Published in May 2015 issue
Hey, did you know this is a thing? Unlimited flights between select cities—pay one price to ride, just like at the amusement park.
By Mark L. Berry
Travel membership programs are the growth market in aviation.” This is the fundamental philosophy of Rise Aviation’s CEO, Nick Kennedy. Airways sat down with him to learn more about this new concept that is offering unlimited private flights between select cities in Texas, without the restrictions of commercial airline service. At first, I thought this was a fractional ownership model, but, no, this thing is something different.
Once, the air travel industry was solidly divided between economical, but hassle-laden, commercial airline service, and private (luxury) jet ownership. Then, around the beginning of our new millennium, fractional ownership made private air travel slightly more affordable; but owning a portion of a corporate aircraft still required a sizable, up-front capital investment. For example, even the minimum NetJets’ share plan buy-in is 1/16th of an aircraft, at $550,000, and this level of ownership limits travel to 50 hours of flying per year (at additional hourly charges based on aircraft type). Plus, the initial commitment is at least two years. At JetSuite, the minimum membership fee is $50,000 (with additional memberships up to $400,000), in order to lease their jets at $3,800 per hour. Now, at less than half the hourly rate of jet service, a new, unlimited, monthly turbo-prop niche is emerging. Travel memberships are the way to “fly corporate for the cost of flying commercially.”
I asked CEO Kennedy if his Rise service, using Beechcraft King Air 350i aircraft, hopes to attract premium frequent flyers away from the airlines. “No,” he told me. “On the routes that we plan to operate (beginning in February 2015), initially serving Dallas and Houston (and then quickly adding Austin and Midland), many premium flyers have already abandoned the airlines in favor of driving. Expensive, last-minute-ticket pricing, security lines and restrictions, carry-on baggage fees, and other inconveniences have made commercial air travel less appealing. What we offer them is a far better use of their time. With Rise, we are bringing them back to aviation for their inter-city commute. In essence, we are making the air travel pie larger.”
Several other companies are exploring this new concept of air service as well. Rise advisory board member Wade Everly was a former co-founder of California’s Surf Air, the first membership airline in the USA. They operate Pilatus turbo-prop aircraft and have been in operation since 2013. Like Rise, they are making plans to expand their city pairs with more aircraft on order, and sticking with turboprop service and short flight lengths.
The word membership specifically caught my attention. So how does a potential passenger become a member of these new travel membership services? How much does it cost, and what is the commitment? CEO Kennedy revealed, “Unlimited travel on Rise costs $1,650 per month, about the cost of four commercial flights between our city pairs if you factor in the intangibles—parking charges, baggage and rebooking fees, etc., that you won’t find at Rise. The initial commitment is only three months; then, customers can leave and return any time they want. Our product is a membership, akin to joining a next-generation airborne country club, and we earn loyalty by making our service something that makes people’s lives better.” Along those lines, Rise is teaming up with Need, a company that creates travel clothing, accessories, and lifestyle necessities. Much like some exclusive First Class commercial service, passengers will receive wearables and other products to take home with them.
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It seems that personal service is a common focus among these new travel membership programs. Wheels Up—a New York-based air service founded by the originators of the fractional concept at Marquis Jet (that later became NetJets)—offers memberships in their King Air and Citation aircraft that include a concierge service they call Wheels Down. Customers are paired with a 24- hour specialist to help them access exclusive parties, restaurants, and events. Plus, Wheels Up recently partnered with the luxury yachting membership program, Barton & Gray Mariners Club, for air/sea membership reciprocity. With that elite combination, I can smell the rarified air of exclusivity as these membership programs make the top shelf of opulence one step easier to reach.
I still wondered how travel membership programs planned to make a profit. Clynt Taylor, Chief Growth Officer at Rise, gave me some insight: “Most traditional airline and charter companies have to fill enough seats on flights to cover their costs. Our membership-based business model is different. Our revenue doesn’t come from the sale of seats on planes; it comes from the single monthly membership fee paid by each of our members for our fly-all-you-want private air travel experience. We know at the beginning of every month the number of our memberships and the number of our scheduled flights. The response to Rise has been extremely positive. We’re pleased to have enough members signed up in Dallas, Houston, Austin and Midland to fly profitably from day one. As with any membership-based service, the number of memberships is limited. We are almost full in Dallas but still have memberships available in Houston, Austin and Midland.”
As a pilot, I was curious about who is actually flying these new airplanes, so I asked CEO Kennedy if Rise is a certified air carrier. “Rise is a service company. We have an exclusive agreement with Monarch Aviation, who holds the FAR Part 135 operating certificate and has been in operation for over 30 years. Proving runs are underway, and we will begin with two aircraft, but we expect to rapidly triple in size, assuming the membership model plays out as anticipated in our core markets.”
Since Monarch Air is traditionally a charter service, I had a few questions about scheduling with Rise. How do customers choose flights? Can I find Rise in any commercial reservation systems, or anywhere online? Are the aircraft available on demand? CEO Kennedy explained: “Flights are scheduled and can be reserved up to six weeks ahead of time through our proprietary computer app. Customers can book up to six flights at a time. The schedule will revolve around business hours during weekdays, enabling customers to commute between cities, and spend each night at home. Weekend fun flights— traveler reward opportunities—will revolve around recreational destinations, such as jaunts to Jazz Fest in New Orleans, or hops to cities hosting concerts or special events, in tune with our membership’s desires. Since Rise is an all-you-can-fly program, our weekend fun flights help create the feel of a mobile country club membership that defines us, and networking among fellow executives is an additional intangible benefit.”
One disadvantage to the fledgling travel membership concept is the current lack of destination choices—fun flights aside. Rise is focusing on weekday service within Texas, while Surf Air is California-centric. Commercial frequent flyers have the extensive, worldwide route structures of their preferred, established airline to earn and redeem award miles during their travels, as well as the additional destinations of their respective airline’s partnerships, such as oneworld, Star Alliance, or SkyTeam. Even stand-alone Southwest Airlines serves 93 destinations, and usually with high frequency between city pairs. Travel membership services will have to focus on a specific niche and find the clients who need frequent commutes between the specific cities served. But, if that happens to be you…
Imagine the ability to fly unlimited times between select cities on Beechcraft King Air 350i twin-turboprop aircraft. Drive your car right up to the front of your private terminal just minutes before departure and hand your keys to a valet—this special, front-row, V.I.P. airport parking is included. Walk alongside your pilot across the tarmac and straight to your awaiting plane. There is no frisking, no pat downs, and no ritual confiscation of toiletries. Inside the cabin, you may choose any wide, leather seat. They all have windows and are all also on the aisle—there are no dreaded, middle seats. And folded neatly under your seatbelt, you might find a new, logo-embroidered pullover fleece waiting for you—a gift and wearable proof of your membership. Or maybe, on this flight, there’s a new shaving kit for your full-size shampoo and shaving cream that you were allowed to carry onboard and didn’t have to stuff into a clear, quart-size, plastic baggie. Your personal concierge can handle all your ground transportation and lodging needs while you are away. But, more likely, you’ll be back onboard a return flight this evening so that you can sleep at the best destination— your own home. Holy cow, did your car get washed and detailed while you were gone?
Air travel membership services may be new, but I envision them as the up-and-coming realm of the serious, inter-city commuter. At roughly the cost of four, last-minute commercial flights per month, travelers will enjoy a cost-neutral, time-saving experience with all the trimmings of personal service. Time will tell if enough customers will respond to the unlimited pricing model, and if it is sufficient to make a long-term profit. Every new idea starts out small, and this one is just starting to spread its wings. Somewhere in between airliners and private jets, a new way to travel is growing. Yes, it is now a thing.