Hollywood’s most famous buses come into German hands. FlixMobility, which runs the long-distance FlixBus in the Netherlands and elsewhere in Europe, and trains in Germany and Sweden, among others, buys the American bus company Greyhound Bus Lines.
Greyhound’s silver-grey, and later blue-grey buses are world famous thanks to numerous feature films: from the last scene in Shawshank Redemption until Midnight Cowboy, Batman: The Dark Knight Rises and Tomorrow Land. Greyhound has been around since 1914.
The first buses brought miners from a small town in Minnesota to the local iron ore mine. The company serves 1,750 destinations in the US, Canada and Mexico.
Unsafe bus stations
FlixMobility pays 172 million dollars (about 148 million euros) to the British transport company FirstGroup, that Greyhound had owned since 2007. It has wanted to get rid of American buses since 2019 and will now limit its modus operandi to the United Kingdom.
Greyhound may have an iconic name, but the Dallas, Texas-based company has been struggling for years. In 1983 it still had 3,800 buses in the US, and a 60 percent share of the intercity bus market. Since the mid-1980s, Greyhound has faced a lot of competition from other bus companies and low-cost airlines.
Moreover, those who could afford it would rather buy their own car than a bus ticket. It increasingly turned the Greyhound bus into a means of transportation for the American underclass. The company went bankrupt several times, was taken over several times and thus came into British hands in 2007.
FirstGroup bought the company mainly because it also ran school buses and other lucrative bus services at the time. The British tried deteriorated image of Greyhound – many delays, too few drivers, unsafe bus stations – but failed to do so. The financial results subsequently plummeted due to the corona crisis. Greyhound lost more than $12 million on revenue of $423 million in the broken fiscal year 2020/2021.
Atypical takeover
And now FlixMobility wants to try to breathe new life into Greyhound. For the German company – which in ‘corona year’ 2020 transported half as many passengers in Europe, namely thirty million – the American takeover is atypical. FlixMobility sees itself more as a tech startup in the transport sector than a pure transport company.
While FlixBus and FlixTrain in Europe do everything (technology, route planning, marketing) except actually driving the bus, FlixMobility with Greyhound will now own 1,300 buses and 2,400 employees under contract. In Europe, the company purchases services from external carriers.
For FlixMobility, the acquisition of Greyhound is above all another step in its international expansion. The German company, founded in 2012 by three young entrepreneurs in Munich, was already active in (southwestern) the US. According to the company, it is still too early to say anything about, for example, the merging of bus lines in the US.
In June, Flix announced that it is looking to expand – in both new and existing markets. At the time, the German company had 650 million dollars raised from investors including Permira and Blackrock. That investment made the company worth more than $3 billion. A next step would be an IPO, but that has been postponed until at least 2022.
Trains in Netherlands
Last year, FlixMobility expanded into rail transport in Germany – following the bankruptcy of a local train company. FlixTrain now serves forty intercity destinations in Germany, including home port Munich. Flix trains have also been operating in Sweden since April, and in July FlixMobility announced that it plans to become active in Brazil by the end of the year.
That country is going to liberalize public transport. According to Flix, 60 percent of Brazilians use long-distance buses.
Also read: NS competitors start substantive proceedings for open tender for the main rail network
FlixBus has been active in the Netherlands since 2019: it took over bus operator Eurolines from the French company TransDev. Flix does not yet run trains in the Netherlands, but that could change.
Earlier this week it was announced that FlixBus has joined the lawsuit that the interest organization of transporters Federation Mobiliteitsbedrijven Nederland (FMN) is pending against the Dutch State. FMN, Flixbus/FlixTrain and the European interest group Allrail believe that the State should not have awarded the most important intercity connections in the Netherlands (the ‘main rail network’) to NS. The fact that Flix is now joining the other parties may indicate that the company also wants to start operating trains in the Netherlands.
A version of this article also appeared in NRC in the morning of October 22, 2021
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