Greyhound cuts fares up to 50% in bid to spur travel

December 30, 1992|By Los Angeles Times

Greyhound Lines, the nation's largest inter-city bus company, yesterday discounted fares 20 percent to 50 percent in an effort to boost travel during the slow winter months and counter cut-rate airline prices.

Since emerging from bankruptcy protection last year, Greyhound has aggressively lowered fares to match competitors on the ground and in the air. During the summer, the Dallas-based bus company cut the price of a one-way ticket between Washington and New York to $5 during a fare war.

Under its "Go Easy Fares," Greyhound will offer a 20 percent discount on tickets purchased seven days in advance of travel, a 35 percent discount on 14-day advance purchases and a 50 percent cut on 21-day advance purchases. The discount tickets, which carry a cancellation penalty, are good for travel between Jan. 6 and June 4. A few routes are not included under the promotion.

"Our new fares make travel affordable for more people and provide a solid alternative to flying," Greyhound president Frank J. Schmieder said in a statement. A similar offer last January brought in $15 million in added revenue in the first quarter alone.

In addition to its new discounts, Greyhound also is extending its unrestricted $99 holiday fares to Jan. 8.

Greyhound is the only nationwide bus company, with a fleet of 2,300 coaches that will carry an estimated 15.5 million passengers this year. But it faces stiff competition from various regional carriers on short hauls and price cutting airlines on longer routes. The company estimates the summer air fare wars cost it about $25 million in lost revenue and led to a 5 percent reduction in passenger traffic, according to spokesman Bill Kula.

Mr. Kula also said Greyhound recently has seen "a marked drop-off" in long distance travel, which the company hopes will pick up with the new fares.

Many Greyhound rivals have complained that the company has been too aggressive. In some cities, competitors who lease space at Greyhound-owned bus terminals face rent increases that they claim will drive them out of business. The carrier is also competing head-on with former partners who used to carry Greyhound passengers.

Greyhound says the rent increases -- the first in five years -- were necessary to cover rising operating expenses and keep fares low.

"We don't have to subsidize the cost of other regional carriers," Mr. Kula said.

One carrier in Texas has filed an antitrust suit against Greyhound, said Stephen G. Sprague, vice president of the United Bus Owners of America, a Washington-based trade group.

"They have chose to go it alone in a lot of circumstances," said Mr. Sprague, who said that Greyhound has dropped out of his and other trade groups.

In Massachusetts, the Peter Pan bus line sued Greyhound, complaining of breach of contract and unfair business practices.

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