The Quick Descent of Surf Air

The prevailing theory among loyalty wonks these days is that the next generation of travelers cares less about loyalty and more about brand and personalization. But last week, that logic faltered.

Surf Air is a subscription-based airline that operates flights out of a handful of West Coast cities. The concept is great: Pay a monthly subscription fee and fly anywhere in the airline’s network as much as you want. But the concept also relies on reaching a critical mass of travelers and earning their business — which is to say, convincing wealthy travelers to defect from mainstream air carriers.

Last week, Surf Air got into hot water with a former flight operator that alleged that it owed the company $3.1 million. This follows news that the carrier recently switched partners and is now on its third company operating flights. A lawsuit has been filed in New York to help settle the debt.

There’s no direct correlation between the lawsuit and the company’s financial health, of course. But a $3.1 million lawsuit can’t help any startup’s bottom line.

It’s not unlikely, too, that Surf’s fare model was just ahead of its time. Sure, it could have to do with the fact that Surf Air’s subscription fees are $1,950 a month or that its network is only limited to California and a handful of other West Coast cities. But the fact remains: Traditional air carriers, routes, and loyalty programs exist the way they do for one big reason — they work.

— Grant Martin, Business of Loyalty Editor

Skift Stories and More Expert Insight

Amazon Wades Into Travel as Hotels Turn to Alexa in Rooms: With the help of Marriott International and a number of other partners, including both hotel brands and technology systems, Amazon is announcing Tuesday the debut of Alexa for Hospitality, a division of the company committed to placing Amazon’s smart home devices into hotel rooms, vacation rentals, and other hospitality settings.

Orlando Airport’s Facial Scanning Program Will Soon Cover All International Flights: Florida’s busiest airport is becoming the first in the nation to require a face scan of passengers on all arriving and departing international flights, including U.S. citizens, according to officials there.

American Airlines Isn’t Sure When It Will Fix Computer Issues at One of Its Regional Airlines: The technology issue arose on June 14 and has affected nearly 1,100 PSA flights to date, mainly in Charlotte, North Carolina.

Norwegian CEO Warms Up to Potential Sale: Norwegian Air Shuttle ASA CEO Bjorn Kjos said his company has attracted takeover interest from multiple potential bidders and remains open to a deal on the right terms.

JetBlue’s Founder Is Raising Cash for a New U.S. Airline, Report Says: David Neeleman, who started JetBlue Airways Corp. with $100 million in 2000, is raising money to launch a new low-cost carrier focused on secondary airports in the U.S., according to Airline Weekly.

Virgin Atlantic Names New CEO as Richard Branson Gives Up Control: Virgin Atlantic Airways Ltd. said commercial head Shai Weiss will take over as CEO as billionaire founder Richard Branson prepares to cede majority control of the UK carrier.

Starbucks to ‘Redesign’ Rewards Program in 2019: Starbucks has its eyes set on a new rewards program. In a statement, Starbucks detailed plans that it expects to continue to develop its Starbucks Rewards program, giving customers more choices for redemptions and payment.

New Gogo Study Shows In-Flight Connectivity Trumps Loyalty Miles and Seat Class: It’s no surprise that in-flight connectivity continues to rise in importance as a key amenity for airline passengers, but according to a new study from connectivity provider Gogo, Wi-Fi is now more important to passengers than frequent flyer miles earned or a preferred seat class.

SUBSCRIBE

Skift Business of Loyalty Editor Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. Skift emails the newsletter every Monday.

Subscribe to Skift’s Free Business of Loyalty Newsletter