Famous international operator takes giant steps into Australian market

For all the long hours, blood, sweat and tears poured into it, sometimes the greatest asset that a business can have to succeed is fortunate timing. Being in the right place at the right time. Staying aware and pouncing on the perfect opportunity.

Nowadays, if you’ve travelled to the likes of Europe, the Americas or Asia, FlixBus is a well-known name. The green covered buses are a constant in tourist towns, completing overseas and long distance trips in holiday seasons. While the FlixBus name may now seem like a mainstay in the global tourism transport market, the German brand was only started 14 years ago, and its success all boils down to a great idea and some fortunate timing.

The year was 2009 and Daniel Krauss, Jochen Engert and André Schwämmlein had a plan. The German government had announced plans to liberalise markets, including the transport sector, resulting in the potential deregulation of the long-distance bus transport industry as part of a coalition agreement.

The idea was simple – the market, which had previously been closed, was set to open, so why not capitalise on the regulatory change and seize the opportunity?

“In 2013, the market opened in Germany, with Flix launching that year after being founded in 2011,” FlixBus senior managing director for Australia Yvan Lefranc-Morin told ABC.

“It was an opportunity to grab part of a newly created market, and we decided to enter into it with an innovative model.”

The rest was history. FlixBus, after starting with three routes in Bavaria, Germany, took advantage of the opening of the bus market to competition and soon expanded across Europe. Nowadays, it’s a global transport giant, delivering more than two billion Euros of yearly revenue and carrying more than 500 million passengers around the world since its inception.

Now, Flix has spotted a new opportunity in Australia’s bus and coach tourism market. From later this year, the familiar green of FlixBus is set to descend on the local industry to bring its unique model down under.

“Australia has been on the map for a long time as a place for international expansion,” Lefranc-Morin says.

“Then, COVID-19 came in 2020 and we had to revisit our expansion plans. The goal of coming to Australia has always been there, despite the vast size of the country and the unique challenges it provides, as it’s an appealing market.”

Having recently confirmed its launch in Australia, Flix has now settled into its first market in the Oceania and South-East Asia region. Lefranc-Morin says the FlixBus brand isn’t here to disturb the status quo and steal services from existing local operators. Instead, the global giant is bringing its own model that partners with both operators and suppliers throughout the country to encourage more passengers to take the bus around the nation.

“Flix is a tech-driven company and a business that is digital in its nature,” Lefranc-Morin says.

“Our idea was to concede that we haven’t been operating buses forever and don’t have huge experience in how to do it, but what we do have is an idea on how technology can be built to make long-distance bus services successful in this industry.

“We decided early on to partner with local bus operators in the regions that we work in to combine their deep knowledge on managing daily operations with our expertise in using smart and efficient technology to design networks, attract customers and provide a seamless booking experience.”

While in some markets, FlixBus is a bus operator, its predominant model is to handle the network planning, marketing, pricing and customer service on behalf of bus operators and take a commission from the ticket sales. This alleviates the pressure of marketing bus services for operators, giving them more time to focus on what they do best – manage high quality and safe long-distance runs.

“We know how to attract customers and handle booking systems in a competitive market,” Lefranc-Morin says.

“Our idea is to bring the best of both worlds together, mixing operators with our big data driven technology to attract customers in the best and most efficient way.”

If there’s any sceptics in Australia, they need only to look at Flix’s incredible expansion story around the world. After launching in Germany 12 years ago, FlixBus now operates in mainland Europe, the US, Brazil, Chile, Canada, India and Mexico. Following initial success in Germany, Flix was next seen in France and Italy in 2015, before expanding to the US, courtesy of a base in Los Angeles, in 2018. A year later, the familiar green of Flix could be seen on the US’ East Coast courtesy of a partnership with Eastern Bus, before the South American push started in 2021.

Nowadays, out of the 81 million annual passengers it recorded in 2023, 55 million were in Europe while 14 million came from Turkey and 12 million passengers used FlixBus services in North America.

“We very quickly decided to launch into other European countries, seeing Europe as a unified network where we could invest in technology to gain efficiencies,” Lefranc-Morin says.

“Everywhere we’ve expanded to we’ve used the same model, resulting in our international expansion recently. Our most recent expansion before Australia was in India last year and Mexico this year.”

While this blanket model has seen success in all major jurisdictions Flix has expanded to, Lefranc-Morin and the Flix team are aware that Australia is a unique market. While the aim is to use its existing model to allow the local tourist transport sector to thrive, Lefranc-Morin is ready to learn from the industry and apply this knowledge to the FlixBus way.

“We know that the Australian market has existed for decades and is different from when we entered into a newly created sector in Germany, so we’ll adjust our method to this,” he says.

“As our first market in the Oceania and South-East Asia region, we are hoping this becomes our next big growth sector. We aim to grow this market and bring our technology to create more options for travel for both Australians and tourists.

“We’re already in 44 markets globally, so we know we can bring more options to the competitive landscape and make customers’ lives easier.”

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Having now established his team and himself in Sydney, Lefranc-Morin has started talking with local operators on specific lines with the aim of establishing partnerships. From there, he will apply the Flix model to provide leading ticketing offers and marketing for services ahead of the upcoming summer period.

“We now have good experience in designing a network, with Flix using our technology and data analysis to know where the demand will be and what our customers in Australia will expect from bus services,” he says.

“This is where we start – analysing our data on systems, then designing a network that’s as efficient as possible to meet our customers’ needs. Then we will see how we can build an effective network.

“We have been doing this globally and so far we have learnt a lot and are learning every day on how to optimise the network and see what we can do in Australia to replicate our success in other markets.”

Lefranc-Morin says FlixBus has already signed with its first bus operator partners in the local market, while he’s in “very good talks” with multiple other interested operators. He encourages all bus companies to reach out and understand how the Flix model works.

“The aim will be to launch our first lines in the Australian summer – there’s no precise dates yet but we’ll be ready for the high season in December,” he says.

“We are telling long-distance operators that a partnership with us means they don’t have to take care of everything, we can develop the costly technology and use our experience and knowledge to market their services and provide booking systems.”

Having carried more than 500 million passengers since its inception and reached more than 6,800 destinations to date, Lefranc-Morin is excited about what Australia has in store for the global powerhouse that is Flix.

“Our aim is to continue being number one, like what we are in most countries that we operate in,” he says.

“The first step is to launch in Australia with a proper network, determine how the offer is perceived and then expand around Australia.

“We want to bring another travel option to Australia through sustainable and user friendly solutions and grow Australian bus businesses – the more options that we can provide then the bigger the cake there is for the industry to enjoy.”