In a historic move, the German company FlixMobility, parent company of FlixBus, has bought the iconic American brand, Greyhound. The sale is for $172 million with a deferred consideration of $32 million to be paid over 18 months. But what exactly will this mean for America’s leading bus company and intercity travel in the USA? While this remains to be seen, the fact of that matter is that both FlixBus and Greyhound share the vision of expanding bus ridership throughout the US by making a cheaper and eco-friendly alternative to private cars.
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Founded in 2013, FlixBus has grown exponentially since its founding. Today, the company covers more than 2,500 destinations in 36 countries in addition to the United States. FlixBus entered the US market in 2018 on the west coast. Since then, the green buses expanded their own network throughout the country. By contrast, Greyhound is almost 100 years older, founded in 1914. The company serves nearly 2,400 destinations across North America, carrying 16 million passengers a year. What’s more, Greyhound buses and stations have since gained legendary status, immortalized in a variety of songs, films and series.
How was Greyhound before the pandemic?
Prior to the COVID-19 pandemic, Greyhound faced several challenges. In 2018, FirstGroup cited the growing competition posed by low-cost US airlines as the cause of a £327 million loss. Additionally, a 2018 report from the director of customer insights and loyalty, Darrin Rowe, addresses the issue of brand perception. In the report, Rowe states “Greyhound’s position as a loved and iconic American brand has eroded in the face of poor customer experience and a rise in inexpensive travel alternatives.” He also cited other challenges facing the brand, such as a lack of investment in technology, limited customer data and inefficient pricing tools.
Greyhound Cancels Operations in Canada
Even before COVID-19, Greyhound struggled to maintain its grip in Canada. In 2018, Greyhound Canada suspended all its operations in Western Canada. Nearly three years later, and because of the pandemic, Greyhound Canada cancelled all operations. Greyhound USA currently only provides cross-border connections between the two countries.
However despite this, between 2019 and 2020 the most popular Greyhound route searched in the CheckMyBus search engine was between Montreal and Ottawa, followed by the Ottawa – Toronto and Montreal – Toronto routes. In fact, 8 of the top 10 Greyhound routes during this time were Canadian.
How has the COVID-19 Pandemic affected Greyhound?
Bus Transportation in the United States had been severely affected in 2020 by the pandemic and a dearth of government support. According to the president and CEO of the American Bus Association, Peter Pantuso, “The pandemic has hit the bus and motorcoach industry really harder, I think, than almost any other segment.” While especially dire for smaller operators, this is no less true for Greyhound. According to CheckMyBus data, the number of passengers booking Greyhound buses from 2019 to 2020 dropped by 57%.
What will come next for the Greyhound brand?
What we still don’t know is the direction FlixMobility will take with Greyhound, primarily its brand. Greyhound buses and its stations have played a major role in American iconography for over a century. FlixMobility could revitalize the iconic brand, keep it the same, co-brand with FlixBus or alternatively could do away with the brand all together. In addition to the fleet of buses, Greyhound is also the name of bus stations through the country.
In a poll conducted by CheckMyBus, among transportation professionals, the vast majority expect a change of some sort. 49% believe that Greyhound and FlixBus will co-brand, while 33% believe that FlixMobility will discontinue the Greyhound brand. 15% expect they will revitalize the brand. Just 3% of those polled believe the brand will remain the same however. The Greyhound brand is emblematic of bus transportation in the United States. While this comes with both positive and negative connotations, how FlixMobility decides to move forward will likely impact both Greyhound and ground transportation in North America.
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