performing Step 2, if qualitative factors indicate that it is
more likely than not that goodwill impairment exists. The amendments to
this Update are effective for the Company in the first quarter of 2011.
Any impairment to be recorded upon adoption will be recognized as an
adjustment to our beginning retained earnings. The pending adoption of ASU
2010-28 is not expected to have any financial impact on the on our
financial statements.

In January 2010, the FASB issued Accounting Standards Update 2010-06,
"Fair Value Measurements and Disclosures (Topic 820) - Improving
Disclosures about Fair Value Measurements" (ASU 2010-06), to require new
disclosures related to transfers into and out of Levels 1 and 2 of the
fair value hierarchy and additional disclosure requirements related to

F-19

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


3.	Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

Level 3 measurements.  The guidance also clarifies existing fair value
measurement disclosures about the level of disaggregation and about inputs
and valuation techniques used to measure fair value.  The additional
disclosure requirements are effective for the first reporting period
beginning after December 15, 2009, except for the additional disclosure
requirements related to Level 3 measurements, which are effective for
fiscal years beginning after December 15, 2010.  The adoption of the
additional requirements is not expected to have any financial impact on
the Company's financial statements.

In February 2010, the FASB issued an amendment which requires that an SEC
filer, as defined, evaluate subsequent events through the date that the
financial statements are issued. The update also removed the requirement
for an SEC filer to disclose the date through which subsequent events have
been evaluated. The adoption of the additional requirements is not
expected to have any financial impact on the Company's financial
statements.

In December 2009, the FASB issued ASU No. 2009-17, Consolidations (Topic
810)-Improvements to Financial Reporting By Enterprises Involved with
Variable Interest Entities (ASU No. 2009-17). ASU No. 2009-17 requires a
qualitative approach for determining the primary beneficiary of a variable
interest entity and replaces the quantitative evaluation previously set
forth under FASB Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities . This approach is focused on
identifying the reporting entity that has the ability to direct the
activities of a variable interest entity that most significantly affects
the entity's economic performance and has the obligation to absorb the
entity's losses or has the right to receive benefits from the entity. ASU
No. 2009-17, among other things, will require enhanced disclosures about a
reporting entity's involvement in variable interest entities.  The
adoption of the additional requirements is not expected to have any
financial impact on the Company's financial statements.


F-20

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


4.	Stockholders' Equity

Description of Securities

Common Stock

We have been authorized 1,500,000,000 shares of Common Stock at $.0001 par
value per share. As of December 31, 2010, a total of 1,118,814,994 shares
of Common Stock were issued and outstanding and held by over 500
shareholders. In addition, we have granted options and warrants to issue
up to approximately 133,800,000 more shares of our common stock. Holders
of Common Stock are entitled to receive dividends, when and if declared by
the board of directors, subject to prior rights of holders of any
Preferred Stock then outstanding and to share ratably 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. 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.

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.

Recent Issuance of Unregistered Securities during the year ended December
31, 2010:

Stock Issued for Cash

We issued 115,776,464 shares of our common stock in exchange for
receiving a total of $4,377,454 in cash net of offering expenses of
$1,094,366. The shares are registered and not subject to restrictions as to
transferability.





F-21
<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


4.	Stockholders' Equity (Continued)


Stock Issued for Services

We issued 252,658,491 shares of our common stock in exchange for
services.  The shares were valued at $15,009,850 or about $0.059 per
share, which reflected the weighted average market value at the time of
issuance. 149,000,000 of the shares valued at approximately $8.8
million were issued to Igor Dmitrowsky our president. We also issued
6.8 million shares valued at $202,000 as a debt incentive.

Recent Issuance of Unregistered Securities during the year ended December
31, 2009:

Stock Issued for Cash

We issued 154,034,244 shares of our common stock in exchange for receiving
a total of $3,701,900 in cash net of offering expenses of $576,000. The
shares are not registered and subject to restrictions as to transferability.

Stock Issued for Services

We issued 200,738,636 shares of our common stock in exchange for services.
The shares were valued at $9,450,000 or about $0.047 per share, which
reflected the weighted average market value at the time of issuance.
116,000,000 of the shares valued at approximately $5.4 million were issued
to Igor Dmitrowsky our president. We also issued 1.0 million shares valued
at $25,000 as a component of the total consideration paid to acquire a
Boeing 747 airplane.  These shares are not registered and are subject to
restrictions as to transferability.

Stock Issued Due to Exercise of Warrants & Options during the year ended
and subject to restrictions as to transferability.

During 2009, Mr. Dmitrowsky exercised 32,000,000 warrants to acquire
a like amount of shares of Common Stock. The options were exercised
at the $0.0001 strike price. The exercise price was offset against
accrued compensation of $3,200.





F-22
<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


4.	Stockholders' Equity (continued)

Summary of Option Activity

The following table provides summary information on options issued
by our company in unapproved equity compensation plans; the warrants
exercised to date; the warrants that are presently exercisable and
the current exercise prices of such warrants.

All Plan & Non-Plan Compensatory Type Options
<TABLE>
<CAPTION>
                                                  Weighted
                                                   average
                                      Weighted    remaining
                                      average     contractual   Aggregate
                                      exercise       term       intrinsic
                         Shares       price      (years)         value<FN1>
<S>                      <C>            <C>       <C>       <C>


Options outstanding
 at December 31, 2008   61,492,500    $0.02

Granted                  2,776,818    $0.10
Exercised              (32,000,000)     Nil
Lapsed                  (3,290,000)   $0.00

Options outstanding
 at December 31, 2009   28,979,318    $0.03          2.7        $1,727,949
Granted                  3,400,000    $0.01
Exercised                        0    $0.00
Lapsed                           0    $0.00

Options outstanding
 at December 31, 2010   32,379,318    $0.03          1.6          $661,076
Options exercisable
 at December 31, 2010   32,379,318    $0.03          1.6          $661,076

<FN>
<FN1>
Amount by which the fair value of the stock at the balance sheet date
exceeds the exercise price
</FN>

</TABLE>





F-23

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009


4.	Stockholders' Equity (continued)


The following table summarizes the status of the Company's aggregate
warrants as of December 31, 2010:

<TABLE>
<CAPTION>

                 Options Outstanding                                 Options Exercisable
                                          Weighted
                               weighteD   average                          weighted
Range of                       average    remaining                        average
exercise                       exercise   life in                          exercise
prices            Shares       price       months         shares           price
<S>            <C>            <C>        <C>            <C>               <C>

$ 0.01-$ 0.05   29,149,318     $0.02       16.4            29,149,318         $0.02
$ 0.06-$ .25     3,230,000     $0.15       43.3             3,230,000         $0.15

Total Shares    32,379,318                                 32,379,318
</TABLE>




5.	 Income Taxes

The Company has approximately $ 11.6 million in available net
operating loss carryovers available to reduce future income taxes.
These carryovers expire at various dates through the year 2030. The
Company has adopted FASB ASC Topic 740, "Accounting for Income Taxes,"
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 these timing
differences will not materialize and have provided a valuation allowance
against our entire net deferred tax asset of approximately $4.6 million.

Utilization of federal and state NOL and tax credit carry-forwards
may be subject to a substantial annual limitation due to the
ownership change limitations provided by the Internal Revenue Code
of 1986, as amended, and similar state provisions. The annual
limitation may result in the expiration of NOL and tax credit
carry-forwards before full utilization.






F-24
<PAGE>

BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


6.	 Commitments and Contingencies

Facilities: The Company leases office space for its administrative
offices, under three month to month agreements, at a combined
monthly rental of approximately $32,000. In 2010 and 2009 expense was
$387,898 and 131,895, respectively.


7.	Long-Term Debt- Related Party

On December 1, 2010, the Company entered into a loan arrangement with a
company owned or controlled by one of our directors for a total amount
of $1,150,000. The Company issued a note bearing interest at 9 percent
per annum, payable quarterly and maturing on March 31, 2013. The Company
is obligated to repay the note prior to the maturity date upon raising $4
million or from the proceeds of operating revenue. As a loan inducement,
the Company issued 6.8 million shares of common stock and 3.4 million
warrants. A placement fee of $50,000 was paid from the proceeds of this
loan. The note is secured by both aircraft up to a limit of $2.9 million.

The Company recorded the relative fair value of the shares and warrants
in the amount of $294,297 as additional paid-in capital and established a
discount on the debt. The discount is being amortized over the life of the
note (27 months) at an effective rate of 14.98. The note is carried net of
the discount. Future accretion of the carrying value of the note is
expected as follows:

Face amount of note                              $1,150,000
Amortization of discount through 2011              (125,566)
Amortization of discount through 2012              (158,597)
Current carrying value                             $865,837


8.	Management's Plan of Operation

We believe we currently have sufficient capital to commence revenue
flight operations and to maintain our current level of operations.
During 2010 we continued to finance our operations through the issuance of
our common stock and the continued exercise of warrants. We will continue
into 2011 to finance our operations as we did in 2010. Until revenue
operations begin, our monthly expenditures for administrative and
regulatory compliance can be controlled at about $180,000-$200,000. Based on
current reserves we have sufficient capital to support our development stage
operations through the most of 2011.



F-25

<PAGE>
BALTIA AIR LINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010


8.	Management's Plan of Operation (continued)

In 2010 we raised $4.4 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.

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.

9.	Subsequent Events

The Company has analyzed its operations subsequent to December 31, 2009
through the date these financial statements were filed with the Securities
and Exchange Commission.

During the first quarter of 2011, the Company raised $1.5 million in
private placements, to support the start of revenue flight operations.













F-26

<PAGE>
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.

Date: May 11, 2011

/s/ Igor Dmitrowsky
By: Igor Dmitrowsky, President, CEO and CFO

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

     SIGNATURE                TITLE                      DATE

/s/ Igor Dmitrowsky    Chairman, CEO and CFO          May 11, 2011
Igor Dmitrowsky      (Principal Executive Officer
                      and Principal Accounting
                           Officer)

/s/ Walter Kaplinsky  Secretary and Director          May 11, 2011
Walter Kaplinsky

/s/ Andris Rukmanis   V.P. Europe and Director        May 11, 2011
Andris Rukmanis

/s/ Vick Luis Bolanos      Director                   May 11, 2011
Vick Luis Bolanos

Exhibit 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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

1. I have reviewed this annual report on Form 10-K 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 registrant 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)) and internal
controls over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f))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

(d) 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.

Date: May 11, 2011

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

EXHIBIT 32.1

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-K for the period ended December 31, 2010 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.

Date: May 11, 2011

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