Status: October 21, 2021 3:40 p.m.
The Scottish company FirstGroup had to shell out an impressive 3.6 billion dollars in 2007 for the takeover of the legendary US bus operator Greyhound. Now Flixbus is buying it – at a bargain price.
Young people who have backpacked through the USA have usually traveled part of the way in one of the legendary Greyhound buses, as the vehicles drive to more than 2000 destinations between New York and San Francisco for little money. In the future, the intercity buses will belong to Flixbus.
The parent company FlixMobility announced today that it will buy Greyhound Lines, still the largest long-distance bus operator in the USA, for up to 172 million dollars from the Scottish rail and local transport company FirstGroup. “Continuous further development of our network through cooperations or acquisitions has always been an essential part of our growth strategy in order to further expand our global presence,” explained FlixMobility co-founder and boss Jochen Engert. “The acquisition of Greyhound takes us a decisive step further and strengthens FlixBus’ position in the USA.”
Declining passenger numbers
FlixMobility is initially paying around $ 140 million for greyhounds, with 32 million expected to flow in installments over the next 18 months. The new owner rents Greyhound’s properties, which will remain with FirstGroup. The $ 108 million state grant Greyhound received from the US government to compensate for the pandemic-related losses will remain with Greyhound and will benefit FlixMobility. The bottom line is that the greyhound is valued at $ 46 million.
This gives FlixMobility the 100-year-old bus company for a bargain price. However, Greyhound has long since passed its prime. In 2019, the year before the pandemic, the buses carried 16 million passengers; in 2006 it was 19 million – a long way from the 1990s and 80s when up to 40 million people traveled across the country with greyhounds. This is one of the reasons why Greyhound has narrowed its travel destinations more and more in recent years. In Canada, with significantly fewer inhabitants than the USA, business has recently been so difficult that Greyhound decided to withdraw completely.
The legendary times are over
Finally, there were also the restrictions of the corona pandemic. From April 2020 to March 2021, Greyhound had sales of $ 423 million and a meager operating profit of $ 1.8 million, according to previous owner FirstGroup. In addition to tourists, it is mainly immigrants who keep the buses running today: those who cannot afford their own car and who cannot get to their destination with the poorly developed train network. The days when greyhounds stood for America’s great freedom and the buses also rolled across the screen in Hollywood films are apparently over.
It remains to be seen whether Flixbus will succeed in reviving the legend and also increasing the number of passengers. The German company has been represented in the USA since 2018 and restarted operations there in early summer. USA boss Pierre Gourdain announced in June that Flixbus wanted to offer the most extensive network there by 2023. Flixbus had carried 62 million passengers worldwide in 2019 – before the virus outbreak. The pandemic had brought the travel business almost completely to a standstill at times.