Standard Ground Handling Agreement SIMPLIFIED PROCEDURE Reg. No: JFK /LED B 1.2.

EXHBIT 10.5

SIMPLIFIED PROCEDURE

Reg. No: JFK /LED B 1.2.

ANNEX B 1.2. - Location(s), Agreed Services and Charges to the Standard Ground Handling Agreement (SGHA) of January 2004

Between:

Baltia Airlines, Inc.
Having its principal office at:
63-25 ▇▇▇▇▇▇▇▇ St., Ste 7i , ▇▇▇▇ ▇▇▇▇ , ▇▇ ▇▇▇▇▇ ▇▇▇
hereinafter referred to as "the Carrier "

and

ZAO "Cargo Terminal Pulkovo"
Having its principal office at:
▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Pulkovskoye shosse, 37, building 4,
hereinafter referred to as "the Handling Company"

Effective fro m : 01/06/2012
This ANNEX B 1.2.
For the location: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇

Is valid from 01/06/2012 till 31/05/2013
and replaces : all previous Agreements. Appendixes and Annexes

PREAMBLE:

This Annex B 1.2. has been prepared in accordance with the simplified procedure, whereby the Carrier and theHandling Company agree that the terms of the Main Agreement and Annex A of SGHA of January 2004 as published by the International Air Transport Association (IATA) shall apply as if such terms were repeated here in full. By signing this Annex B1.2. the Parties confirm that they are familiar with the aforementioned Main Agreement and Annex A.

PARAGRAPH 1 - HANDLING SERVICES AND CHARGES

1.1 The Handling Company shall provide the following services of Annex A at the following rates.

The rates are stated in USD and do not include VAT. VAT should be raised , ultimately, from the Carrier, according to Russian Federation Legislation.

1.2 No extra charges will be due over and above the charges as mentioned in sub-paragraphs 1.3 and 1.5, of this Annex B 1.2. for providing these services at night, on Public Holidays.

1.3 Cargo and mail Handling charges

1.3 .1 The rate for general cargo handling shall be - according to the following table No. 1, per kg.:

Table No. 1 (Rates for General Cargo)

Tonnage, Tons	1 ton	> 1 ton, 10 tons	>10 tons 20 tons	>20 tons, 40 tons	>40 tons, 60 tons	>60 tons, 80 tons	80 tons
Rate, USD per kg.	0,21	0,19	0,15	0,14	0,13	0,12	0,11

1.3.2 The rate for mail handling shall be - according to the following table No. 2, per kg .:

Table No. 2 (Rates for mail)

Tonnage, Tons	1 ton	>1 tons 30 tons	>30 tons, 50 tons	50 tons
Rate, USD per kg.	0,26	0,21	0,16	0,14

1.3.3 The rate for special cargo handling shall be according to the following table No.3, per kg .:

Table No. 3 (Rates for special cargo)

Tonnage, Tons	0,1 ton	> 0,1 ton, 1 tons	>1 tons 5 tons	>5 tons, 10 tons	10 tons
Rate, USD per kg.	0,24	0,20	0,18	0,16	0,14

1.3.4 The rate for handling of general cargo, mail, and special cargo is defined as follows, depending on kind of the cargo:

At the end of each month, weight of cargo, mail, and special cargo is summarized separately for this particular month.The rate for cargo, mail, and special cargo is applied corresponding the tonnage for this particular month.

The cargo that has arrived to the terminal according to the Air Waybills (AWB) by ground transport and then factually located on the warehouse determines by us as air cargo. So, the weight of the cargo that is delivered by airline on trucks according to AWB will be summarized with the total tonnage that was transported by the airline per month and will be rated according to the Table No.1 and Table No.3 of this Annex B 1.2. (depending on the cargo type whether it is general or special)

1.4 Charges for the cargo storage

General cargo is considered to be packed or piece cargo, which doesn't require special conditions and technology handling. 1..1 General cargo storage is free of charge within 3 (three) days. For outbound cargo (export) free storage period starts prior three days to the shipping date of cargo, as shown AWB. For inbound cargo (import) free storage period starts from the date of informing the cosignee about the cargo arrival.

Free storage is not applicable for cargo stored in refrigerating, isotope ▇▇▇▇▇▇▇▇ live animals, and any special cargo as well.

In case of part delivery of shipments each part of shipment is considered to be a separate one.

1.4.2. The Cosignee pays storage of inbound cargo (import) from the date of informing of Cosignee by the Handling Company until the date of receiving and shipping the cargo from the Handling Company's warehouse, in accordance with the opened published tariffs, including terms and periods of free storage. The Shipper pays storage of outbound cargo (export) from the date of accepting cargo by the Handling Company until the shipping date, as showed in the AWB, including terms and periods if free storage. Date shown on AWB must not be earlier that the date of acceptance of the documents by the export dispatcher of th Handling Company.

The Carrier pays the storage of outbound cargo (export) from the shipping date, as showed in AWB until the date of actual shipping, in case the cargo was not shipped in accordance with AWB shipping dates due to any reasons, except the failures of the Handling Company, according the tariffs, pointed below.

General cargo- USD 0.10 per kg per day.

Cargo, which is stored in the refrigerating chamber (from 1st day of placement) - USD 0.15 per kg per day

Dangerous cargo (from 1st day of placement) - USD 0.20 per kg per day

Cargo, which is stored in the isotope chamber (from 1st day of placement) - USD 15.00 per cargo piece).

Valuable cargo (from 1st day of placement)- USD 0.15 per kg per day.

1.5. Charges for Ramp Handling

1.5.1. For a single ground handling consisting of the arrival and the subsequent departure at agreed timings of the same aircraft, the Handling Company shall provide the following services at the following rates.

The rates are stated in USD and do not include VAT. VAT is raised ultimately from the Carrier, according to Russian Federation Legislation.

The rate for Ramp handling shall be charged per turnaround in accordance with the following table N 4 :

Table No.4:

Aircraft type	Rate, USD
B747	259

1.5.2. No charge for ramp handling is applied in case there is no mail and cargo on turnaround flight.

1.5.3. Handling in case of technical landing for other than commercial purposes will be charged at 50 % of the above rates, provided that a physical change of load is not involved.

1.6. AGREED SERVICES, THAT IS PERFORMED BY THE HANDLING COMPANY

Section 1. Representation, Administration and Supervision

1.1. General

1.1.3. Indicate that the Handling Company is acting as handling agent for the Carrier

1.2 Administrative Functions

1.2.4 Maintain the Carrier's manuals, circulars, etc. connected with the performance of the services

Section 3. Ramp services

3.6 Loading and unloading

3.6.3 (a) Provide equipment for loading and/or unloading

3.6.5 (a) Provide equipment for transport and assembly of (2)Cargo

3.6.6 (a) Unload aircraft, returning lashing materials to the Carrier
(b) Load and secure Loads in the aircraft

3.6.7 Redistribute Loads in aircraft (in accordance with Carrier's instructions)

3.6.10 (a) Provide safeguarding of all Loads requiring special handling
(e.g. valuables) during
(1) loading / unloading
(2) transport between aircraft and designated point on the airport

Section 4. Load control, communications and flight operations

4.1 Load control
4.1.2 (a) Prepare airway bills and cargo manifests where:
(2) Load Control is performed by the Carrier.

4.2 Communications

4.2.1 (a) Compile
(c) Perform EDI (electronic data interchange) transactions
(d) Inform the Carrier's representative of the contents of such messages

4.2.2 Maintain a message file containing all above mentioned messages pertaining to each flight for a minimum of 90 ninety days

Section 5. Cargo and Mail Services

5.1 Cargo and Mail Handling - General

5.1.1 (a) Provide warehouse handling and storage facilities for
(1) General Cargo
(2) Special Shipments
(3) Specialised Cargo Products
(c) Store Cargo
(d ) Take appropriate action to prevent theft of, or damage to cargo

5.1.2(a) Provide equipment for the handling of
(1) General Cargo
(2) Special Shipments
(3) Specialised Cargo Products

5.1.3 (a) Provide handling services for:
(1) General Cargo
(2) Special shipments
(3) Specialised Cargo Products
(5) Diplomatic Mail
(6) Diplomatic cargo

5.1.6 Take appropriate action to prevent theft or unauthorised use of, or damage to, the Carrier's pallets , containers, nets, straps, tie-down rings and other material in the custody of the Handling Company. Notify the Carrier immediately of any damage to or loss of such items.

5.2 Customs control

5.2.3 Place cargo under Customs control for:
a) Inbound cargo
b) Outbound cargo

5.3 Irregularities Handling

5.3.2 Report to the Carrier any irregularities discovered in cargo handling

5.3.3 Handle lost, found and damaged cargo

5.4 Document handling

5.4.1 (b) Check all documents to ensure shipment may be carried.The check shall not include the rates charged.
(c) Obtain capacity/booking information for the Carrier's flight.
(d) Split air waybill. Forward applicable copies of manifest and air waybills to the Carrier .
(e) Prepare cargo manifest(s ).
(f) Provide the load control unit with Special Load Notification.
(g) When applicable return copy of air waybill to shipper, endorsed with flight details.

5.4.2 (a) Notify consignee or agent of arrival of shipments
(b) Make available cargo documents to consignee or agent.

5.5 Physical Handling Outbound/Inbound

5.5.1 Accept cargo, ensuring that
b) manual labels are affixed and processed
c) shipments are "ready for carriage"
d) the weight and volume of the shipments are checked
e) the regulations for the carriage of special cargo, particularly the IATA Dangerous Goods Regulations (DGR), IATA Live Animals Regulations (LAR) , and others have been complied with.

5.5.2 Tally and assemble for dispatch cargo for the Carrier's flight

5.5.3 Prepare
(a) Bulk cargo
(b) ULDs
For delivery onto flights

5.5.4 Establish the weight of
(a) Bulk cargo
(b) built-up ULDs

and provide the load control unit with dead load weight

5.5.5 (a) Offload bulk cargo from aircraft
(b) Check incoming cargo against air waybills and manifests
(c) Break down ULDs

5.5.6 Release cargo to the consignee or agent

5.7 Post Office Mail

5.7.3 Deliver inbound mail to
(a) on airport postal facility together with Post Office mail documents, against receipt from postal authorities

5.7.4 Pick outgoing mail from Postal Facility
(a) on airport

5.7.8 Establish the weight of
(a) Bulk mail
(b) Built-up ULD's and provide the load control unit with dead load weights

Section 6. Support services

6.3 Unit Load Device (ULD) Control

6.3.1 (a) Provide storage space for ULDs
(2) cargo ULDs

6.3.2 Take action to prevent damage, theft or unauthorised use of the Carrier's ULDs in the custody of the Handling Company. Notify the Carrier immediately of any damage or loss.

6.3.3 (a) Take physical inventory of ULD stock and maintain records

(b) Compile and dispatch ULD control messages

6.3.4 Prepare ULD exchange control documentation for all transfers of ULDs and obtain signature(s) of the transferring and receiving carrier(s) or approved third parties and distribute copies of such kind of documents.

6.3.5 Handle lost, found and damaged ULDs and notify the Carrier of such irregularities

6.7 Surface Transport

6.7.1 (a) Provide the transport of

(3) cargo and/or mail

(4) empty ULDs between

PARAGRAPH 2 - ADDITIONAL SERVICES AND CHARGES

2.1. Charges for the ULD handling and storage

2.1.1 ULD's storage - USD 1.80 per unit per day.

2.1.2. Deliver empty ULDs between container area of luggage department of Airport Pulkovo and container area of Handling Company , and vice versa, shall be charged USD 5.00/ULD per unit.

2.2. Unclaimed Cargo

Cargo, which was not received and taken by the Consignee after the 2 month of storage from the Handling Company, counting from the moment of informing the consignee - is considered to be unclaimed cargo. The Handling Company informs the Carrier about unclaimed cargo in accordance with IRP telexes procedures.

The Carrier is obliged to clear storehouses of the Handling Company from the unclaimed cargo and to pay for full period of storage keeping, as well as other compensations, expenses, penalties non- delivery oriented.

The payment of cargo storage within 2 (two) months is counted according to the tariffs, mentioned in paragraph 1.4.2.After the expiry of 2 months the charge for undelivered import cargo storage is USD 0.80 per 1 kg per day (for all category of cargo ).

2.3 Charges for the Service Cargo

Cargo is considered to be a service one if it belongs to the ▇▇▇▇▇▇ r , is addressed to the Carrier or the representative of the Carrier.Among the service cargo are retail materials of airline, aircraft spares, special packing materials, catering items, blanks and forms, personal effects of airline stuff.

There is no charge for the storage of outbound (export) service cargo prior 3 days counting from the date of shipping, showed in AWB.There's no charge for the storage of inbound (import) service cargo during 3 (three) days, counting from the date of placement to the storehouses of the Handling company.

Storage of Carrier's outbound/inbound service cargo in USD 0.08 per kg starting from the 4th day.

2.4. All services not included in Paragraph 1 and mentioned above in Paragraph 2 of this Annex B 1.3. shall be charged to the Carrier by the Handling Company at rates which are acting at the moment when actual services had been provided by the Handling Company , with the prior consent of the Carrier.

PARAGRAPH 3- DISBURSEMENTS

Any disbursements made by the Handling Company on behalf of the Carrier shall be reimbursed by the Carrier at cost price plus an accounting surcharge of 10 (ten)%. The disbursements amount will be stated in the below monthly invoices.

PARAGRAPH 4- LIMIT OF LIABILITY

Notwithstanding Sub-Article 8.1. ( c) of the Main Agreement and in addition to Article 8.5 thereof, the Handling Company shall indemnify the Carrier against direct loss of or damage to the Carrier's cargo (excluding Mail) caused by the negligent act or omission by or on behalf of the Handling Company in the provision of the services and/or the supply of goods under this Annex B 1.2., PROVIDED ALWAYS THAT the Handling Company's liability shall be limited to 17 SDR per kilo or to the actual compensation paid out by the Carrier, whichever is less. In any event, the total amount of the claim shall not exceed USD 1,000,000, except that loss or damage in respect of any claim below USD500 shall not be indemnified. For the avoidance of doubt, the liability of the Handling Company shall never exceed the liability of the Carrier.

For the avoidance of doubt this Paragraph does not affect or prejudice the generality of the provisions of Sub-Article 8.1. of the Main Agreement

PARAGRAPH 5- SETTLEMENTS

Notwithstanding Sub-Article 7.2 of the Main Agreement, settlement of account shall be effected as follows:

5.1. Calculations for the provided services would be made in accordance with data, stated in the cargo documentation (AWB, cargo manifest, mail manifest)

5.2 The Handling company shall invoice the Carrier before the 10th day of the next month.

5.3 All invoices shall be expressed in USD and will be paid in USD or RUR in accordance with the Central Bank of Russian Federation exchange rate on the day of invoice issuing.

5.4. The payment term is 30 (thirty) calendar days from the date of invoice.

5.5 Bank commission rates and post office fees should be paid by the Carrier.

5.6 The handling tariffs set out in Paragraph 1, charges applicable under Paragraph 2 of this Annex B 1.2., as well as prices declared in price list do not include the valu added tax (VAT). VAT should be borne ultimately b the Carrier, according to RF legislation.

5.7. In case of overdue payments, the Handling Company has the right to impose a penalty at a rate of 0.1 {zero point one)% of the outstanding amount per each day of delay, or to suspend servicing of the Carrier. Payment by the Carrier of the penalty shall not decrease the amount of the Carrier's pecuniary obligation under the Agreement.

5.8 The Carrier shall remit the amount of the invoice to the Handling Company's account.

5.9 Payment can be made by Representation of the Carrier in St.Petersburg, authorized for such payments on behalf of the Carrier.

5.10 Party's Banking Details:

The Handling Company:

ZAO "Cargo Terminal Pulkovo"
Principal office address: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇/▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Mailing address: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
IDN 7810129213 KPP 781001001

Settlement account in Rubles:

Account: 40702 810 717 ODD 003 322
PC BANK "SAINT-PETERSBURG"
lnvestrbank subsidary
"OKTIABRSKIY "branch ▇▇▇▇. ace. 30101 810 900 000 000 790,
BIG 044 030 790
Currency settlement account in US Dollars:
SWIFT: ▇▇▇▇▇▇▇▇
PC BANK "SAINT-PETERSBURG"
lnvestrbank branch
"Oktiabrskoje"devision
Account N: 40702 840 817 000 203 332
E-mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇-▇▇▇▇▇.▇▇
Tel. ▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇

The Carrier

Baltia Airlines, Inc.

Principal office address: ▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇ ,
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ Mailing address: ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇,
▇▇▇▇▇ .

ABA routing ▇▇▇▇▇▇▇▇▇
phone:▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Settlement account in US
Dollars:
Account: 689700121
HSBC Bank ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ABA routing ▇▇▇▇▇▇▇▇▇

PARAGRAPH 6- NOTIFICATION

In accordance Sub-Article 11.3 of the Main Agreement, any notice or communication to be given hereunder shall be addressed to the respective parties as follows:

Handling Company

ZAO "Cargo Terminal ▇▇▇▇▇▇▇"
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇,
▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
tel.: ▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇, fax:+ ▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇
tel: + ▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇
e-mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇-▇▇▇▇▇.▇▇
e-mail: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇-▇▇▇▇▇.▇▇
SIT A: LEDFFXH

The Carrier
(Head office)
Baltia Airlines, Inc.
Principal office address: ▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇ ,
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Mailing address: ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇

ABA routing ▇▇▇▇▇▇▇▇▇
tel: 718-244- 8880, ▇-▇▇▇-▇▇▇-▇▇▇▇
fax: ▇-▇▇▇-▇▇▇-▇▇▇▇

PARAGRAPH 7- GOVERNING LAWS

The parties shall undertake all actions to attempt a settlement of the disputes and contradictions emerged across the agreement negotiating.
This agreement shall be governed by and interpreted in accordance with the laws of RF. Notwithstanding with Article 9 of Main Agreement arbitration shall be conducted in the Arbitration Court of Saint-Petersburg and Saint-Petersburg region.

PARAGRAPH 8- OTHER TERMS AND CONDITIONS

8.1 The parties shall undertake to inform each other in writing of any changes in their address or banking details within 10 (ten) days. Any changes or other communications to be transferred from one party to the other party shall be transferred in writing form.

8.2 Notwithstanding Article 11 of the Main Agreement the following will apply:
In case of considerable changes in handling procedures and/or information technology specifications, and if parties cannot agree on implementing or correcting such situation within 60 (sixty) days, parties are entitled to unilaterally cancel this Annex B 1.3. without prejudice to any other rights.

8.3 The Annex is made in Russian and English, with one original for each Party. In the event of any ambiguity, however, the English language shall prevail.

8.4 This Annex B 1.3. shall be effective from 01/06/2012 till 31/05/2013. In a part of settlements before fulfillment by the parties the obligation under the Annex B 1.2 It shall supersede any previous arrangements between the Parties governing the provision of services at locations for which is valid this Annex B 1.2.

8.5 Both Parties shall be exempt from their obligations if prompt notification is given by either Party in respect of any failure to perform its obligations under this Annexe B 1.3. arising from a force majeure event or any other cause beyond the reasonable control of either Party.

PARAGRAPH 9- CONFIDENTIALITY

9.1. Each Party hereto expressly agrees that all information, documents and/or data, commercial or otherwise, furnished by the other Party shall be kept confidential and be used solely for the performance of this Annex B 1.3. and shall not be disclosed to any third party without the other Party's prior written consent and that no reproduction of such information, documents and/or data shall be made except for 1) the internal use of the Party to whom such information, documents and/or data are furnished and 2) except for legal and tax purposes. In particular, the Handling Company agrees to ensure that all its staff respect the confidentiality of all security measures and received information, including that contained in the security training documents, which remain the property of the Carrier.

9.2 The Handling Company agrees to take all necessary action to ensure compliance with these obligations by its subcontractors, if applicable.

9.3 The confidentiality commitments defined in this Sub-paragraph shall remain in full force and effect throughout the term of this Annex B 1.3., and five (5) years after its termination or expiry.

PARAGRAPH 10- PARTIES ENDORSEMENT

Signed for and on behalf of
ZAO Cargo Terminal Pulkovo

/signed/
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /seal/
Director
Rybakova L.I.
Financial Director~ Chief Accountant

Signed on behalf of the Carrier
/signed/
Dmitrowsky, I.
Chief Executive Officer

Standard Ground Handling Agreement SIMPLIFIED PROCEDURE Reg. No: JFK /LED B 1.2.

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