(WJET/WFXP) — Bus company Coach USA announced Tuesday that it plans to sell its assets and has filed for Chapter 11 bankruptcy.
Coach USA operates under several brands, including Megabus, Coach Canada, Dilon's Bus Company, Coach USA Airport Express and Go Can Galder. Coach USA's approximately 2,070 buses carry millions of passengers through North America every year.
According to court documents, the company currently holds $100 - $500 million in assets while holding approximately $200 million in liabilities.
The company announced the filing in a press release, stating many different factors that led up to the filing and sale. One of these reasons was the COVID-19 pandemic, which has been a leading factor in recent bankruptcies, including Sam Ash Music and Rue21. During the pandemic, the company frequently had to cease operations due to lockdowns and other regulatory requirements.
Following the pandemic, the company saw ridership and demand in the industry remaining well below pre-pandemic levels. In 2020, ridership declined to 90% compared to pre-pandemic levels. Ridership has still not recovered; in 2023 ridership is only 45% of pre-pandemic levels. The drop in ridership caused the company's operating revenue to drop by 60% in 2020 and has seen a slow rebound in recent years, rising to 58% of pre-pandemic levels in 2023. However, this rebound met face-to-face with rising costs of fuel, insurance and labor.
Coach USA entered a purchase agreement for certain bus lines with three companies, The Renco Group, Inc., Bus Company Holdings US, LLC, and AVALON Transportation, LLC.
This decision was made after a review of the current options to approach the decline. In the end, the decision to initiate a court-supervised sale would maximize the value of its assets while "providing the best path forwards for its people, communities and customers."
As we move through this process, our top priority remains safely carrying the millions of passengers who choose our buses each year and working closely with our valued contract customers and transportation agency partners. We appreciate the dedication of our employees to operating with safety as a priority and serving our customers and our communities.
Derrick Waters, Chief Executive Officer of Coach USA
The company will continue to operate as normal in both the US and Canada during the sale. Operations will be supported by a $20 million commitment for debtor-in-possession financing. This new funding, combined with operational revenue, will allow the company to maintain its normal operations. The company also said it intends to pay vendors and suppliers in full.
Once completed, the company hopes the actions will preserve thousands of jobs all while maintaining an uninterrupted passenger transportation service to its millions of customers.
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