February 23, 2017 / 10:52 AM / in 9 months

UPDATE 1-U.S. airline Surf Air to launch European routes in May

(Adds detail)

By Alistair Smout

LONDON, Feb 23 (Reuters) - U.S. subscription-based airline Surf Air will launch in Europe in May, targeting people who fly business class in a potential challenge to the continent’s traditional airlines.

Surf Air Europe will start connecting London to Zurich during the week and Ibiza in Spain at weekends, operating a subscription model where customers pay a 1,750 pound ($2,180) monthly fee for unlimited travel.

It will later add routes to Cannes, Munich and Milan, Surf Air Europe Chief Executive Simon Talling-Smith said.

The London-headquartered airline will try to better what its sister company, Surf Air, has done in California. Launched three years ago, that company now has 3,000 members. Surf Air has ordered 45 Swiss-made Pilatus eight-seat jets ahead of the launch and a similar-sized order of Embraer planes to serve longer routes will be placed later this year.

Across U.S. and European operations, Surf Air expects to achieve $10 million in revenue for 2017.

Talling-Smith said the smaller planes and private terminals that Surf Air uses cut the waiting times associated with flying by commercial airlines.

“You have this great thirst in the market for something that’s going to be able to cut out all of that wasted time, and Surf Air is the answer to that,” Talling-Smith told Reuters.

The new service could appeal to some of the most lucrative customers for British Airways and Swiss International Air Lines: people who tend to fly business class and pay more for flexible tickets.

The 1,750 pound monthly fee compares with a last minute, flexible business class return between London and Zurich of about 500 pounds.

At the other end of the scale, Lufthansa’s low-cost division Eurowings started testing a subscription model called Flightpass this month. Passengers pay for 10 one-way flights, starting with packages restricted to certain routes from 499 euros ($526).

But with an eye to the lucrative business market, Eurowings is also offering a Flightpass package for business passengers who want more flexibility, starting from 1,499 euros for a 10 flight pass.

Surf Air has partnered with tech firm Zuora to manage the subscription service for its European launch. It was due to be take place in October last year, but was postponed after Surf Air said it needed to secure the right aircraft deal. ($1 = 0.8027 pounds) ($1 = 0.9482 euros) (Additional reporting by Victoria Bryan; editing by Susan Thomas and David Clarke)

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