October 11, 2011

By Electronic Submission

Larry Spirgel, Assistant Director

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, DC 20549

Re:

World Surveillance Group Inc.

Amendment No. 2 to Form S-1 Registration Statement

Filed September 22, 2011

File No. 333-175307

Mr. Spirgel:

This letter reflects our responses to the comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) as set forth in your letter dated September 27, 2011 to Mr. Glenn D. Estrella, our President and Chief Executive Officer (the “Comment Letter”). The Comment Letter relates to our Amendment No. 2 to Form S-1 Registration Statement filed with the Commission by World Surveillance Group Inc. (“WSGI” or the "Company") on September 22, 2011.

Please note that the Company’s Form S-1 has also been modified in the Amendment No. 3 to reflect the Company’s responses to the comments of the Staff on our Amendment No. 2 to Form 10-K for the fiscal year ended December 31, 2011 and Amendment No. 2 to Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011 where relevant and appropriate.

The responses and supplementary information set forth below have been organized in the same manner in which the Staff’s comments were organized.

World Surveillance Group Inc. and Subsidiaries

Consolidated Statements of Operations, page F-4

COMMENT 1: We note your response to comment seven from our letter dated September 8, 2011. Please apply our comment to your presentation of stock based compensation on the face of financial statements throughout your filing, including your Consolidated Statements of Operations for the years ended December 31, 2010 on page F-4.

State Road 405, Building M6-306A, Room 1400

Kennedy Space Center, FL 32815

RESPONSE 1: Please see the revised disclosure on pages F-4 and F-22 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect compensation and stock based compensation not as a separate line item but as included in the individual operating expense line items as appropriate.

Note 3

SkySat Sale, page F-11

COMMENT 2: We note your response to comment five from our letter dated September 8, 2011. The consideration having been received and used in 2010 does not mean that the revenue was earned. As noted in our prior comment, the development of SkySat was incomplete at the time of the transaction with GTC, therefore it appears that the $250,000 should have been allocated to deferred revenue. Please revise you financial statements and disclosure as appropriate or advise us.

RESPONSE 2: The Company respectfully believes that the $250,000 purchase price that it received from GTC pursuant to the agreement between the Company and GTC dated April 20, 2010 (the “Contract”) (which was filed as exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 27, 2010) was properly classified as revenue as opposed to deferred revenue. The Company received the $250,000 purchase price from GTC in 2010 and used the entire amount to continue the development of the SkySat airship by the end of fiscal 2010, as required by the terms of the Contract. The Company performed all of its obligations under the Contract and believes that all of the requirements under its revenue recognition policy were met, and thus that the $250,000 was properly deemed revenue. There was no obligation under the Contract to provide to GTC a fully viable, commercial airship – the obligation was merely to use the proceeds received under the Contract to further the airship’s development. The proceeds were both received and expended by the end of 2010 and the terms of the Contract were fully performed by the Company. The Company does not believe that it is required to allocate the $250,000 as deferred revenues or classify any amounts as restricted cash in the 2010 annual financial statements. The revised disclosure in the Company’s financial statements for the six months ended June 30, 2010 that was made in Amendment No. 2 to the Company’s Form S-1 reflected the fact that $100,000 of the $250,000 purchase price had not yet been received or earned pursuant to the terms of the Contract as of June 30, 2010 and should thus be reflected as deferred revenue. The Company respectfully believes no further modification to its disclosure or financial statements is required in connection with this matter.

Condensed Consolidated Balance Sheets, page F-21

COMMENT 3: We note your response to comment six from our letter dated September 8, 2011. Please tell us how GTC acquired or developed these assets and how they accounted for the related costs. Also tell us how you determined the fair value of these assets as of the acquisition date. Finally, in the revised accounting policy disclosure on pages 23 and F- 28 you mention a number of property and equipment categories; however you still do not provide a property and equipment footnote that breaks out your balance into these categories. Please revise your filing to provide a separate property and equipment footnote that includes a break out of your balance.

Further, in your discussion of GTC beginning on page 27, you mention “a large number of simplex or one-way transmission tracking accounts”. Please explain the nature of these accounts in further detail and tell us how you considered their value at the time of the acquisition.

RESPONSE 3: GTC purchased the appliqués (the “Applique Assets”) over a period of years in connection with certain contracts to provide tracking and messaging services to government and government-related customers. In order to provide such services, GTC purchased the Applique Assets and then installed them at various Globalstar ground stations throughout the world. While GTC is no longer providing messaging and tracking services to those government-related customers under the above referenced contracts, GTC continues to use the Applique Assets to provide such services to other customers. GTC originally expensed the Applique Assets as cost of goods sold. The Company purchased all of the outstanding capital stock of GTC on May 25, 2011, as a result of which GTC became a wholly owned subsidiary of the Company. Following the acquisition and in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 805, Business Combinations, and Fair Value Measurements and Disclosures (ASC Topic 820), the Company utilized observable Level 2 inputs to determine the fair value of the Applique Assets. The Company recognized the Applique Assets as tangible assets and recorded their fair value based upon quoted replacement value obtained from an independent vendor. The Applique Assets are used currently by GTC to provide messaging and tracking services creating revenue for GTC. The Company intends to expand these services to a larger commercial customer base in the future. The Applique Assets are being depreciated over their remaining useful life, which has been determined to be through 2025, based on the life of Globalstar’s satellite constellation. The Company respectfully believes no further modification to its disclosure or financial statements is required in connection with this matter.

Please see the revised disclosure on page F-31 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect a new property and equipment footnote.

Please see the revised disclosure on page 28 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect an expanded discussion of the tracking accounts.

At the time of the acquisition, the Company did not separately value these tracking accounts since it believed their value to be intricately tied to the Applique Assets. The Applique Assets allow the Company to use these tracking accounts to generate revenue and thus no separate value was ascribed to the accounts. Their value is being depreciated over the remaining useful life of the Applique Assets (through 2025). The Company respectfully believes no further modification to its disclosure or financial statements is required in connection with this matter.

Note 3. Acquisitions, page F-29

COMMENT 4: In your discussion in the last paragraph on page F-30, as well as in your discussion of GTC on page 28, you mention that the company is seeking certification in order to sell the simplex satellite tracking devices acquired in the GTC acquisition. Please expand your disclosure to discuss the nature of the certification you are seeking, who the certifying body is, and where you are in the process of applying for and obtaining the certification. Also explain the likelihood of obtaining the certification, whether the devices can be sold commercially without it, and how this was considered in your assessment of the fair value of the devices at the time of acquisition.

RESPONSE 4: Please see the revised disclosure on pages 28 and F-30 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect the expanded disclosure regarding the required certification.

Pro Forma Condensed Consolidated Balance Sheet, page F-63

COMMENT 5: Since the acquisition of GTC is reflected in your most recent historical balance sheet, the pro forma balance sheet should be removed from your filing.

RESPONSE 5: Please see the revised disclosure on pages F-63 and F-64 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect the removal of the pro forma balance sheet and related notes.

Pro Form Condensed Consolidated Statements of Operations, page F-65

COMMENT 6: Please revise your pro forma income statement to reflect GTC’s results of operations for the year ended December 31, 2010, as reported on page F-42.

RESPONSE 6: Please see the revised disclosure on page F-63 of our Amendment No. 3 to Registration Statement on Form S-1 to reflect GTC’s results of operations for the year ended December 31, 2010.

The Company hereby acknowledges that:

·	The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·	Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

·	The Company may not assert staff comments as a defense in any proceeding initiated by the commission or any person under the federal securities laws of the United States.

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Please do not hesitate to contact the undersigned at 321-452-3545 if you have any questions or comments with regard to these responses, need further supplemental information or would like to discuss any of the information covered in this letter. Thank you.

	Very truly yours,

	/s/ Barbara M. Johnson

	Barbara M. Johnson
	Vice President, General Counsel and
	Secretary