Intercity Bus Line Fares

Wed Jul 03, 2002 3:01 am

I've noticed that intercity bus lines like Greyhound tend to base their fares by number of miles traveled. For example, a trip to a city 100 miles away will cost about twice as much to a city 50 miles away. One could save by buying an advance-purchase ticket, but the off-peak times seem to be priced the same as during peak periods.

Fair enough if it works for them. But would they be more competitive with the car and low-cost airlines if they adopted some form of yield management? For instance, prices would better reflect supply and demand if tweaked according to the percentage of available seat miles available between any two places. It could also improve yields on city-pairs that sell out and increase traffic on streches of highway or at times of day when buses are empty.

Given that the buses were providing low-cost, no-frills transportation long before the discount airlines came along, why haven't they taken up more of the airlines' pricing strategies?
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RE: Intercity Bus Line Fares

Wed Jul 03, 2002 3:34 am

One complicating factor is that some states subsidize certain intercity bus fares. I believe this is more common in rural areas, especially those far from commercial airports.
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RE: Intercity Bus Line Fares

Wed Jul 03, 2002 5:57 am

The intercity bus lines do have a lot to learn from the airline industry. Although in most of the US, the only bus lines are members of the trailways group and Greyhound. And many of the destinations are served by no other scheduled carrier.

I don't know if yield management would work quite the same way for the bus lines either, because if the last minute fares were too high the potential customer would just drive their own car to the destination. Airlines can get away with it because their mode of transportation isn't as comparable to an automobile.
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RE: Intercity Bus Line Fares

Thu Jul 04, 2002 12:30 pm

The intercity bus market caters primarily to people who have no other travel options, and not much money. The way yield management works is if the market is segmented, and you can differentiate between different types of clients. I don't think that is the case with bus passengers.

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