(WJET/WFXP) — Bus company Coach USA announced plans to sell its assets Tuesday and filed for Chapter 11 bankruptcy protection.
Coach USA operates under several brands, including Megabus, Coach Canada, Dillon’s Bus Company, Coach USA Airport Express and Go Can Galder. Coach USA’s fleet of approximately 2,070 buses carries millions of passengers across North America each year.
The company currently has assets of between $100 million and $500 million, but liabilities of about $200 million, according to court documents.
The company announced the filing in a press release, citing a variety of factors that led to the filing and sale. One of these reasons was the COVID-19 pandemic, which has been a major factor in recent bankruptcies, such as Sam Ash Music and Lu21. During the pandemic, the company has had to frequently shut down operations due to lockdowns and other regulatory requirements.
Following the pandemic, the company recognized that industry passenger numbers and demand remained well below pre-pandemic levels. Passenger numbers in 2020 were down 90% compared to pre-pandemic levels. Passenger numbers have yet to recover, with passenger numbers expected to be just 45% of pre-pandemic levels in 2023. Due to the decline in passenger numbers, the company’s operating revenues fell 60% in 2020 and have recovered slowly in recent years, rising to 58% of pre-pandemic levels in 2023. However, this recovery was faced with rising fuel, insurance and labor costs.
Coach USA has entered into agreements to purchase certain bus routes with three companies: The Renco Group, Inc., Bus Company Holdings US, LLC and AVALON Transportation, LLC.
The decision was made after reviewing current options to address the decline. Ultimately, the decision to initiate a court-supervised sale would maximize asset value while “providing the best path forward for our employees, community and customers.”
As we navigate this process, our number one priority remains safely transporting 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 keeping safety their number one priority and serving our customers and communities.
Derrick Waters, CEO of Coach USA
The company will continue to operate as usual in both the United States and Canada during the sale. Operations will be supported by a $20 million commitment for debtor-in-possession financing. This new capital and operating revenues will enable the company to maintain normal operations. The company also stated that it intends to pay its vendors and suppliers in full.
The company expects that once completed, the move will enable it to maintain uninterrupted passenger service to millions of customers while preserving thousands of jobs.
