The Surf Air management team has hit a bit of turbulence, with founder and CEO Wade Eyerly officially stepping down, according to an email sent out to members. He’s being replaced by someone who has had experience both in the membership and airline industries — former Exclusive Resorts and Frontier Airlines CEO Jeff Potter.
Founded in 2011, Surf Air provides a membership-based private jet service between Palo Alto, Monterey, Santa Barbara, and Los Angeles. The idea was that members would pay a monthly fee for an all-you-can-fly service between any of those points.
In 2012, the company raised $7 million in funding from investors like Anthem Venture Partners, and saw participation from NEA, TriplePoint Capital, Siemer Ventures, Baroda Ventures, Gilad and Eytan Elbaz, Rick Caruso, Jeffrey Stibel, Mike Walsh, Paige Craig, Aviv Grill, and Bill Woodward.
We had heard rumors that the management shakeup was taking place a few weeks ago, but the membership-only airline officially acknowledged the change to its members in an email earlier this week.
Despite having 430 paying members, the company was having trouble raising a new round of funding, according to a source. That might have been due to problems in the company’s operations. One member we talked to said that some of the airline’s scheduled flights were regularly overbooked, while other legs ended up running empty.
The management change is apparently being made to improve that, with the help of Potter and some folks who better understand the logistics of air travel.
In addition to the new CEO, the airline announced that Anthem Ventures EIR Sudhin Shahani is taking over the role of executive chairman. Jim Sullivan, who had previously served as VP of Flight Operations for Frontier, has joined Surf Air as SVP of Operations.
The shift also comes as Surf Air is adding new stops for its flights, including Las Vegas and Truckee, Calif.
For what it’s worth, Surf Air isn’t the only startup in the airline industry to have run into hard times. BlackJet, the so-called Uber for private jets, has also had problems raising more funding.
UPDATE: I’ve just spoken with Potter, who’s given me his view on Surf Air and his new role there.
He compares his joining Surf Air to the time in which he joined Frontier. At the time, it was an incredibly small, one year-old company that ended up growing to reach about 80 destinations throughout the U.S. when he left. That experience will be useful not just from an operational standpoint, but in helping Surf Air to expand into new territories.
“On the operational side, it’s not only that Jim [Sullivan] and I have spent our careers in aviation,” Potter said. “Both Jim and I were at Frontier at a very similar stage to where I’m joining Surf Air. I helped support that growth from an operational perspective.”
He said that the business and the model are both sound, and that he’s excited about the membership component as well as the aviation component, based on his previous experience. He also said he’s confident that Surf Air will be able to complete its next round of fundraising and move forward from there.
“I joined a company at a time where we are going through a round of fundraising,” he said, but added, “I wouldn’t be here if I didn’t have confidence that we would fulfill that. We’ve met with various parties and believe those conversations are going very well.”
UPDATE #2: And I just got off the phone with Eyerly, who confirmed that he handed in his resignation from the company and the board this morning.
“If you can get a guy like Jeff to run an airline with three aircraft then you have to do that,” Eyerly said. He added that after three weeks of trying to figure out what his role would be, he ultimately decided to step down. He’ll still have his ownership in the company, but will no longer have a day-to-day role.
“After some reflection, I discovered that I liked being a builder,” he told me, and that he was looking to start something new. But for Eyerly, after taking the company through three rounds of funding and growing it to have more than 65 employees, he said it was a “bittersweet moment” to leave the company which is growing up fast and ready to scale up even faster.
The email sent to Surf Air members is below:
Dear Surf Air Members,
Surf Air began the journey to revolutionize air travel in 2011, just three short years ago. Since that time, not only has Surf Air exceeded all expectations in disrupting the travel experience, it has resonated with you as members, which is reflective of the high renewal rate we’ve seen since inception.
Wade Eyerly created a vision that, along with his leadership and passion, has evolved into the innovative company that now serves over 430 members. We want to personally thank Wade for his tireless efforts to bring us to this point. With a solid foundation now created, as is the case with many companies during the early chapters of their inception and growth, the time has come for us to take the next step in the evolution of Surf Air. We are pleased to announce that along with upcoming funding, there are some key management additions with deep experience that will drive the next stage of our development.
To help lead this transition, Sudhin Shahani is taking the role of Executive Chairman. Sudhin will initially be focused on the investor and funding aspects of the company but he will also play an integral role in the long-term strategic direction of Surf Air.
In addition, we are pleased to announce that Jeff Potter has become our CEO. Jeff’s experience both in the membership club sector as well as the aviation sector fits the characteristics we need to scale Surf Air profitably and continue to improve the member experience. Jeff was CEO of Exclusive Resorts, the world’s largest luxury membership vacation club, and also served as CEO of Frontier Airlines, a major airline.
Finally, Jim Sullivan has joined the company as SVP of Operations. Jim has a long, storied history in aviation and at one point was VP of Flight Operations for Frontier Airlines. Prior to that, he held management positions as Director of Flight Training and Director of Process and Procedures. During his career as a pilot, he has achieved more than 18,000 flight hours.
We want to again thank Wade for all he has done to make Surf Air what it is today. We are extremely excited for the future and welcome the new leadership team as we begin the next step to grow Surf Air into the company we all know it can become.
We thank you for your ongoing support to our services – we commit ourselves every day to ensure that we are delivering you the best air travel experience possible. We look forward to continuing to lead the evolution of air travel and enhancing our services to continually meet your needs.
Along those lines, tomorrow, we are thrilled to be announcing some great news that we are confident will create a lot of energy and excitement! Please look for the news early in the morning and we hope you’ll be as excited as we are at the beginning of this next chapter!
Regards,
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Surf Air Member Care