The “disruptive” potential of subscription “all you can fly” airline operations in Australia is very high, despite the barriers to success. Airly, a proposed new Sydney-Melbourne service reported by Fairfax, comes with some very strong pros and cons.

At the outset, a monthly fee of $2550 for unlimited flights between both cities in a fast twin-engined small executive turbo-prop may seem daunting.

That’s the equivalent of around two business-class return trips a month on Australia’s major domestic route before corporate account discounts kick in, or around seven to eight return economy class flights on full-service Qantas or Virgin Australia jets at readily available fares.

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If you are really flying eight return trips every month between both cities you need help, or a life. Although one of the great attractions of the Airly model is that the frustrations of using the Sydney and Melbourne main airports would be replaced by the often surreal sense of dislocation that the alternatives of the Bankstown and Essendon airports offer.

Cut out both dysfunctional major city airports and you may get your life back. (Or think you are about to lose it these days if you have cause to meet or use a private light aircraft charter at Bankstown.)

But there are of course obstacles to success for Airly. One is the nature of the customer, which will usually be the managed corporate account, not an individual exercising choice.

The frequent flying top-yielding customer in Australia flies on a corporate, government or institutional account, which is why Qantas and Virgin compete so vigorously to win contracts from those travel generators. These inducements include bulk discounts, free lounge memberships and often invitations to join the select Chairman’s Lounge, or the ultra-discreet The Club — not to the users of the accounts, but the various CEOs or heads of departments who sign those contracts.

If you have control over the choices made by a lot of executive flyers, you are probably going to be in a lounge they may never see.

These special lounges, as well as those used by the working-flying classes, are also often the destinations, rather than the city in which they are located. They are used as exceedingly well-appointed venues for meetings or interviews by Qantas and Virgin loyalists who thus save a trip into town at the other end.

Airly has to crack the power of the clubs. Or maybe not. If the eight seat turbo-props to be used on services actually flew full on every sector, they wouldn’t cause much of an overall effect on the established carriers.

The US experience of the Surf Air model, as reported by Fairfax, has been successful.

An opinion sought from independent and highly regarded US airline and aviation analyst Robert Mann, makes the point that despite a lack of some financial clarity, the value of Surf Air has risen, its network has expanded, and it is being imitated.

This is his analysis:

“In its initial three years of operation, Surf Air has grown its fleet to thirteen Pilatus PC-12 aircraft from three, and their network from three destinations to eleven, which suggests they have been able to convert a good number of what they claimed pre-startup to be ‘thousands’ of customers interested in paying their $1950 (and up, based on service level) monthly subscription prices (three months minimum commitment, plus a $1000 initiation fee). The offer term sheet now comprises individual, family and corporate memberships …

“The Surf Air offer is styled as ‘unlimited service’ (the proverbial ‘all you can eat’ buffet) but what the fine print establishes is several levels of service, dependent on how many … reservations/boarding passes a customer wishes to hold at any one-time …

“In summary, it appears Surf Air has endured in part by pivoting from purely individual membership sales to incorporate more of a corporate subscription model. While still limited to California operations, they are an actual airline, operating their own fleet, and have dramatically expanded their intra-state network. Also evident of success, the Surf Air business model has been replicated in the Dallas, Boston and New York areas, in at least one case by a member of the original Surf Air founding team, with several other ‘look alike’ marketing platforms (as distinct from actual air carriers) offering similar services.”

The Surf Air network uses single-engined high-performance Pilatus PC-12s, while Airly will use twin-prop King Airs already on the operating certificate of the regional carrier that will provide the pilots, the aircraft, the recurrent training and the maintenance.

That choice makes regulatory sense in Australia, although there may be an issue with Bankstown Airport from insurance companies and the Civil Aviation Safety Authority given its somewhat concentrated and variable experiences with privately owned light planes and flying-school circuits.

King Airs have confined seating and a tiny toilet passengers can anticipate using with their knees beside their ears and the risk of injuries from efforts to shut the door on a facility fellow passengers will wish is never used in their proximity.

But the windows are good-sized ovals, and the whirr of the rotating knives as you plough through the lower, more turbulent altitudes generally inhabited by turbo-props should take your mind off any other distractions. Who needs the boring predictability of a jet when you can take something with propellers through the middle layers of a cloud deck?

If flying is strictly about time saving between nearer city pairs, the Airly model delivers, if it gets half a chance to gain traction.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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