America’s largest private bus company covering 500 cities across US files for bankruptcy
The future of Megabus – the budget alternative to Greyound – is under threat.
That’s because owner Coach USA, which also operates other shuttle bus lines in the US and Canada, has filed for bankruptcy.
Megabus, which covers 500 cities across America, is known for its tickets starting at $1 – and is a competitor to the more expensive, more established Greyhound.
Since its launch in 2006, Megabus has served more than 50 million Americans. Meanwhile, Coach USA – through its various brands, which also include Dillon’s Bus Company and Go Van Galder – serves 38 million people per year.
Coach CEO Derrick Waters said the buses will continue to operate normally during the company’s bankruptcy.
“Our top 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,” Waters said in a statement.
Megabus became a hit by selling tickets from $1, but ridership fell during the pandemic
Coach USA operates 27 locations in the US and Canada, with 2,700 employees and 2,070 buses. It carries 38 million passengers per year.
In addition to Coach and Megabus, the company operates several other bus brands, including Dillon’s Bus Company and Go Van Galder.
Coach filed for bankruptcy in Delaware late Tuesday, in an effort to sell its assets and pay off debts incurred in an ill-timed private equity buyout in 2019.
It is the largest privately held bus company in the US and was acquired by private equity firm Variant Equity Advisors for $270 million, largely with the help of debt still on the company’s books.
Coach quickly ran into trouble servicing its debts as the pandemic caused bus ridership to drop 90 percent between 2019 and 2020, the bankruptcy filing shows.
Passenger numbers have recovered from the lows of 2020, but were still only 45 percent of pre-pandemic levels in 2023.
Coach has faced higher interest rates and higher costs for basic needs such as employee retention and fuel, the lawsuits say.
Coach entered Chapter 11 with $197.8 million in debt, including $37 million owed on a pandemic loan under the Coronavirus Aid Relief & Economic Security (CARES) Act, and at least $134 million in other unpaid liabilities, including trade payables.
Coach USA operates 27 locations in the US and Canada, with 2,700 employees and 2,070 buses.
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 went bankrupt with three sales deals, each subject to higher and better offers. These sales agreements cover 16 of Coach’s 25 business units and would preserve jobs for approximately 2,100 Coach employees, according to court documents.
Renco Group, a private investment firm, would acquire most of Coach’s assets in exchange for assuming $130 million in corporate debt and certain union contracts.
Avalon Transportation would buy bus lines in Atlanta, Georgia and the western states, as well as specialized tour bus divisions from Coach, for $14.8 million.
ABC Buses would buy a fleet of 143 double-decker buses for $2.3 million, according to court documents.