Greyhound to establish charter unit

The move represents one of the first major initiatives undertaken at Dallas-based Greyhound since the company was acquired by Laidlaw Inc. of Burlington, Ontario, last year.

Although Greyhound remains focused on its core bus operations, it is also seeking to boost profits by devoting more resources and attention to related areas, such as package delivery and the $15 billion market for North American charters and tours.

"Charter and tours is a huge growth business," said Gordon Barr, Greyhound's new senior vice president of charters and tours for North America.

Mr. Barr joined the company in February after serving as a top executive at Holland America Lines, a cruise ship operator based in Seattle.

Greyhound aims to increase revenue from its ch!
arter and tours business in the United States and Canada to $250 million in fiscal year 2002, up from $70 million in its latest fiscal year ended Aug. 31.

To achieve this increase, the company is planning to acquire an unspecified number of charter and tour bus companies in both the United States and Canada as well as strengthen its existing business.

In December, Greyhound purchased Hotard Coaches Inc. of New Orleans, a large tour operator in the southeastern United States, for an undisclosed amount.

Hotard has a fleet of about 83 buses.

"There are several [acquisition targets] in the pipeline right now," Mr. Barr said.

Until now, Greyhound's U.S. charter and tour operations were a sideline activity without its own dedicated fleet of buses.

As many charter customers increasingly demand specialized bus features such as expanded seat room, television sets and luggage racks, Greyhound will set up its own charter and tour bus fleet, Mr. Barr said.

However, it w!
ill continue to use some of the more than 2,600 buses in its regular f
leet.

Greyhound is also separating its charter and tour business from its core network of buses and bus stations around the country.

The new business unit will continue to be called Greyhound Travel Services and will combine U.S. and Canadian operations.

Unlike in Canada, Greyhound's U.S. charter business, which provides bus service for schools, companies, conventions, hotels and other groups, remains relatively small, with revenue last year of between $10 million and $12 million.

As part of its new emphasis on the charter and tour business, Greyhound may even wind up buying some tourist attractions that customers visit frequently, Mr. Barr said.

Holland America, for example, built a gold mine village in Alaska that appeals to its cruise ship passengers, he said.

"Greyhound will evolve itself up and down in the supply chain," he said.

"We are really in the entertainment business."