A DePaul University study released today warns that “cash shortfalls will make the next five or six months a tumultuous time for scheduled bus lines, particularly those with asset-intensive business models.” On the Brink: 2021 Outlook for the Intercity Bus Industry is the latest installment in DePaul’s annual review of a travel sector known for such carriers as Greyhound, Megabus and Flixbus. The study shows the industry’s problems “predate the pandemic but are being magnified by tepid demand during the public health emergency.” Joe Schwieterman, one of the study’s authors, adds that “If the network further erodes, it could leave thousands of city pairs without any scheduled intercity transportation.”
Booking Still Sluggish
On the Brink depicts a sector at a crossroads after having fared poorly compared to airlines, passenger railroads, and mass transit in recent federal bills providing financial relief to transportation industries being buffeted by the pandemic. In the Northeast region, bookings ended 2020 at only 16% of levels from the previous year, and most other regions of the country had bookings barely twice that level. Joe Schwieterman, who is a DePaul University Professor, believes the next six months could see a “downsizing event,” in which a major carrier or series of small carriers cut back and dispose of equipment.” The study notes this could affect the mobility for many travelers who cannot afford, or choose not to drive. Preventing this, baring a rapid upturn in demand, will require a more favorable set of policies to emerge from Washington.
The study also points to encouraging possibilities. One of the more important of these is a sharp turnaround expected to gather momentum in July, when summer travel kicks into gear and vaccines have become widely disseminated to all age groups. “We’re optimistic that many carriers can generate the cash and gain access to the loans and grants they need to cover the expenses until a summer recovery,” notes Schwieterman. Co-author and industry expert Brian Antolin notes that “booking activity could be back to 60 percent of pre-pandemic levels by the end of summer, compared to only 20-25% nationwide today.”
Optimism about the Biden Administration
Recent moves by the Biden Administration are also encouraging, suggesting that we could see a more forceful federal response to the industry’s financial losses. President Biden is regarded as a champion of Amtrak and is expected to push for more investments in Amtrak and public transit. This is likely to include more targeted efforts to leverage the combined strength of the bus and rail systems. That could mean funds for new or improved intermodal transportation centers, matching funds for bus routes into underserved areas, and more extensive use of buses to complement Amtrak service in corridors. The study notes that the latter strategy is proving to be effective in California, Michigan, Oregon, and other states, which have large built “Amtrak Thruway” networks made possible by state direction and investment. Such integration of rail and bus service helps stabilize the large system of bus routes supported by interline agreements that are sold on the Greyhound computer reservation system and available on Greyhound.com and through its partner carriers. “New strategies will be needed to sustain service on thinly traveled routes,” notes DePaul’s Crystal Bell, also an author of the study.
On the Brink shows that the duration of trips over this network outside of major intercity corridors has lengthened markedly over the past several years. In the last year, this was partially due to pandemic-related schedule cuts. The study evaluated more than 180 secondary routes that lack Amtrak or direct express coach service. The length of the average trip on those routes increased roughly an hour between 2016 and 2021. Much of the slowdown was due to the need to wait longer for connecting buses at transfer points and make more stops.
A one-hour webinar hosted by DePaul’s Chaddick Institute to discuss the industry’s outlook is set for Friday, February 19, 2020. To register or contact the authors’ email email@example.com. To download the study click here.