An Airline Industry Disrupter With a Netflix Model
Six years ago, David Eyerly asked his brother, Wade, for a little advice. He had received a partial scholarship to Embry-Riddle Aeronautical University, but was conflicted about accepting it, despite his love of flying and airplanes. Wade Eyerly vividly recalls David's concerns of graduating with a ton of debt and the limited job market for pilots. Wade asked his brother what it would take to get him in the pilot’s seat. “I don’t know,” responded David. “Buy a plane? Start an airline?”
The idea resonated with Wade, who had travelled 27 days a month working as a press liaison for Vice President Dick Cheney from 2003 to 2005. “I could walk up to the vice president and give him a hug, but I could still be randomly chosen for a second screening at the airport,” he recalls. His brother needed to work as a pilot, and he longed for a less abusive form of air travel. The seeds for Surf Air were planted.
An Innovative Model
For the next several years, the two brothers carved out time at family holiday gatherings, sneaking out to a car to pour over folders filled with notes on their nascent idea (“the car was the only place we could be alone,” says Wade, the oldest in a family of eight). Ultimately, they hit on an idea that seemed promising: a subscription model where customers would pay a flat fee per month for an unlimited number of flights. At the end of 2011, they launched a placeholder website, explaining the concept and asking interested customers to submit their e-mail addresses. “Six weeks later, we checked it and 12,000 people had signed up telling us they were excited about what we were doing,” Wade says.
Last November, the brothers gathered 25 influential friends and spent a weekend brainstorming about the business. “Everyone in the room thought we were onto something,” recalls David. “So we made equity offers to six of those people and we all left our jobs in January and came out to Santa Monica to start the business.” The team decided that their first route should be between Los Angeles and San Francisco, capitalizing on what David calls “the emerging marriage between the entertainment/digital world of Los Angeles and the tech world of Silicon Valley. We think we can ride that trend on our demo route.”
They refined the business at a TechStars-affiliated startup accelerator in Los Angeles called MuckerLab, and started taking applications for the service. Subscribers pay a $1,000 per month “all you can fly” fee. While the company currently has 1800 applications for 500 spots, David says that Surf Air is not permitted to take credit cards until the company gets FAA approval, which he expects by early autumn. In the meantime, the company just raised $4 million in series A funding led by Anthem Venture Partners and NEA and will use those funds to buy or lease aircrafts.
David says that Surf Air’s planes will fly regularly scheduled flights between LA and San Francisco 16 hours a day and will hire 30 people for every two planes. Those planes will fly into “underutilized” regional airports. “There are 25 markets in the U.S. where this could work,” he says. “So we could be a $900 million company with $100 million in profit.”
That seems like an ambitious projection, but consider that the company already has hundreds of potential subscribers champing at the bit. Who are they exactly? They’re overwhelmingly male and fall into two categories: People who are over 45 and using the airline for business (such as venture capitalists visiting portfolio companies) and single men between 26 and 37 who have good incomes. “We think these are men trying to impress women," David says. “$1,000 a month is cheaper than a Range Rover Sport payment, and it’s more impressive to have access to a private plane service. It’s a goofy demographic that we didn’t expect.”
Photo credit: Surf Air