Greyhound Hopes To Steer Toward A More Stable Future -- Bus Company Starts Comeback Route
DALLAS - Lee Boyd, a big, affable ex-Marine, has had what you
might call some tough breaks lately: He's between jobs, he lost his
truck in a divorce and his right hand is bandaged from a bull-riding
injury.
Boyd is leaning against a wall in the downtown Dallas terminal of Greyhound Lines Inc., waiting for a bus to the suburb of Mesquite, where he plans to ride bulls in a rodeo. The 32-year-old has ridden his share of buses, too.
"I like it because it'll get me where I need to go," Boyd said. But, he added: "If I had my choice, I'd either drive or fly."
Greyhound, like Boyd, has had its share of hard knocks. Intercity bus ridership has dropped steeply since the 1960s as air travel has grown more popular, and Greyhound, the only national bus line, is struggling to avoid bankruptcy through a financial restructuring.
Some question whether Greyhound has a future at all.
But many who have looked closely at the bus company say there is a real, continuing demand for national bus service - if Greyhound can overcome what they characterize as self-inflicted management problems.
"This company was successful for 50 years, and then people tried to change it," Greyhound bondholder Chriss Street said. "They tried to become the airline of the road."
Greyhound, he complained, has added an expensive, computerized reservation system and overcentralized its management to the detriment of its bread-and-butter business of getting people wherethey need to go cheaply and on time.
That has taken place while those with little money, a key component of Greyhound's customer base, have become more numerous, Street said.
"Riders are out there," he said. "There's nothing wrong with not being affluent. It's a fact of life for most people. Greyhound provides the ability to get from here to there at a very low price."
People are still riding the bus. Greyhound alone carried 15.4 million passengers last year.
But "The industry has a problem. People don't particularly want to get on buses unless it's their only option," said Gerald Connor, president and chief executive of Connor, Clark & Co., which holds more than 18 percent of Greyhound's stock.
Greyhound has been faulted for focusing so sharply on cutting costs that service was hurt and revenue lost. It's also been criticized for competing, instead of cooperating, with the smaller regional carriers with whom it shares passengers.
Bill Steele, president and chief executive of Raleigh, N.C.-based Carolina Coach Co., said riders benefited when Greyhound and regional carriers created a seamless national bus system in the late 1980s.
The carriers operated from the same terminals and shared a national timetable.
Steele said he hopes to return to that era of more cooperation - and business - under Craig Lentzsch, who took over Tuesday as Greyhound's chief executive. Lentzsch, well-known in the industry, was an investor in the 1987 buyout that took Greyhound private and remained there until 1989.
"If Greyhound responds with good management, I expect to see the business rebound," Steele said.
Ray Neidl, an analyst at Furman Selz, worries about competition from low-cost, startup airlines. But Fahnestock-Christopher analyst Allan Roness says there are several factors working in Greyhound's favor.
Many people don't fly; the elderly population, which favors buses, is growing; airlines someday must raise prices and won't be as competitive with Greyhound; and buses go some places airlines don't, he said.
Boyd is leaning against a wall in the downtown Dallas terminal of Greyhound Lines Inc., waiting for a bus to the suburb of Mesquite, where he plans to ride bulls in a rodeo. The 32-year-old has ridden his share of buses, too.
"I like it because it'll get me where I need to go," Boyd said. But, he added: "If I had my choice, I'd either drive or fly."
Greyhound, like Boyd, has had its share of hard knocks. Intercity bus ridership has dropped steeply since the 1960s as air travel has grown more popular, and Greyhound, the only national bus line, is struggling to avoid bankruptcy through a financial restructuring.
Some question whether Greyhound has a future at all.
But many who have looked closely at the bus company say there is a real, continuing demand for national bus service - if Greyhound can overcome what they characterize as self-inflicted management problems.
"This company was successful for 50 years, and then people tried to change it," Greyhound bondholder Chriss Street said. "They tried to become the airline of the road."
Greyhound, he complained, has added an expensive, computerized reservation system and overcentralized its management to the detriment of its bread-and-butter business of getting people wherethey need to go cheaply and on time.
That has taken place while those with little money, a key component of Greyhound's customer base, have become more numerous, Street said.
"Riders are out there," he said. "There's nothing wrong with not being affluent. It's a fact of life for most people. Greyhound provides the ability to get from here to there at a very low price."
People are still riding the bus. Greyhound alone carried 15.4 million passengers last year.
But "The industry has a problem. People don't particularly want to get on buses unless it's their only option," said Gerald Connor, president and chief executive of Connor, Clark & Co., which holds more than 18 percent of Greyhound's stock.
Greyhound has been faulted for focusing so sharply on cutting costs that service was hurt and revenue lost. It's also been criticized for competing, instead of cooperating, with the smaller regional carriers with whom it shares passengers.
Bill Steele, president and chief executive of Raleigh, N.C.-based Carolina Coach Co., said riders benefited when Greyhound and regional carriers created a seamless national bus system in the late 1980s.
The carriers operated from the same terminals and shared a national timetable.
Steele said he hopes to return to that era of more cooperation - and business - under Craig Lentzsch, who took over Tuesday as Greyhound's chief executive. Lentzsch, well-known in the industry, was an investor in the 1987 buyout that took Greyhound private and remained there until 1989.
"If Greyhound responds with good management, I expect to see the business rebound," Steele said.
Ray Neidl, an analyst at Furman Selz, worries about competition from low-cost, startup airlines. But Fahnestock-Christopher analyst Allan Roness says there are several factors working in Greyhound's favor.
Many people don't fly; the elderly population, which favors buses, is growing; airlines someday must raise prices and won't be as competitive with Greyhound; and buses go some places airlines don't, he said.
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