Uber for Frequent Fliers
The rise of Rise, a private air-service start-up.
A blue 737 sits on the taxiway at Houston’s Hobby Airport as I roll by in an eight-seat Beechcraft King Air turboprop. I’m flying to Dallas for an interview with Nick Kennedy, the co-founder and CEO of Rise, a private air-service start-up that’s half Southwest Airlines and half Netflix, with a dash of Uber.
Rise began flying last July, and it now makes sixty trips a week between Dallas, Houston, and Austin. But as I peer out the window, my six-foot-three-inch frame taking full advantage of Rise’s ample legroom, I can’t help but recall how I used to make the Houston-Dallas commute.
In the nineties, I lived in Dallas and oversaw a news bureau in Houston, making me a regular on Southwest flights between Love Field and Hobby. The terror attacks of September 11, 2001, changed all that. With the added security measures, flying commercial from Dallas to Houston was no longer that much faster than driving. So I swapped the 737s for Interstate 45.
Rise hopes to assume Southwest’s old mantle as a Texas taxi. Kennedy got the idea for the company a couple of years ago. For years he has worked as an entrepreneur, helping start various companies in Orlando, Philadelphia, and Los Angeles, all while living in Dallas with his wife and three children. He racked up two million miles on commercial airlines, but when one of his companies got bought by a billionaire with a private Gulfstream, he had an epiphany. He was swayed not by the luxury but by the convenience—if he had his own plane he could spend more time with his family. But that was too costly a scenario for him to seriously consider. One day, though, he noticed how many private planes sit idle for days on end; many fly only three hundred hours a year. Why not put those unused assets to work while saving busy businessmen such as himself valuable time?
And rather than operating like a traditional airline, which sells tickets for individual seats, Kennedy realized he could run Rise as a subscription service. For a $750 deposit and a monthly fee that starts at $1,650, members can fly as often as they like on private planes contracted from a handful of operators, such as Monarch Air, a thirty-year-old Dallas-based charter company. That’s too pricey for leisure travelers, but it’s far cheaper than traditional private air service, and for people who fly commercial as little as four times a month, the cost is comparable. There are added benefits: no parking hassles (Rise offers valets that will bring your car to the plane), security lines, pat-downs, or body scanning, and you don’t have to be at the company’s private terminal until fifteen minutes before your flight.
“I’m incredibly fortunate to be doing this now,” Kennedy says, noting that the Internet and the “sharing economy” of Uber and Airbnb have given him a set of tools that Southwest didn’t have when it started, in 1971. “Five years ago, the idea that you would be sharing something with somebody was foreign.”
Like the Southwest of old, Rise appeals to travelers such as Pierce Bush, the chief executive of Big Brothers Big Sisters Lone Star. Since last August, Bush has used Rise to commute between his Houston home and his office in Irving. “It’s a game changer,” he says, noting, with a nod to his family’s political heritage (he’s the grandson and nephew of the former U.S. presidents), that Rise could find a new following shuttling lawmakers to Austin when the Legislature convenes in 2017.
Kennedy says he believes Rise’s real potential will be to stimulate traffic in its markets, not steal traffic from existing airlines. While he won’t disclose the numbers, Kennedy says Rise has thousands of subscribers, up from hundreds last fall. Eight months after it began flying, the company was generating about $10 million in revenue and, he says, is already profitable.
That makes it unusual in the perpetually beleaguered airline world, but Rise is really as much a tech start-up as an air carrier. Kennedy’s last venture was a health-care company, and he doesn’t bear the scars of an airline executive. “A year ago, I didn’t know the first thing about planes,” he says. In fact, until I mentioned it to him, he was unaware of the prior existence of UltrAir, a Houston-based all-luxury start-up that lasted six months in 1993.
Rise’s pricing structure may shield it from the fare wars that doomed UltrAir and other luxury carriers. And by not owning planes, it avoids costly airline infrastructure and can contract with different operators for different aircraft as it expands—or even license its model to others.
The airline business, though, is quick to draw competitors. Surf Air, a California subscription air service, plans to enter the Dallas market next year, and Texas Air Shuttle, based in Conroe, plans to begin flying this spring between Houston and McKinney. To survive the competition, Kennedy may have to adopt two other Southwest tactics: keeping his costs down so that he can undercut competitors on price and adding routes outside of Texas. He has already announced a discount version of his service, Rise Anywhere, that offers a lower-cost membership and flights to thirteen cities—including seven cities outside the state’s borders, such as New Orleans and Aspen—whenever there are enough clients to fill a plane.
“We don’t care where we fly. We care where our members want to fly,” Kennedy says. “We’re trying to build a technology platform that helps them do that.”
Despite the profound differences between Rise and Southwest, Kennedy frequently cites the airline as an inspiration. In fact, he says, he even reserved the company’s first membership in the name of Southwest’s legendary co-founder, Herb Kelleher. So far, Kelleher hasn’t had a chance to claim it.