November 8, 2017 / 11:00 AM / a year ago

Germany's FlixBus to take on Greyhound in the United States

FRANKFURT, Nov 8 (Reuters) - German long-distance bus firm FlixBus plans to expand to the United States next year, taking on rivals such as Greyhound and Megabus from a base in Los Angeles, it said on Wednesday.

"There is a significant shift in the American transport market at the moment. Public transportation and sustainable travel is becoming more important," FlixBus founder and manager Andre Schwaemmlein said in a statement.

FlixBus became a major player on European long-distance routes after Germany liberalised the market for inter-city bus services in 2013.

It survived a fierce price war among new market entrants to boost its market share in Germany to more than 90 percent, making its bright green coaches a common sight on German motorways. It does not own any of the buses but rather works with local and regional partners.

In the United States, it would compete with companies such as Megabus, operated by Britain's Stagecoach Group, which launched in the United States in 2006, and the famous Greyhound bus line.

Greyhound, founded in 1914 and now owned by Britain's FirstGroup PLC, transports around 18 million passengers a year in a fleet of around 1,700 vehicles.

FlixBus said it had already sent a small team to Los Angeles to start setting up a base for its U.S. business, though it was not yet clear when and on which routes it would start its bus service there.

It may face an uphill battle in the United States, though. A recent study showed that cheap gasoline is squeezing U.S. bus companies and the Amtrak passenger rail system.

Passenger numbers and revenue on Amtrak and bus services, such as Megabus and BoltBus, have declined since 2015, roughly tracking a fall in U.S. gasoline prices, according to data compiled by the Chaddick Institute researchers. (Reporting by Maria Sheahan, editing by Louise Heavens)

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