On Boston-NYC bus run, $80 seat can be 'low cost'

Operator's peak pricing breaks bargain strategy on hotly contested route

Megabus, whose original Boston-New York fare topped out at $14, now charges $80 for some seats. (John Tlumacki/Globe Staff/FILE 2008)

How expensive can a bus ticket be and still be considered cheap?

Low-cost bus operator Megabus entered the ultracompetitive Boston-New York market this year by offering free wireless Internet access and fares between $1 and $14. Now, the carrier is selling some seats for as much as $80 for a one-way trip - more than it can cost to take the train from the Hub to Manhattan.

Megabus declined to say how many seats it offers at each price, but a recent online search for tickets showed fares ranging from $40 to $80 for the popular Friday bus that departs South Station at 3:30 p.m.

" 'Low cost' is a relative term," said Don Car michael, senior vice president of operations for Coach USA, which runs Megabus. "We wouldn't be putting anything into the marketplace that's not selling."

This is the latest twist in the bus wars along the Boston-New York route, which was shaken up this spring when Megabus and BoltBus entered the market, offering free Wi-Fi. Both carriers undercut cheap-ticket rivals Fung Wah Bus Transportation Inc., Lucky Star, and a joint service operated by Greyhound Lines Inc. and Peter Pan Bus Lines, by offering at least one seat on each bus for $1. And while other carriers were charging $15 to $57 one way, the new entrants capped one-way fares: Megabus at $14 and BoltBus at $20.

Now, both companies are charging more, although BoltBus hasn't raised its fares as dramatically. BoltBus now sells some seats for $23 during some peak times. "Ticket prices fluctuate on fuel cost or demand or a number of things," said BoltBus spokeswoman Kim Plaskett.

While the price hikes are a break from the bargain-based pricing strategy the carriers began with, in most cases, it's still cheaper to ride Megabus or BoltBus than to fly or take a train. A one-way ticket on an Amtrak train or a commuter plane flown by US Airways or Delta Air Lines Inc. can cost as little as $62 to upward of $350.

But analysts say the higher bus fares suggest that the new entrants are popular. Indeed, BoltBus, which says it is profitable, carried a total of 130,000 passengers between Boston and New York in its first six months, Plaskett said. Megabus declined to give ridership data.

Meanwhile, Greyhound said it carried 95,744 fewer passengers from Boston to New York during that period, a 17.6 percent drop compared to the same period in 2007, said spokesman Eric Wesley. The carrier did not immediately have numbers available for passengers traveling from New York to Boston.

Fung Wah declined to comment, and Lucky Star did not return calls seeking comment.

"Both BoltBus and Megabus now see they can coexist, so they're no longer in a battle for survival," said Joseph P. Schwieterman, a DePaul University professor who has studied the intercity bus business for 17 years.

Schwieterman predicts at least one of the carriers in the cluttered market will go out of business in two years. "I can't think of any time in transportation history where there was an intercity market with this many operators with such heavy-duty schedules," he said.

Nicole C. Wong can be reached at nwong@globe.com.