Members-only airline Surf Air Inc. has been sued in federal court over allegations of defaulting on agreements it has with the company that has operated its flights in California.
Surf Air owes more than $3 million to Encompass Aviation LLC, in Hawthorne, according to the lawsuit filed in U.S. District Court in New York.
Surf flies out of Hollywood Burbank Airport to the San Francisco Bay area, San Carlos and Truckee. It operates on a membership only business model that costs $2,500 a year plus $545 per flight for a pay-as-you-fly subscription to $1,950 a month for unlimited service.
On Friday, Surf Air announced that it was transitioning more California flights, including those from the Los Angeles area, to Advanced Air LLC, also in Hawthorne. Advanced will serve Surf’s members with its own and Surf Air branded aircraft.
In its release, Encompass said that it received a termination letter from Surf on Friday after it gave Advanced the California flights that Encompass had been operating since May 2017.
“This is in violation of the right of first refusal clause of the contract between Surf and Encompass,” the company said in the release.