Rise advisory board member Sam Gilliland, left, and founder and CEO Nick Kennedy

The Netflix of Airline Travel

Rise aims to disrupt the market with a “common-sense” business model.

After helping one of the world’s wealthiest doctors grow a fledgling health IT company into an industry powerhouse, Nick Kennedy had earned his place as a rising force in the startup world. But after flying 2 million commercial miles in a decade, he often found himself waiting helplessly, like everybody else, for a delayed plane at the airport. “One of those times, I started jotting down ideas,” Kennedy says. 

The company that Kennedy had helped the doctor grow, called eviti Inc., used a so-called recurring-revenue model, charging physicians a per-member, per-month fee to access oncology treatment information on a technology platform. The success of eviti made Kennedy a fan of recurring revenues. “The best kind of money in the world is mailbox money,” he says. “Members pay a little bit every month, and it creates consistent revenue so you’re not beholden to outside factors.”

As he sat for endless hours in the airport, Kennedy wondered if he could apply the same model to airline travel. The answer was yes. The result is a new company called Rise, a Dallas-based travel service offering an unlimited, “fly all you want” membership that uses private planes flown by FAA-sanctioned commercial pilots. For flat fees starting at $1,650 monthly, the company promises no waiting in airports, no security lines (members are pre-screened and pre-approved for flight), and no additional fees, meaning even valet airport parking is included.

Rise has already signed on dozens of “founding” members who will use a tiered, Netflix-type model for the right to book either two, four, or six reservations at a time, plus enjoy access to companion passes. This fall, Kennedy was expecting to have a few hundred high-flying members—mostly CEOs, small-business owners, consultants, and other businesspeople who regularly commute to the same markets—signed up before the first flight took off.

Rise is modeled after a similar startup in California called Surf Air, which launched two years ago. 

Rise planned to offer several weekday flights between Dallas and Houston using two eight-seat, Beechcraft King Air 350 turboprop planes that will crisscross paths. The company’s flight network was expected to grow quickly from there. On weekends, founding members eventually will be able to hop on pre-arranged “Fun Flights” to destinations such as Vail, Colorado; Seaside, Florida; and Las Vegas, or to sporting events in college towns such as Austin; College Station; Lubbock; and Norman, Oklahoma.

Perhaps surprisingly, Rise doesn’t anticipate taking market share away from short-haul carriers such as Southwest Airlines, or even from other traditional charter operators. “We will probably not even be a blip on their screen,” says Sam Gilliland, a former CEO of Travelocity and former chairman and CEO of Sabre Holdings, who has joined Rise’s advisory board. “Our target market is people who were tired of air travel and had just decided to drive instead. Or people who are using the phone or video conference instead of flying, but would rather do their meetings in person if they don’t have to spend an hour and a half getting through the airport.”

However, at least one of Rise’s first members plans to turn in his Southwest Airlines boarding pass for tickets on Rise. Jason Boso, who owns local eateries including Dallas-based Twisted Root Burger Co., has begun franchising the restaurant concept, a process that will take him from the current 12 Twisted Roots into several new markets in Texas and Oklahoma.

Boso, who travels to Austin at least twice a month, was expecting to fly about once a week once Rise lifts off. “I’m lucky with the timing of this,” he says. “It just makes a lot of sense for my situation.” 

Gilliland says what’s most promising to him about the Rise business model—besides the recurring revenue component—is its common-sense approach from both a business and consumer standpoint. “Air travel has become very complex,” Gilliland says. “But this model is very simple.” 

Rise is modeled after a similar startup in California called Surf Air, which launched two years ago. Surf Air signed on a reported 300 members in its first year and is believed to have a 5,000-person waiting list. The company’s co-founder and former CEO, Wade Eyerly, serves as Rise’s executive chairman.

The main difference between Rise and Surf Air is that Surf Air, which has 81 employees, secured $17 million in venture capital funding to acquire planes and hangars, while Rise will use a charter operator and function initially with only a handful of employees. Kennedy’s company is using a small amount of angel investment—he wouldn’t say exactly how much—to get off the ground, a sum that Kennedy expects to last until the company is ready to expand into other markets.

And, because of the recurring-revenue model, Rise will be cash-flow-positive when the first plane takes off, Kennedy adds. The company is also aiming to market to third parties the technology platform it uses to measure and plan capacity on planes, which could create another revenue stream.

“Whether we are a technology company or an airline company or a hybrid remains to be seen,” Kennedy says. “But there are thousands of people in Texas who have the means to do this, and this industry is desperate for innovation. This is just a glimpse of that innovation.”  

Comments