German company Flix has made headlines recently for its acquisition of the struggling American bus company Greyhound Lines. Greyhound, long known for its negative reputation among customers, was purchased by Flix for $172 million, after halving its ridership due to the pandemic. Despite Greyhound’s poor ratings and reputation for dirty and delayed buses, Flix CEO André Schwämmlein believes that their European playbook could help turn the company around in the United States.
Flix’s strategy in Europe has been to offer rock bottom fares while outsourcing the driving of buses to contractors. They have focused on providing small creature comforts, such as leather seats, Wi-Fi, and power sockets, to attract riders. The company has seen success in Europe, becoming a leader in intercity bus routes and expanding into 44 countries. With a recent $1 billion investment from a Swedish private equity fund, Flix is poised for further growth and expansion.
The acquisition of Greyhound presented Flix with a significant challenge, as they inherited a fleet of aging buses, unionized drivers, and a large network of routes across the United States. Flix has been working to revamp Greyhound’s operations, including overhauling ticketing and routes, targeting new riders such as college students, and improving on-time performance. Despite some improvements, Flix acknowledges that there is still work to be done to address customer complaints and negative reviews.
Flix’s low-cost, asset-light model has been successful in Europe, but the company faces challenges in adapting to the longer distances and different expectations of American passengers. The company is working to make adjustments, such as moving bus departures to major transportation hubs and ensuring closer proximity to mechanics for maintenance. Despite these efforts, Flix is still facing competition from other bus companies and lingering negative perceptions of Greyhound.
Overall, Flix remains optimistic about the future of Greyhound and its operations in the United States. While the company has seen some financial success since acquiring Greyhound, including increased revenues and expanded routes, there is still room for improvement. With a focus on customer service, operational efficiency, and continued investment, Flix is working to change the perception of Greyhound and establish itself as a leader in the global bus market. As Schwämmlein states, changing perceptions takes time, but with dedication and hard work, Flix believes it can overcome the challenges facing Greyhound and establish a successful presence in the American transportation industry.
