FlixBus suspended all U.S. routes on March 22 because of the COVID-19 pandemic, and affected riders were given vouchers valid for 12 months. Since then, the intercity bus service has turned its attention to the survival of its network of bus operators. Bus & Motorcoach News interviewed FlixBus Regional Operations Manager Roni Alvandi and Head of Business Development Michael Kahn about how the transportation giant is supporting its business partners.
How has the crisis impacted your operations and your relationship with your partner operators?
Michael Kahn: We’ve been impacted by this situation in a similar way to the rest of the industry. This has had a huge impact on travel demand across the globe. Every company is doing it differently, and FlixBus is confident that we can weather the storm and get through this. Now, we are trying to do everything we can to help our partners do the same. There’s so much coming out on a daily and weekly basis and from the various programs available. That’s where Roni and other members of our team have really dived in 100% on everything that’s coming out to make sure we understand it and, therefore, can help our partners navigate as best they can.
How are you helping your partners through this economic crisis?
Roni Alvandi: Most of my time recently was spent trying to understand the CARES Act so we can educate our partners and have them take advantage of all these programs that are available to them. By no means are we experts in this area, but we just wanted to work hard to understand what these programs are and how they can benefit our partners. We’re suggesting that they apply for both the EIDL (Economic Injury Disaster Loan) and the PPP (Payroll Protection Program) loans. Whether they want to actually take the funds, it’s up to them at that point. We recommend they consult their CPAs, business managers and attorneys, and go from there.
What kind of requests are you getting from your partners?
Michael Kahn: We’re getting two veins of questions and requests. One is what resources are available to help us weather the storm, and that’s everything we just talked about in terms of government programs they can apply for. The second piece is when are we going to get back to running buses? I wish I had a crystal ball. The challenge is that no one really knows. We’re in the same boat as everyone else in terms of just watching daily reports about what the state and federal government is saying about stay-at-home orders and travel bans, so we will know when to restart our service. We’ll likely start to do a regional rebuild, so we’ll be adding more service in areas we feel like there will be demand and, importantly, where it is safe to operate for passengers and drivers. It really will depend on region by region, and how this whole thing progresses, which is a really tough question to answer.
What advice are you giving your partners?
Roni Alvandi: We’re all dealing with this unprecedented situation. Normally in an economic downturn, a FlixBus partnership really is an unbelievable piece of business to have — unlike charter and tour business, which can be very up and down with the economy.
As things get more negative in a normal economic downturn, more people move to using buses for inter-city travel, so it’s a great way to protect our partner businesses. Unfortunately, no one could have expected this, where every aspect of travel was shut down. A lot of our partners see the value of having that long-term guaranteed revenue in the normal course of business. Obviously, right now, we’re going through something that’s beyond what any of us would have imagined.
What assistance are you offering to operators in terms of help with applying for stimulus aid?
Roni Alvandi: Across the board, we’re just trying to help our partners navigate through the various stimulus programs to figure out what’s best for them. We’re trying to help provide information and answer as many questions as we can. We can’t fill out the application for them. But if there’s any question that we can answer, we do that. Thankfully, the applications for both the EIDL and the PPP aren’t too tough to get through. We are doing weekly outreach to all our partners, just to check in and give them updates from the regulatory side about available stimulus funds. We also have a very large European business, which is the core of the FlixBus business. Those countries are going through the same thing, but are a couple of weeks ahead of where the USA is on the trajectory of the virus. We have a couple of countries where we anticipate re-launching service sooner than the U.S. but nothing has been set in stone. We’re at least able to see how Europe is progressing and then transfer that knowledge to our U.S. partners.
How do you think this crisis will impact the FlixBus model in the short and long term?
Michael Kahn: I don’t think it affects the model too much. This is really the best way to deliver the type of service that we offer because FlixBus is able to focus on all the things that we are best at, which is the marketing, pricing, customer service, and tech. The operators really are able to enter this line-run business without having to add all that additional capability. They can continue to run the part of the business they are best at, the nuts and bolts of the operation, maintenance and drivers. It’s a win-win where we leverage expertise from both sides of the partnership. The model really is the best way to deliver this product. Obviously, the entire industry sort of gets thrown a curveball when something affects all travel, it hits us hard. So I really don’t see much of the model changing. This is a resilient industry that can get through this. It’s just going to be a challenge in the short term.
Has FlixBus incurred any difficulties in paying operators? If no, do they anticipate any?
Michael Kahn: The No. 1 priority for us is making sure the partners are able to keep the lights on and keep things going. Given the relationships we have with our operators, we want to protect them and do everything we can to support them. FlixBus, as a whole, is a very resilient business.
Many motorcoach companies are finding it difficult to drive considering the exposure to the virus. Is FlixBus offering additional driver compensation for added exposure?
Roni Alvandi: We don’t actually employ the drivers, so compensation is up to the operators. We are in the process of evaluating a number of our operational procedures across the network. As we look ahead to relaunch our network, we are looking at ways to reduce exposure for drivers such as selling fewer tickets to encourage social distancing on the bus. Maybe we don’t have a full 56-passenger bus being filled up all the way. And we are also looking at having a barrier between the driver and the passengers in the coach itself. We haven’t come to final decisions yet.
Is FlixBus using a particular method to clean buses to reduce exposure for drivers and passengers?
Roni Alvandi: We’re thinking through every potential option and then evaluating the feasibility, cost and effectiveness. We’re working through that list during this downtime. No decisions have been made yet. We just want to make sure we’re exploring all the different options of how we get back into action in a safe way. We were pretty ahead of the curve at the end of February when we implemented an enhanced cleaning process. We were focusing on areas of coaches that were highly touchable, such as AC vents, lights, overhead compartment doors and railings. We encouraged all of our bus partners to have hand sanitizer available for the drivers and passengers, along with antiviral disinfectant wipes. We also are evaluating new chemicals approved by the FDA that will kill viruses.