US members-only VIP airline Surf Air has placed an order with Pilatus Aircraft for up to 65 PC-12NGs, which will be used to expand its coverage across the USA and help to satisfy customer demand for its programme. The deal includes 15 firm orders for the single-engined turboprop and options for another 50 – and is one of the largest single contracts for the eight-seat type to date.
Surf Air has financed the purchase through a $65 million loan from San Francisco investment firm White Oak Global Advisors, with the new aircraft used as security, Surf Air has also raised another $8 million from new and existing equity investors.
The Santa Monica-based company was launched 14 months ago with three seven-seat pre-owned PC-12s. It is offering its members an all-you-can-fly service to a range of secondary airports across California, including Los Angeles and San Francisco, for a monthly membership fee
“Over the past year, our membership has grown to more than 900 and we have another 350 on the waiting list,” says Surf Air chief executive Jeff Potter.
Surf Air is looking to add up to seven more California-based destinations to its line-up over the next 18 months, including Sacramento, Palm Springs and San Jose. “We are also looking to expand the service to other US regions including Texas, Florida and the Northeast,” says Potter, who is the former chief executive of US low-cost regional carrier Frontier Airlines and members-only VIP travel club Exclusive Resorts. “If we continue to grow at the same rate, we will have to order more aircraft,” he adds.
Surf Air faces hefty competition in this market sector from commercial airlines, which provide more frequent and often cheaper flights.
However, Potter believes the company’s offering sets it apart from its rivals. “With the PC-12, we have access to so many more airports than a typical airliner,” Potter points out. “These sites are not only often closer to members’ final destination but they remove the hassles of driving to, parking at and enduring security lines at large airports. We offer a VIP service from start to finish,” While this high-end service is also available though traditional ad hoc business aircraft operators, he argues, Surf Air is cheaper “as we provide a regular scheduled service which keeps the cost down”.
Surf Air currently has a load factor of just under 70%, which Potter would like to reduce. “Our ideal load factor is between 50 and 60%,” he says. “Having fewer passengers on board the PC-12 will help to enhance the customer experience,” he adds.
The first three eight-seat PC-12NGs are scheduled for delivery this year and another nine will be added to the fleet in 2015. With its low operating costs and its ability to take off and land from short, unpaved runways, the PC-12NG has become an increasingly popular aircraft for operators in the USA. The country boasts an installed base of 730 executive/passenger configured types, according to Flightglobal’s Ascend Fleets database – almost two-thirds of the worldwide civil PC-12 fleet. Pilatus has 45 orders and 60 options for PC-12NGs, according to Ascend.