Coach USA, Inc.ControlBrunswick Transportation Company d/b/a The Maine Line, et al.

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. MC-F-20926]

Coach USA, Inc.--Control--Brunswick Transportation Company d/b/a

The Maine Line, et al.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving finance transaction.

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SUMMARY: Coach USA, Inc. (Coach or applicant), a noncarrier, filed an

application under 49 U.S.C. 14303 to acquire control of Brunswick

Transportation Company d/b/a The Maine Line (Maine Line); Mini Coach of

Boston (Mini Coach); Olympia Trails Bus Co., Inc. (Olympia); Stardust

Tours, Inc. d/b/a Gray Line Tours of Memphis (Gray Line); and Valen

Transportation, Inc. (Valen), all motor carriers of passengers. Persons

wishing to oppose the application must follow the rules under 49 CFR

part 1182, subparts B and C. The Board has tentatively approved the

transaction, and, if no opposing comments are timely filed, this notice

will be the final Board action.

DATES: Comments must be filed by September 28, 1998. Applicant may file

a reply by October 13, 1998. If no comments are filed by September 28,

1998, this notice is effective on that date.

ADDRESSES: Send an original and 10 copies of any comments referring to

STB Docket No. MC-F-20926 to: Surface Transportation Board, Office of

the Secretary, Case Control Unit, 1925 K Street, NW., Washington, DC

20423-0001. In addition, send one copy of comments to applicant's

representatives: Betty Jo Christian and David H. Coburn, Steptoe &

Johnson LLP, 1330 Connecticut Avenue, N.W., Washington, DC 20036.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for

the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Coach currently controls 54 motor passenger

carriers.1 In this transaction, it seeks to acquire direct

control of Maine Line, 2 Mini Coach,3

Olympia,4 Gray Line,5 and

[[Page 43744]]

Valen 6 through the acquisition all of their outstanding

stock.

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\1\ In addition to the instant application, Coach has two other

pending control applications: Coach USA, Inc.--Control--Kansas City

Executive Coach, Inc. and Le Bus, Inc., STB Docket No. MC-F-20923

(STB served July 24, 1998), in which it seeks to acquire control of

two additional motor passenger carriers; and Coach USA, Inc.--

Control--Chenango Valley Bus Lines, Inc.; Colonial Coach Corp.; GL

Bus Lines, Inc.; Gray Line Air Shuttle, Inc.; Gray Line New York

Tours, Inc.; Hudson Transit Corporation; Hudson Transit Lines, Inc.;

and International Bus Services, Inc., STB Docket No. MC-F-20927

(filed July 31, 1998), in which it seeks to acquire control of eight

additional motor passenger carriers.

\2\ Maine Line is a Maine corporation. It holds federally issued

operating authority in Docket No. MC-109495 under which it provides

charter and special operations between points in the United States

and regular route operations in New England. It also holds authority

from the State of Maine to conduct intrastate operations in that

state. It operates a fleet of approximately 49 vehicles and employs

approximately 85 people. Maine Line's gross revenue for fiscal year

(FY) 1997 was approximately $8.2 million. Prior to the transfer of

its stock into a voting trust, it was owned by Robert J. Ouellette,

Albert Z. Ouellette, Giles J. Ouellette, Joel D. Ouellette, Michael

D. Ouellette, Dennis R. Ouellette, and Catherine Ouellette-Carlton.

\3\ Mini Coach is a Massachusetts corporation. It holds

federally issued operating authority in Docket No. MC-231090 under

which it provides charter and special operations beginning and

ending at Medford, MA, and extending to points in the United States

(except Alaska and Hawaii). It operates a fleet of 12 motorcoaches

and 19 minibuses and vans and employs 70 people. Mini Coach's gross

revenue for FY 1997 was approximately $3.8 million. Prior to the

transfer of its stock into voting trust, it was owned by Steven and

Lori Bauld.

\4\ Olympia is a New Jersey corporation. It holds federally

issued operating authority in Docket No. MC-138146 under which it

provides charter and special operations between points in the United

States and regular-route service between points in New York and New

Jersey. It also holds authority from the State of New York and the

State of New Jersey to conduct intrastate operations in those

states. It operates a fleet of 56 buses and 4 vans and employs 130

people on a full time basis and 30 people part time. Olympia's gross

revenue for FY 1997 was approximately $16.5 million. Prior to the

transfer of its stock into voting trust, it was owned by Nikolas

Agathis, Sophia Agathis, William T. Agathis, Michael E. Agathis, and

Nicholas C. Agathis.

\5\ Gray Line is a Tennessee corporation. It holds federally

issued operating authority in Docket No. MC-318341 under which it

provides charter and special operations, as well as authority from

the Tennessee Department of Safety to conduct intrastate operations

in that state. It operates a fleet of 6 minibuses and 1 van and

employs 12 people. Gray Line's gross revenue for FY 1997 was

approximately $580,000. Prior to the transfer of its stock into

voting trust, it was owned by John N. Fain, Jr.

\6\ Valen is a California corporation. It holds federally issued

operating authority in Docket No. MC-212398 which includes regular-

route authority between points in California, Nevada and Arizona, as

well as authority from the California Public Utilities Commission to

conduct intrastate operations in that state. It operates a fleet of

approximately 5 motorcoaches and other vehicles. Valen's gross

revenue for FY 1997 was approximately $2.5 million. Prior to the

transfer of its stock into voting trust, it was owned by Michael L.

Valen, Michaeleen Valen, Bipinchandra M. Ramaiya, and Marguerite L.

Skinner.

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Applicant submits that there will be no transfer of any federal or

state operating authorities held by the acquired carriers. Following

the consummation of the control transaction, these carriers will

continue operating in the same manner as before, and, according to

applicant, granting the application will not reduce competitive options

available to the traveling public. Applicant asserts that the acquired

carriers do not compete with one another, to any meaningful degree.

Applicant submits that each of the acquired carriers is relatively

small and that each faces substantial competition from other bus

companies and transportation modes.

Applicant also submits that granting the application will produce

substantial benefits, including interest cost savings from the

restructuring of debt and reduced operating costs from Coach's enhanced

volume purchasing power. Specifically, applicant claims that each

carrier to be acquired will benefit from the lower insurance premiums

negotiated by Coach and from volume discounts for equipment and fuel.

Applicant indicates that Coach will provide each carrier to be acquired

with centralized legal and accounting functions and coordinated

purchasing services. In addition, applicant states that vehicle sharing

arrangements will be facilitated through Coach to ensure maximum use

and efficient operation of equipment, and that coordinated driver

training services will be provided. Applicant also states that the

proposed transaction will benefit the employees of the acquired

carriers and that all collective bargaining agreements will be honored

by Coach.

Coach plans to acquire control of additional motor passenger

carriers in the coming months. It asserts that the financial benefits

and operating efficiencies will be enhanced further by these subsequent

transactions. Over the long term, Coach states that it will provide

centralized marketing and reservation services for the bus firms that

it controls, thereby further enhancing the benefits resulting from

these control transactions.

Applicant certifies that: (1) Maine Line, Olympia, and Valen hold

satisfactory safety ratings from the U.S. Department of Transportation,

while Mini Coach holds a conditional safety rating and Gray Line has

not been rated; (2) each of the acquired carriers maintains sufficient

liability insurance; (3) none of the acquired carriers is domiciled in

Mexico nor owned or controlled by persons of that country; and (4)

approval of the transaction will not significantly affect either the

quality of the human environment or the conservation of energy

resources. Additional information may be obtained from applicant's

representatives.

Under 49 U.S.C. 14303(b), we must approve and authorize a

transaction we find consistent with the public interest, taking into

consideration at least: (1) the effect of the transaction on the

adequacy of transportation to the public; (2) the total fixed charges

that result; and (3) the interest of affected carrier employees.

On the basis of the application, we find that the proposed

acquisition of control is consistent with the public interest and

should be authorized. If any opposing comments are timely filed, this

finding will be deemed vacated and a procedural schedule will be

adopted to reconsider the application. If no opposing comments are

filed by the expiration of the comment period, this decision will take

effect automatically and will be the final Board action.

Board decisions and notices are available on our website at

``WWW.STB.DOT.GOV.''

This decision will not significantly affect either the quality of

the human environment or the conservation of energy resources.

It is ordered:

1. The proposed acquisition of control is approved and authorized,

subject to the filing of opposing comments.

2. If timely opposing comments are filed, the findings made in this

decision will be deemed as having been vacated.

3. This decision will be effective on September 28, 1998, unless

timely opposing comments are filed.

4. A copy of this notice will be served on the U.S. Department of

Justice, Antitrust Division, 10th Street & Pennsylvania Avenue, NW.,

Washington, DC 20530.

Decided: August 7, 1998.

By the Board, Chairman Morgan and Vice Chairman Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 98-21935 Filed 8-13-98; 8:45 am]

BILLING CODE 4915-00-P