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America's largest private bus company covering 500 cities across US files for bankruptcy
The future of Megabus - the budget alterntive to Greyound - is under threat.
That is because its owner Coach USA, whch also runs other commuter bus lines in the US and Canada, has filed for bankruptcy.
Megabus, which covers 500 cities across America, is known for its tickets from $1 - and has been a competitor to the pricier, more established Greyhound.
Since launching in 2006, Megabus has served more than 50 million Americans. Manwhile, Coach USA - across its various brands that also include Dillon's Bus Company and Go Van Galder - serves 38 million people a year.
Coach CEO Derrick Waters said that buses will continue to run as normal during the company's bankruptcy.
'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,' Waters said in a statement.
Megabus became a hit for selling tickets from $1, but passenger numbers fell during the pandemic
Coach USA operates in 27 locations in the US and Canada, with 2,700 employees and 2,070 buses operating. It carries 38 million passengers a year.
The company operates several other bus brands in addition to Coach and Megabus, including Dillon's Bus Company and Go Van Galder.
Coach filed for Chapter 11 bankruptcy in Delaware late Tuesday, seeking to sell its assets and shed debt incurred in an ill-timed 2019 private equity buyout.
It the largest privately-owned bus company in the US, and was acquired by private equity firm Variant Equity Advisors for $270 million, mostly using debt that is still on the company's books.
Coach quickly ran into trouble servicing its debt, as the pandemic caused bus ridership to decline by 90 percent from 2019 to 2020, according to its bankruptcy filing.
Ridership levels have rebounded since the lows of 2020, but they were still only 45 percent of pre-pandemic levels in 2023.
Coach has faced higher interest rates and increased costs for basic needs like employee retention and fuel, it said in its court filings.
Coach entered Chapter 11 with $197.8 million in debt, including $37 million due on a pandemic relief loan under the Coronavirus Aid Relief & Economic Security (CARES) Act, and at least $134 million in other unpaid obligations, including trade debts.
Coach USA operates in 27 locations in the US and Canada, with 2,700 employees and 2,070 buses operating.
The company operates several other bus brands in addition to Coach, including Megabus, Dillon's Bus Company, and Go Van Galder.
Megabus covers more than 500 cities across America
Coach entered bankruptcy with three sale agreements in place, each of which is subject to higher and better offers. Those sale agreements cover 16 of Coach's 25 business lines, and they would preserve jobs for about 2,100 Coach employees, according to court documents.
Renco Group, a private investment company, would acquire the majority of Coach's assets in exchange for taking on $130 million of company debt and certain union contracts.
Avalon Transportation would buy bus lines in Atlanta, Georgia and Western states, as well as specialized tour bus divisions operated by Coach, for $14.8 million.
ABC Buses would buy a fleet of 143 double-decker buses for $2.3 million, according to court documents.