Faced with mounting domestic competition in Canada, Greyhound started an airline to compete
Greyhound Airlines is one of those unique footnotes in North American aviation but it’s an interesting story in Canadian business competition. Back in the mid-1990s, the Canadian aviation market was growing. Upstarts like WestJet and Royal were competing with established brands like Canada 3000, Canadian, Air Canada, and AirTransat for leisure business. New markets that were previously only served by buses and charters began to be connected through new service.
At the time, Greyhound was already a well established bus service in Canada. They saw the market trends and began to feel that their established service was at risk. So they had an idea.
Greyhound said, “What if we started an airline?”
Like most rational businesses, they sought to use their established name and strengths to be a differentiator in the market. In this case, the existing passenger bus network was seen as a potential advantage because they could connect certain cities via both air and ground and speed overall travel for customers. In theory, a passenger could begin their travel at a small town, travel via bus to the nearest city with air service, then travel via air to their final destination. The busses would act as ‘connector’ or ‘express’ service, not unlike American Airlines recently started bus service in the Northeast US.
Greyhound Air began service with a ‘hub’ out of Winnipeg, Canada with service to Vancouver, Hamilton, Edmonton, Ottawa, amongst other cities. Their plan was unique, but their execution was all the more interesting. Greyhound did not have an airline certificate. So they partnered with the cargo airline Kelowna Flightcraft and leased a total of 7 Boeing 727-200s to expedite the start of their service.
Canada has a rule that you can only display the operator’s name on the side of an airliner. In Greyhound’s case, they were not the operator so they couldn’t put “Greyhound Air” titles on the aircraft. The management team came up with a creative solution. They knew that the greyhound logo was already one of the most recognizable logos. So they outfitted the tails of their 727 with a large Greyhound logo and put their 1-800 reservation number on the side of the jet as the title.
Greyhound Air had some creative marketing too
The airline drummed up support with a series of commercials depicting that the new airline was ‘marking its territory.’ The airline featured print and TV ads with a greyhound peeing on the nose gear of a Boeing 727. It definitely generated discussion.
Greyhound service was standard low-frills
Greyhound Air wasn’t a bad airline. Service was standard low-frills for its time with free non-alcoholic drinks and complimentary snacks but no meal service. The cabin was all coach class. No frills, but not quite as tight as what RyanAir and Frontier offer today.
The airline only offered ticket sales via the 1-800 number and through the internet. They eschewed travel agents and other common sales channels of the time. While definitely forward thinking, Greyhound missed out on a significant portion of the population that was still used to booking travel through an intermediary.
Greyhound was sent to the pound
Greyhound Air’s value proposition of connecting air travelers to bus service proved more difficult than anticipated. The combination of traffic on the roads, delays in the air led to cancelled and mismatched itineraries that resulted in a less than stellar operation. Additionally, Greyhound’s parent company was sold to Laidlaw, a large ground transportation company. The new owners didn’t see the long term value of the airline and wasn’t too keen on supporting the airline until it become a profitable venture. Greyhound Air only survived a little over a year.
