Saturday 23 October 2021
Flixbus boss on expansion
“First I have to learn a lot about greyhounds”
Flixmobility is already the largest provider in Germany. Now the travel platform is also expanding its market power in the USA. In an interview, founder Schwämmlein tells what he is hoping for from the expansion, to what extent the markets differ and whether there is a change in strategy behind the purchase.
What does the Greyhound purchase mean for Flixmobility’s expansion in the US market?
André Schwämmlein: That is a giant step for us. With the purchase, the US network is now roughly the same size as our European network. We drive to around 2500 destinations on both continents. We are no longer just a European company, but a global one with two similarly sized businesses in Europe and the USA.
The markets in Europe and the USA are different. The USA is a classic aircraft country – where do you see the potential for this step?
We started in the USA in 2018 and we can see that we were able to open up new markets for the bus in the network. We are very much focused on routes like New York – Washington, New York – Boston or LA – Las Vegas. Greyhound, on the other hand, has a very diverse network that is spread all over the country. That complements each other perfectly. We see very, very many synergies there and believe that we can now make an even better offer.
Greyhound’s offer was used less and less.
We offer a completely different technology, we work very strongly data-driven, i.e. customer-oriented. We will soon be able to apply this to the Greyhound network as well. And we are sure that much more is possible in the market. In addition, we now have a celebrity under our roof with the Greyhound brand.
What do you mean?
Everyone in the US knows Greyhound and most customers rate the brand very positively. If you drive the bus, you think Greyhound is good. And we also see that with Flixbus we can convince people of long-distance buses, for which the bus was often not an option before. We believe that these can be combined very well and see this as an opportunity to bring the market back to growth. I think we can convince people to leave the car.
Do you prefer the middle distance or the long distance?
We can now offer the complete spectrum and use the 2500 stops that Greyhound has for ourselves. There are just so many regions and small towns, so the bus is still the only way to travel. We built it in a similar way in Europe. In many – often smaller – cities, we are the only option to use long-distance transport.
So far, Greyhound has tended to address people who have to watch out for money – for Flixbus this only applies to a limited extent. What should that look like in the US market?
That will certainly be a big task that we have to solve so that the market can grow again and we reverse the negative trend in terms of the development of passengers and sales at Greyhound – also due to the pandemic. But that also worked in Europe. Ten years ago nobody could imagine using buses. Now it has become completely normal. A student who has never ridden a Flixbus? There hardly exist any more. And five years ago no University of California student took the bus to Las Vegas to party.
How do you intend to forge the two companies with two different cultures together?
Today is day one. First of all, we have to learn a lot about greyhounds. Greyhound has a history of more than 100 years in which the company has seen and achieved a great deal. People work here who not only do the job with a lot of passion, they also kept the company going against the adversities of a pandemic. There are no detailed plans yet for how we will bring this together. What is certain, however, is that we bring the technology with us so that Greyhound can now take the step into the 21st century.
Is there a strategy change behind the purchase – towards financially more heavily burdened assets?
We see this as an opportunity to turn a market. If we have the chance to buy a historical player and that makes sense to us, then there is nothing to be said against growing through acquisitions. In other countries, such as the UK or Portugal, we tend to pursue a strategy of organic growth. But when we do a takeover like this, we have to be convinced that it will bring something that will help the company.
Some see the purchase as a step in preparing for an IPO. Is that correct?
Basically, we are well financed to begin with, as we have just finished a financing round. We therefore have no pressure to seek private or public funding. But we also always tried to build a strong company, we never looked to see if we might want to sell. An IPO is therefore always an option that has to be discussed at some point. But there are currently no concrete plans.
Bastian Hose spoke to André Schwämmlein
This interview is at first Capital.de appeared.