REFLECTION: 90s Greyhound

By: Gordon Lowe


In this series on Greyhound’s halcyon days as a private company, ABC reports on words of wisdom

REFLECTION: 90s Greyhound
Challenge of the ‘90s

This month Reflections is proud to publish in full, as a tribute to and in memory of, the late John Wadmore, his address titled ‘The future of coaching in a deregulated environment’.

Wadmore delivered the address at NATCON in Cairns on August 30, 1991. Even today, his advice is as good as ever — it gives a powerful insight into the state of play during the heady ’90s.

John Wadmore was an Executive Director with Australian Coachlines. After Greyhound’s restructure to a public company early in 1994, John went on to rebadge and rejuvenate a commuter coachline, Suncoast Pacific. He passed away several years ago.

His address is as follows: "If you are an Australian native and have resided in Australia in the last 12 months you would have to be ‘Blind Freddy’ not to know of the deregulation of the domestic airline industry in November of last year and the subsequent airline fare discounting.

"Nearly every day in the Australian press you read of one airline or another announcing some new fare initiative. You do not speak with any travel agent principal or his staff without this subject getting a mention. The discussions usually mention some of the following: ‘How long can the airline fare discounting go on?’ ‘One of them has got to go broke.’ ‘They can’t be making any money.’ ‘How low do you think the fares will go?’ and so on. We do not read or hear very much of new schedule initiatives from the airlines.

"There would probably be few in this room today who realise that prior to 1954 all road transport in Australia was regulated\ by individual state licencing. If a coach company wished to travel or operate a tour from Sydney to Melbourne it had to apply to the local authority in New South Wales for a licence to travel from Sydney to Albury and also apply to the local authority in Victoria to travel from Wodonga to Melbourne.

"Similarly, with trucks carrying freight, very seldom were these licences granted by one or the other of the authorities or both. Permits were often granted for individual tour groups, on a one-off basis and the passengers had to complete a return journey. The reasons for this state licencing was to protect the rail systems in each state.

"Most states have retained local intrastate licencing for passenger services only, however, it is not nearly as strongly enforced. There in no licence now required for freight haulage.

"In 1954 a company known as Hughes and Vale mounted a case in the High Court of Australia in which they challenged the Commonwealth and states in respect to section 92 of the Australian Constitution 1901. Section 92 states that trade and commerce between states should be absolutely free. The findings in the case were eagerly awaited and on the case being wonby Hughes and Vale we saw the freight companies begin to haul their freight interstate by road in lieu of putting it on the railways.

"At the same time we saw the late Reginald Ansett commence interstate express passenger coaching operations, originally between the southern capitals, however, gradually expanding these services until there was a daily service being provided between most Australian capitals and major towns.

"This was a major feat when you consider that Australian highways were not in the good condition they are today. The highway across the Nullarbor was still a dirt road with many bulldust holes which would easily wreck a bus suspension.

"Greyhound followed Pioneer into the express coach market with the commencement of services between Cairns and Adelaide initially. However, they also gradually extended their services until they had a network operating around Australia.

"These two companies competed in the early ’60s against each other on reasonably priced fares which provided for reasonable yields and profits.

"In the mid to late ’60s and through the ’70s we experienced a sharp increase in domestic and overseas travellers and at the same time in came new coach express companies, Redline and Panther Buslines — the airline on wheels.

"These companies commenced fare discounting to obtain marketshare. They also bribed travel agents with increased commissions, then due to low yields they gradually disappeared.

As they did, new companies appeared like VIP, Transcontinental, Intercity, Intercapital, Regal, Deluxe, Sunliner and others. All of these used the same strategy to force their way into the market by fare discounting.

"Practically all had the same demise of bankruptcy before disappearing, leaving behind stranded passengers and long lines of creditors.

"In the main, it was you, the travel agents who supported these operators by selling their services on discount fares and for high commissions and then were surprised when these companies failed; sure they had high passenger occupancy but no yield!

"They operated far too many services trying to compete against all of the other companies’ services. They did not consider that their new coaches were not going to go forever without proper maintenance.

That to obtain good coach captains you had to pay proper award wage rates and that finance companies who lent money expected to be repaid. That passengers, although they paid discounted fares, expected the best of terminals and on road services.

"In Australia today we are back to three national express coach operators — Pioneer, Greyhound and Bus Australia.

"This experience of what has happened in the express coach industry in Australia is similar to what has happened in the deregulated trans-Atlantic and American domestic airline industry, where you read regularly in either the press or travel magazines that another airline has failed or applied to the US Courts for a Chapter 11 to protect them from their creditors, while they try to get their business affairs in order.

"Who would have thought a few years ago that Pan Am, one of the first and largest world airlines would disappear.

"The experience of deregulation of the coach industry in the US has seen the two main operators Greyhound and Trailways combine together and to rationalise their routes and services. They also had to file with the Court for a Chapter 11 when they had a similar union dispute and eventual sacking of all of their coach drivers, as we experienced with our domestic airline dispute and the resignation of all airline pilots.

"Greyhound/Trailways are now back operating and profitably. As you would be aware there is no affiliation between Greyhound America and Greyhound Australia other than a common name and logo and that we represent each other’s companies in America and Australia respectively.

"It would be untrue to state that the deregulation of domestic airlines and the subsequent fare discounting has not had some effect on our company’s passenger carriage and our yield; however, it is very difficult for us to be able to convert this to actual passenger percentages or figures as this has not happened individually.

"There have been other factors which have simultaneously happened; the demise of Deluxe and the general tightening of the economy during the last quarter of the year had effects both on the debit and credit side of passengers carried.

"The bottom-line figure up until the end of July is that we are carrying each month slightly more passengers overall than we carried for similar months last year. We can, however, identify one route in particular where we have had a decline of passengers and that is across the Nullarbor between

Adelaide and Perth where in July we operated eleven services per week last year and only seven services per week this year.

"We as a company did not sit and wait to see what the effects of deregulation were going to have upon us. We have been planning and developing other markets to compensate for any changes in the patterns of passenger carriage.

"We have extended the number of packages available under our domestic Aussie Explorer programs and increased the number of duration of travel on our Aussie Passes; we have changed schedules on some of our less patronised routes so that we can rationalise services at a short notice with the minimum of interference to our passengers. We have developed a new department to handle our international marketing, selling and liaison with all major wholesalers who sell inbound into Australia. Again, this is centered around our international Aussie Explorer and Aussie Pass programs.

"We have developed a completely new international and domestic holiday program which now features set duration holidays, stop-over accommodation, and two and three-day intercity travel and accommodation packages.

"The marketing departments of both Greyhound and Pioneer are also producing special discounted holiday programs in conjunction with various accommodation establishments. They will also be developing special feature and events packages in the future.

"The company last year commenced a program of departmental investigations into effectiveness, efficiency, cost of operations and staffing levels. This program commenced at the top of the various departments and worked through all levels.

"It highlighted some areas where it was necessary to make some very significant changes so that we ended up with square pegs in square holes and round pegs in round holes, which in turn became more cost efficient.

"It was necessary to change some persons’ area of employment and to effect some retrenchments.

"The program has made our various companies and departments more lean and efficient and work to the theme of ‘increasing revenue and reducing costs’. The program is ongoing and under constant review.

"The board of the company has installed in all departments challenges to provide the very best product, service to agents and our traveling public and to provide the best in well maintained coach equipment with well-trained coach captains.

"We do believe that our company and all of our staff are prepared to meet the challenge of the airline deregulation and fare discounting and that our coach fares are in the main, still half the cost of flying for travel at scenery level.

"Our commission levels still maintain a reasonable return to travel agents on all sales made and in most instances — well in excess of commissions achievable for the sales of domestic airline tickets.

"We believe our company in the express coach industry is well prepared to meet all of the challenges that airline deregulation has to confront us with and with your agency and its staff support we can mutually prosper and isn’t that what it is really all about?"

TIMELINE:

■ Pre-1954: all road transport regulated by individual state licensing systems

■ 1954: Hughes and Vale mount High Court challenge to regulatory restrictions

■ Mid-1950s: Reginald Ansett commences interstate express passenger coach services; a move followed by Greyhound

■ Late ‘60s-early ‘70s: increase in domestic and international passengers attracts entrants such as Redline and Panther

■ ‘90s: Rationalisation sees return to three national express operators: Greyhound, Pioneer, Bus Aust

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