Ash, Brock and Misty prepare for their long journey to Valencia Island to bring back a mysterious Poké Ball for Professor Oak. After discovering that the trip will take a month to get there, Ash manages to win a free blimp ride so it will take only a day! Once on board, they realize the blimp is being powered by Team Rocket! And things only get worse from there!
As they prepare to depart for Valencia Island, Ash and his friends pick up supplies at a grocery store. Ash suggests walking to the island, but Brock's guidebook says that it will only take less than a day traveling by blimp. While the blimp arrives, two men sponsor a contest where the winner gets a prize just by showing their store receipt to them. Ash shows his receipt and wins a free trip on the blimp, leaving his friends dumbfounded. Meanwhile, Team Rocket receives an assignment from Giovanni to join the organization's Dirigible Brigade, and their duties include operating a blimp. Unbeknownst to them, it is a scheme to get rid of the trio, since Giovanni only maintained the blimp's insurance policy and not its integrity for decades.
Ash and the others reach the blimp yard and see a broken-down blimp. Two men approach them and warn that the blimp is haunted. Jessie and James, disguised as an air-hostess and pilot, respectively, push the engineers out of the way, and push the group on board. Jigglypuff appears and notices a lever that resembles a microphone. As it jumps to sing into it, it unexpectedly causes the ballast water to be released, and the blimp begins to soar into the sky. Jigglypuff finds its foot tangled in some rope and is also carried off.
Once on board, the group notices how deteriorated the blimp truly is. Meanwhile, Meowth fixes dinner while Jessie and James act as waiters. When Ash complains about the ride, Jessie and James find out from Meowth that no one is flying the blimp. The pair desperately tries to commandeer the blimp, but they fly it into a big storm. Suddenly, Misty notices that Togepi is missing. They set out to find it in the inflated portion of the blimp, where they encounter what they believe to be a ghost. However, it is actually revealed to be Jigglypuff covered in a white sheet.
Eventually, Ash and his friends meet up with Team Rocket and begin a Pokémon battle. At one point, Brock's Geodude throws James's Weezing through the blimp, causing it to rip apart. Misty finally spots Togepi on a high ledge, so Ash has Bulbasaur try to grab it with its vines. Team Rocket takes the opportunity and attempts to steal Pikachu, but their plan is thwarted when the blimp hits a pocket of turbulence, forcing them to fall out of the aircraft. Meowth makes a parachute from some of the blimp's fabric, but Jigglypuff lands on top of it and starts to sing. They fall asleep, and Meowth lets go of the fabric, causing the trio to fall into the ocean and drift away.
Ash and the others rush to take control the blimp and try to land it. Using their Pokémon as counterbalances, they are able to steer the blimp and crash-land it on Valencia Island. Now safely on land, they continue to Professor Ivy's lab to obtain the mysterious Poké Ball.
Pokémon senryū summary: Lickitung; a stretching and contracting, long tongue.
The English dub of this episode was renamed "Spirits in the Sky" after the September 11 attacks. However, this may have only been temporary, as Cartoon Network reruns keep the original English dub title. It also remains unchanged on the official Pokémon website, both on the title card in the episode and the title on the website.