Greyhound Lines said yesterday that it will buy the operations of rival Trailways Corp., leaving a single major company in the business that once helped knit the nation's small towns and big cities together.

Greyhound Chairman Fred G. Currey said that his company has agreed to pay $80 million for Trailways' routes, 450 of its 1,200 buses and some of its terminals and garages in order to prevent a break in service that could strand areas without other types of mass transportation.

Without the sale, Currey said, Trailways was headed toward certain bankruptcy because, as a Trailways official said, "No one rode the bus."

Despite the fact that the two bus companies compete head-to-head on 98 routes between major cities, Currey said he anticipates government approval. He also said he expects the Interstate Commerce Commission to act in a matter of days to allow Greyhound to operate Trailways on a temporary basis while it considers a permanent decision.

If the merger is approved by the ICC, he said, "We wouldn't anticipate any {antitrust} objections by the Department of Justice" because the combined bus company will face substantial competition from private automobiles, smaller bus companies, Amtrak and airlines with discount fares.

The sale underscores the decline of bus transportation in the United States, a decline that has transformed buses from the basic transportation of much of middle America to an almost-forgotten system struggling to survive.

Buses' share of intercity travel has declined from a peak of 8.8 percent in World War II to 1.3 percent now. "Much as we would like to think otherwise, with 1 percent of the market, we are frankly not much of a threat to anyone," Currey said.

In the past 10 years, as intercity travel has grown 18.7 percent, bus travel has declined 11.2 percent.

Currey and a group of investors acquired Greyhound Lines earlier this year from Greyhound Corp. for $350 million. In the three months since, with the help of concessions from the bus company's 10,000 workers, the privately held company has become profitable, he said.

At the same time, Trailways -- which has approximately 3,000 workers -- was growing significantly weaker. A hoped-for turnaround never occurred, and Trailways continued to cut back."No one rode the bus. We have a very severe financial situation because of that, and that triggered the asset sale," said Tom Kissell, vice president for public relations for Trailways.

In the past 12 months, Trailways dropped all service in Connecticut, Iowa, Massachusetts, Michigan, Montana, Nebraska and Wyoming and cut service by more than 50 percent in Colorado, Nevada and West Virginia.

In all, the company has withdrawn or asked to withdraw from 23 states, according to Greyhound.

"We had two choices -- to sit back and wait for Trailways to go bankrupt, or to step in and save as many jobs and as much service as possible," Currey said. Keeping the service intact also serves Greyhound's corporate interests by preserving a nationwide network of destinations that can be reached by bus, he said.

Greyhound, which is headquartered in Dallas and operates in the 48 contiguous states, will continue to use the Trailways name in sections of the country where it is strong, Currey said, though he said 25 to 40 Trailways terminals will be closed.

He said that pending applications for abandonment of service by Trailways would be withdrawn and that service would be continued for at least a year to communities now on either company's system that have no other bus service. He also said that Greyhound will launch a program later this year to provide van service to some small towns and rural areas.

Currey, once head of Trailways when it was owned by Holiday Inns, wouldn't say how many employes might be laid off as a result of the acquisition, but he noted that Greyhound recently hired approximately 1,200 new drivers and is looking for more drivers and middle managers.

In some cities, including Washington, the two bus lines each have a terminal and frequent service to several East Coast cities. Currey said that Greyhound will move from its New York Avenue NW terminal here, which it leases, into the Trailways terminal near Union Station. Greyhound officials said they have not yet decided whether any service will continue under the Trailways name here.

As part of the transaction, Greyhound will also acquire Eagle International, a Trailways' subsidiary in Brownsville, Tex., that manufactures buses. Currey said that Greyhound will continue to purchase MCI motorbuses but will also buy some of the buses that Eagle manufactures. Greyhound will also lease some buses and facilities from Trailways as part of the transaction.

Trailways will continue to operate as a real estate and leasing entity for the time being, said the Trailways spokesman.

A shareholder group from Trailways, the Hilman Co. of Pittsburgh, has acquired an equity interest in Greyhound Lines as part of the transaction.

Sen. Jay Rockefeller (D-W.Va.) said yesterday that he is concerned about the effect that the proposed acquisition of Trailways by Greyhound might have on rural bus service. But he added, "I'm withholding judgment until I've had a chance to study the proposal in depth."

Former ICC chairman Reese Taylor noted that "bus travel has been a downhill road for the bus companies for a good long time. Maybe now with one big one, they will make some money. I suppose this should have been anticipated, and certainly in rural areas where some bus service is essential, perhaps to have one big operation that can maintain service is a good thing."