Airlines' Archaic Business Model Is Teetering: Frequent Flyers Want Subscriptions
By Aarthi Rayapura • September 28, 2016
By John Greathouse
As noted in Success, Santa Barbara Style, my definition of success includes living where you want to live and making money doing what you love. For many entrepreneurs in California, including those in my hometown of Santa Barbara, achieving such success would be much more difficult if it weren't for the emergence of an innovative airline – Surf Air.
Surf Air flies to 12 locations within California, allowing members to fly as often as they like, paying a flat membership fee.
My Partner at Rincon Venture Partners, Jim Andelman, was an inaugural member of Surf Air and he repeatedly encouraged me to join. I hesitated because I wanted to travel less, not more, and I was concerned that if I signed up to an "all you can fly" program, I would feel compelled to travel more in order to justify the fixed cost.
What I quickly realized was that by eliminating the ticketing, boarding and TSA lines, I easily cut off hours on each trip. Thus, even though I now travel slightly more than I did previously, the time and hassles involved have diminished significantly.
Driven by my geeky desire to understand innovative business models, I reached out to Surf Air CEO, Jeff Potter, to learn more about his airline's atypical business model.
John Greathouse: Hello Jeff. Thanks for taking the time to chat. I'd like to start by hearing Surf Air's origin story. I realize you joined the company after it was up and running, but how did it get its start?
Jeff Potter: Thanks John. I appreciate you reaching out. Surf Air actually started as an approach aimed to offer an alternative to the traditional commercial model, which has deteriorated the airline travel experience. With the customer experience in mind, a new kind of subscription-based travel company was created in hopes of giving people – primarily business travelers – back time to do what matters to them most. The founders sought a solution for people who value their time and refuse to waste it in a maze of crowds, lines and delays – people who know the commercial flying model is broken.
Staking its claim in 2013, Surf Air became the first all-you-can-fly membership club. The founders selected California as their test ground, entering the market with deep aviation experiences and the same entrepreneurial spirit they expected of their Members. Equipped with a fool-proof business model, aimed at providing an egalitarian approach to travel, Surf Air is redefining the future of flying and living – when the opportunity came up, I was excited to get involved.
Greathouse: Very cool. With many valuable years of aviation industry experience, you seem like an ideal candidate to transition the venture from a Wild West startup to a more process-driven, disciplined company.
Potter: Looking back, I joined Surf Air at a time similar to when I joined Frontier. Back then, it was an incredibly small, one year-old company that ended up growing to reach about 80 destinations throughout the U.S. by the time of my departure.
What excited me about Surf Air was both the business and model – as well as the aviation component, naturally, but what set Surf Air apart for me, was its commitment to its Members. The motto "Other Airlines have passengers, we have Members," truly encapsulates the feel of this company.
With over 3,000 Members, Surf Air has cultivated this feeling of inclusion – which many Members have also noted to be a large part of the company's appeal. Surf Air's Members are engaged on a deeper level, not only with the brand but with each other. In fact, many business agreements have been made between Members in-flight. Likewise, several Surf Air Members have served as consultants to the brand, or have become employees.
This is the value which Surf Air has built its brand and foundation on, and what has me, and other Surf Air's executives (as well as investors) excited to continue to build out this rare, breakout startup and expand its footprint – as I helped Frontier expand theirs a time ago.
Read the full article at: www.forbes.com
Listen to Jeff Potter on the Subscribed Podcast and read this case study to understand how Zuora is helping Surf Air change the world of aviation!