Greyhound Lines, Inc., a subsidiary of Laidlaw International, Inc. (NYSE: LI) today announced a new route structure and schedule product in the Northern region of the United States effective August 18, 2004. Making these changes will allow us to preserve the system and service in the region. This is the first step in a network transformation that will be carried out in phases over the next two to three years.
The network will become more efficient, serving areas where customer demand is greatest through a smaller, simpler network of routes that is short- and medium-haul focused. And at the same time we will continue to provide affordable service to long-haul passengers. In the simplified network, unprofitable and marginally profitable routes and schedules will be eliminated.
Customers will experience improved convenience, faster service, fewer stops and improved on-time departures and arrivals. These changes ensure that we maintain a safe, enjoyable and affordable travel experience.
In the past two decades, Greyhound has not had sufficient profitability to fund its operating and capital investment requirements to be a viable company. Beginning in the summer of 2001, Greyhound passenger levels declined along with revenues. With the terror attacks of September 11, 2001, this revenue and passenger decline accelerated and created an additional burden for the company in the form of unprecedented cost increases for insurance and security.
In response, beginning in the summer of 2003, we acted aggressively to stabilize the company. We changed our pricing strategy, particularly for long-haul service, and began eliminating unprofitable and marginally profitable routes. This also included reducing jobs, capital expenditures and overhead costs. Streamlining the network will make Greyhound a financially viable business in the long term, increase profitability and improve return on assets.