The lifting gas used in Lighter-than-Air systems is usually Helium or Hydrogen. Helium is a rare gas and hence very expensive and Hydrogen, though relatively less expensive and easily available, is highly inflammable. Hot air has been used as an LTA gas since the first flight of a balloon in the 18th century, but its utilization in tethered aerostat systems has been limited. The objective of this project is to examine the feasibility of using hot air as the LTA gas in a practical tethered aerostat system. In this study, the thermal analysis of hot air envelope was conducted to predict heat losses and power requirements. This was followed by an experimental study to validate the theoretical values obtained from the thermal model, in which an electrical heating system was inserted inside a spherical envelope made of rip-stop nylon with a fire-retardant coating. Heat loss predictions were extrapolated for a larger size working prototype and feasibility studies were performed. The experimental heat loss predictions were far higher than those obtained using the thermal model available in literature. The power requirement for the smallest possible spherical working prototype made of Polyurethane coated envelope, with a radius of 2.3 m was estimated to be more than 66 kW. However, for an envelope fabricated with a proprietary material named aerofabrix®, around 33% reduction in the power requirement was estimated. These results show a promise for a hot-air based tethered aerostat system, but with several design and operational challenges, which will be highlighted in the paper.