Surf Air: Subscription-Based Aviation

Surf Air’s launch in 2013 took the skies by storm. The all-you-can-fly membership airline has continued to lead the change in aviation and now has a waitlist for membership. We spoke with Mac Kern, Vice President of Commercial Planning at Surf Air about their unique subscription business model.

Why is the subscription business model pivotal to Surf Air?

From a business perspective, we all know that airlines have struggled for years. It’s a very capital intensive business, not to mention commodity-based. Prices get driven downward. It’s very competitive.

The subscription model gives us predictive revenue — that’s something that no commercial carriers have. They don’t know if a flight is going to be profitable until the door on the airplane closes (and they still have to fly at that point!).

Because of subscriptions, we know exactly how much revenue we’re going to generate at the beginning of every month. So we can scale our operation effectively, because we know exactly how much flying we’re able to execute.

That kind of insight is basically basically magic in the aviation industry. No one has been able to do that before. We’re taking the industry to the next level, and it’s really all due to subscriptions.

In your opinion, how are subscribers different from customers?

At Surf Air, we don’t have guests that ride and leave. We have members who we welcome as part of a community, and who feel like they have some ownership in our service. That sense of ownership definitely stems from the fact that they’re helping us get this started from the ground up!

But they also fly with us often, so they get to know the pilots. They get to know our concierges. They get to know one another, because they’re constantly on flights together, so the community element really comes naturally as part of membership. It’s a unique, high-touch experience.

How does the subscription model impact your customer service?

From the consumer perspective, a subscription model really allows us to get in touch with our members, and allows us to deliver an experience that’s far and above what we know other aviation competitors are able to offer. We have a very dedicated Member Care team and Concierge Team that are all focused on that member experience element.

Because our members use us on a recurring basis, we can give them really robust user profiles. They share details about their families, their jobs, and we can integrate that knowledge into their Surf Air experience. That’s all due to the power of subscriptions.

Mac Kern_ Surf Air (Client Picture; Requires Editor's Permission)

What do your customers say about your service?

We definitely get a lot of customer feedback. We know that our customers love the simplicity that Surf Air gives to their lives. The ability to book a flight in 30 seconds and not have to enter your credit card information or your birth date every single time, or worry about booking the wrong flight because your schedule changes and not being able to cancel it — all of those hassles are really just wiped off the map.

The members get in a cadence of understanding how their lifestyle integrates with us as a travel company, and they know that if anything goes wrong they have a dedicated Member Care manager or Concierge they can call. They’re also very connected to our headquarters. We love it when members come by and visit. We want them to feel like they have a true degree of ownership and a real relationship with the company. I think that’s what changes their travel experience more than anything else.


How does Surf Air measure success?

We look at lots of different metrics. We’re flying metal airplanes around all the time, so naturally we’re looking at important operational factors like timeliness, cancellations, etc.

We also pay very close attention to the member acquisition numbers. Are the products that we’re putting out there selling? What is the value of the new route or network we’ve developed? Is it receiving the kind of support that we predicted it would?

Then there’s member retention. Are members staying with us? Are we delivering on the promise that we originally gave them when they signed up? Are they remaining loyal to us?

I’m lucky to say at this point our churn rate is incredibly low, so that’s really helped us grow the business. We’re moving forward, as opposed to constantly treading water and to make up for lost members.

We also keep a pulse on our employees: are they excited about our plans? Do they feel empowered in their positions? We want to make sure that everyone has the same level of passion for Surf Air across the board. Ultimately, that’s going to lead to our overall success.

How do you measure customer success?

The main thing is to really make sure that we’re delivering on the experience that members are expecting. Because at the end of the day, Surf Air is a membership club. We truly want to develop a community that members are enthusiastic about and love being a part of whenever they fly with us. We have a lot of transparency with them, to make sure that we can collect information on things that are going very well, and things that aren’t going so well, so we can adjust and iterate accordingly.

What does Surf Air have planned for the future?

We are helping consumers fundamentally rethink aviation — not just in terms of one-time ticket sales, but how it can change their lives on a recurring basis. We truly believe that we’re creating a brand and a sector of aviation that will not only apply in California, but nationwide and then across the globe. The Surf Air brand will be something that you will see much more of in the next few years.

Keep Learning

The Ultimate Guide to Monthly Recurring Revenue (MRR)
What ASC 606 means for revenue recognition
Understanding material weakness in internal control for finance
SaaS pricing models: A comprehensive monetization guide