This Startup Airline Lets You Fly Everyday / Any Day – For A Flat Fee

Jeff Potter Surf Air 9_16

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 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 and members can fly as often as they like, paying a flat membership fee. I initially 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 deteriorate 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.

Greathouse: I can vouch for that Jeff. I’ve established some meaningful relationships in my travels on Surf Air, a couple of which have led to deals for my portfolio companies.

I understand your son also worked for Surf Air and he was your roommate when you are in LA. What’s it like to work with one of your adult children? Anything surprising that you didn’t anticipate when you two joined forces?

Potter: Talk about Surf Air’s commitment to its Members! Yes, it was a great pleasure working with Casey, both personally and professionally. I enjoy spending time with him, but there was a clear separation of our work and personal relationship. There were times when certain elements are confidential, so those were never part of our conversations. At the same time, as a father, I was very proud to watch him and how serious and focused he was in approaching his craft. It is not easy for the “boss’ son” in any company, but he embraced that situation and knew his professionalism and experience would ultimately create his own identity – which he did.

Apart from these memories, I took that rare opportunity to absorb any and all unfiltered feedback Casey would share with me. We used this information to provide a better working environment and experience for our pilots, as we are continuing to grow and bring on more crew members. While I have very much enjoyed our time working together, I also know the importance of family and was more than supportive in his decision to accept a new opportunity in order to be closer to his fiancé in the Midwest.

Greathouse: That’s awesome, good for him. It’s so important for our children to forge their own paths.

I apologize, but I don’t invest in your space and thus I’m pretty ignorant as to your ecosystem. Are there other airlines outside of California that are deploying similar business models? If so, it seems there might eventually be consolidation – either a rollup or a series of acquisitions by a commercial carrier. As an insider, I’m curious to hear your thoughts regarding the industry’s evolution.

Potter: Surf Air is the first all-you-can-fly membership club operating a dedicated fleet of aircraft on scheduled routes – rather than chartering an entire jet or placing people in empty seats on existing private charters.

Since first pioneering this industry, the market for per-seat membership and scheduled charter continues to expand as consumption for this type of alternative travel is on the rise. It is this type of longevity and growth indication that has our staff, as well as investors, confident in not only Surf Air, but the industry as a whole. Surf Air knows frequent travelers want flexibility, convenience and better service, therefore we believe this model will continue to expand and develop along with these needs.

Greathouse: One of the appeals of Surf Air to me, beyond convenience, is the ability to take a guest on a free flight each quarter. My wife and I have visited Napa, Carmel and La Jolla for some wonderful weekend excursions. It makes traveling more palatable when the perks include such adventures. I hear Mammoth may be coming on line in the future. Do you have any other new, fun-oriented destinations in mind?

Potter: We are always looking to expand our efforts into new, and sometimes unchartered, territories. We spend a great deal of time analyzing our consumers and where their greatest needs are. This is why we recently announced our upcoming expansion into Europe. Beginning mid-October, Surf Air routes will include multiple flights between London Luton Airport, Cannes, Geneva and Zurich, on a daily basis with more to come.

Greathouse: Nice, how do I get some guest passes on Surf Air Europe? That would earn me a ton points with my wife. <laughs>

In addition to convenience, Surf Air has allowed me to establish a venture practice in cities outside of Santa Barbara. If I were to fly commercial, I would have to combat traffic, switch flights and pay an absorbent amount of money to fly into the smaller airports closer to these towns. While I have taken ground alternatives in the past, such as trains and cars, spotty wifi and lengthy commute times start to wear. With Surf Air, I have been able to reach my destination quickly and efficiently – and continue to maintain these projects.

Potter: That’s exactly right. As part of our network planning we look at city pairs that draw a large audience of frequent business travelers – areas with conditions that mirror the most successful routes in our California network, including those between the Bay Area, Santa Barbara, and LA Basin. We’ve seen a great deal of opportunity in Europe, where many travelers utilize the same short-haul flight routes frequently and could save valuable time with a unique alternative to commercial air travel – hence our recent service expansion.

Greathouse: There are obviously regulatory issues which make it more complicated for regional airlines to operate across state lines. However, it would be great for the startup world if there were flights between Silicon Valley and other non-Californian entrepreneurial regions, such as Bolder and Austin. Is this a possibility, or are the regulatory issues and/or geographic distances too challenging?

Potter: Though we know that the ideal range of our current fleet of Pilatus PC-12 aircraft includes flights of up to two hours in duration, we are ultimately open to traveling to destinations outside of California and are working to secure the interstate licensing to do so in the near future.

Greathouse: As you noted, relationships get established on Surf Air flights. Santa Barbara is such a contained community that on nearly every flight I know at least half my fellow travelers. You guys have organized several mixers, which is a nice way for members to further cultivate their networks.

Do you have future plans to further leverage the power of the Surf Air membership family? Maybe a retreat in which the members are flown to a central location and participate in a tech oriented conference? Event planning was never my forte, but it seems there are lots of opportunities to facilitate members getting to know each other better.

Potter: Absolutely. As I mentioned before, our Members are our most prized asset – we always want to go above and beyond for them. In addition to our regular mixers and events, we wanted to continue to find a way to redefine the conventional travel service experience as a part of our offerings.

In doing so, we decided to partner with event and lifestyle agency Total Management to afford Surf Air Members with a full and robust travel service offering additional support and benefits for travel needs outside of Surf Air’s already convenient travel routes.

With Surf Air’s recent European expansion in mind, we will be providing full access to Total Management’s Globetrotter Club. Via the Globetrotter Club Surf Air Members will be offered preferential rates and services across accommodation, worldwide events, and flight paths not currently included in the Surf Air network. In addition to the selection of services available, each Surf Air Member will receive a dedicated Globetrotter Account Manager who, having taken the time to understand their personal travel preferences, will offer the most tailored and suitable benefits available. And this is only the beginning. 

Greathouse: As a member, I like the sound of that. OK Jeff, before we wrap up, I want to ask about your referral program. When I headed up marketing for GoToMeeting, we tried a number of “tell a friend” schemes and none of them worked very well. Have you found that offering additional guest flights has proven an effective incentive? What percentage of your new users are driven by existing members’ referrals?

Potter: We began investing more time and effort into our referral process because we realized early on that a substantial percentage—sometimes nearing half—of our new Members were derived from word of mouth and positive referrals. By making the process easier for our Members to refer we’ve had great success in starting conversations with qualified new prospects and welcoming new, likeminded additions to our community.

Greathouse: Great. Thanks again for taking the time Jeff. Hopefully I’ll see you on a future flight.

Potter: Thanks John. Hopefully that next flight will be somewhere in Europe!

Follow John’s startup-oriented Twitter feed here: @johngreathouse.

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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