Operations

Texas Operation Jumps On The FlixBus

Jim Luff
Posted on April 30, 2019

Franchisees such as Johnston are responsible for the daily running of their assigned routes. FlixBus handles the administrative side of business such as permits, network expansion, marketing, and pricing.

Franchisees such as Johnston are responsible for the daily running of their assigned routes. FlixBus handles the administrative side of business such as permits, network expansion, marketing, and pricing.

DALLAS — Operator Matthew Johnston has always been a leader and visionary since the day he launched his Dallas-based limousine service, AJL International, in 1995.

It should be noted the launch of his business took place just three years after graduating from Southwest High School class of 1992. Johnston built a network of affiliates to provide service for some of the hottest entertainment acts in the world as they traveled on concert tours. He didn’t just book the rides; he traveled the world with the stars and honed his skills as well as schooled many operators on the art of delivering exceptional and flawless service.

Johnston is again showing his growth vision by joining the FlixBus network, a new style of travel highly popular with Millennials.

What Is Flix?

FlixBus is a German company that began providing intercity bus service in Europe in 2013. They expanded to the U.S. in 2018 and are aggressively growing their routes by adding affiliates such as AJL International to serve as franchise business partners.

Franchisees such as Johnston are responsible for the daily running of their assigned routes. FlixBus handles the administrative side of business such as permits, network expansion, marketing, and pricing.

Pricing differs compared to what Dallas-based Greyhound charges for transportation. Because the company uses dynamic pricing similar to how TNCs implement surge pricing, the rates for any given Flix trip can range from as low as $2.99 up to $29.99.

Rates are determined by time of day, number of passengers on a particular trip, and how far in advance a passenger books a trip. Either way, the trip is a bargain. Buses are equipped with important amenities such as free Wi-Fi and power outlets — musts for Millennial travelers. Much like the airline industry, Flix can be super cheap if you book well in advance and the same trip will cost more if you book the same day.

Matthew Johnston, President of AJL International, (L) and general manager Jay Bowers. (photos courtesy of AJL)

Matthew Johnston, President of AJL International, (L) and general manager Jay Bowers. (photos courtesy of AJL)

The Back Story

Operators always want to know how to land contracts and opportunities. In this case, Johnston read a story LCT Magazine published last May about Flix. This prompted him to reach out and he learned Flix was looking for a partner in the Dallas area.

Flix’s plan was to launch 25 to 30 buses within his region, so the inquiry rapidly accelerated into in-person discussions at the United Motorcoach Association’s annual trade show. They talked about how AJL could get onboard during the initial launch in Dallas.

Flix implemented agreements with Johnston as well as Dallas-based Wynne Transportation to operate multiple fixed routes. Many other Dallas ground transportation operators were offered routes as well, but took a pass.

Eric Devlin, CEO of Premier Transportation in Dallas, said he was informed by Flix representatives he could sustain some losses during the initial start-up phase as Texas is a new market for FlixBus. While Johnston believes the decision to join the Flix network was a “heavy roll of the dice,” he also believes the company has a solid marketing plan that includes sending marketing teams out to handle launch publicity, local media coverage, and official ribbon cutting ceremonies. He says Flix also has a team of people in Los Angeles aggressively managing social media promotions and exposure. “To me, it looks like there is a lot of cash in it,” he says.

Not New to Buses

AJL International entered the motorcoach business four years ago. While Johnston has succeeded in landing school and church charters, he wanted to expand to line runs for consistency of income, driver scheduling, vehicle maintenance, and other operational issues.

Johnston does not recommend a single bus operator embark in such a venture of running a line route six days a week. Johnston believes Flix is about to give Greyhound and Megabus a serious run for its money based on this new business model that sells seats for as low as $1 and based on their huge success in Europe in their short six year history.

FlixBus will consider operators for a line route who own buses less than five years old and meet the standards. You must also agree to have your bus wrapped by Flix.

FlixBus will consider operators for a line route who own buses less than five years old and meet the standards. You must also agree to have your bus wrapped by Flix.

Joining Flix

The requirement for joining Flix is based on an operator’s ability to secure or provide equipment. Buses need to be less than five years old, and offer wheelchair or handicap accessibility and a restroom. Flix and Johnston worked together to create a contract that could be used as collateral for financing brand new buses. Johnston bought four Volvo 9700 buses devoted to the line routes.

Operators who already own buses less than five years old and meet the standards will be considered for a line route. There are no strict financial or credit line requirements. You must also agree to have your bus wrapped by Flix. Buses do not need a minimum of seats, but Flix prefers you have 50-56 seats.

Purchasing Buses

A new bus sufficient for Flix requirements will cost $450,000 to $475,000. You can expect monthly payments of about $7,500 a month. Johnston estimates he will average 200,000 miles a year per coach, and he selected the Volvo 9700 specifically based upon average miles per gallon.

“After researching it, we found Volvo buses get up to two more miles per gallon than MCI, Van Hool, and Prevost buses. This has a potential cost savings of nearly 7,000 gallons of fuel over the course of a year. Johnston operates two 650-miles-per-trip routes and two 548 miles-per-trip routes.

Flix Brings Technology

It seems only fitting FlixBus would deliver great technology. Its booking app is just the start. They also add the Wi-Fi entertainment system and safety electronics that verbally alerts the driver if he begins to doze off or takes his hands off the steering wheel. This is a system Johnston says he may implement in the rest of his fleet. The app-based technology company includes a tipping option so passengers on any given trip can tip their driver using the app. The gratuity goes directly into the driver’s bank account, assuming he provided his bank routing information to Flix, which handles the transactions seamlessly.

About The Money

Unlike traditional bus charter contracts, FlixBus operates on a revenue share model with bus partners, where the operator takes home most passenger revenue. This ensures both parties are aligned in delivering the best quality service to customers so ridership and revenue increase accordingly.

Never before have bus operators been able to easily enter the line run business and share in the revenue from this large market without having to spend money and manpower for route planning, marketing, and pricing. The fact luxury ground transportation operators joining Flix already have a high focus on service quality makes them ideal partners for FlixBus.

While Flix and Johnston declined to share the per mileage rate, LCT has heard from other sources the mileage rates can soar during peak ride days such as three-day weekends and holiday seasons. These are time periods that usually idle most luxury transportation companies. Drivers assigned to line routes always know what their weekly incomes and hours will be, unlike chauffeurs who may work sporadic early morning and late night shifts with no way to accurately predict income.

Other Considerations

Flix allows its partners plenty of room to grow by offering first right of refusal on new routes within an operator’s service area. Johnston also took an overnight run to Biloxi, Miss., and notes all overnight runs must have two drivers for safety purposes who are both paid. This requirement is not due to DOT hours of service rules, but for added safety as the two drivers trade off at each stop. Flix also provides uniforms for all drivers at its expense.

Future Growth

The future looks bright for Flix. As an app-based technology company, the growth resembles that of the quick explosion of TNCs with service in almost every city in America. Flix can bank on rapid growth without the capital investment headaches by building a backbone network of independent operators. It’s not likely you will see terminals like Greyhound operates, but rather public places and facilities like shopping malls serving as the boarding point. Passengers are likely to be a younger crowd that embraces technology and the use of phone-based apps.

Related Topics: commuter services, Dallas operators, FlixBus, line runs, motorcoach operators, motorcoaches, Texas operators

Jim Luff Contributing Editor
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