Coach USA, Inc.ControlChenango 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.

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. MC-F-20927]

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.

AGENCY: Surface Transportation Board.

ACTION: Notice Tentatively Approving Finance Transaction.

-----------------------------------------------------------------------

SUMMARY: Coach USA, Inc. (Coach), a noncarrier that controls several

motor passenger carriers, filed an application under 49 U.S.C. 14303

for control of Chenango Valley Bus Lines, Inc. (Chenango), Colonial

Coach Corp. (Colonial), GL Bus Lines, Inc. (GL), Gray Line Air Shuttle,

Inc. (GL Air), Gray Line New York Tours, Inc. (GLNY), Hudson Transit

Corporation (HTC), Hudson Transit Lines, Inc. (HTL), and International

Bus Services, Inc. (IBS), all motor passenger carriers related to one

another through largely common ownership. 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 October 13, 1998. Applicant may file a

reply by November 2, 1998. If no comments are filed by October 13,

1998, this notice is effective on that date.

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

Docket No. MC-F-20927 to: Surface Transportation Board, Office of the

Secretary, Case Control Unit, 1925 K Street, N.W., 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: Joseph H. Dettmar, (202) 565-1600.

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

SUPPLEMENTARY INFORMATION: Coach currently controls several motor

passenger carriers.1 In this transaction, it seeks to

acquire control of Chenango; 2

[[Page 46099]]

Colonial; 3 GL; 4 GL Air; 5 GLNY;

6 HTC; 7 HTL; 8 and IBS 9

by acquiring all of the stock of each of these commonly-controlled

carriers.10

---------------------------------------------------------------------------

\1\ The Board recently issued a notice tentatively granting

Coach authority to control nine additional motor carriers of

passengers. Coach USA, Inc.--Control--Blue Bird Coach Lines, Inc. et

al., STB Docket No. MC-F-20921 (STB served June 19, 1998). Because

no adverse comments were filed, the notice became the final action

of the Board. In addition, the Board more recently issued notices

tentatively granting Coach authority to control two motor passenger

carriers, Coach USA, Inc.--Control--Kansas City Executive Coach,

Inc. and Le Bus, Inc., STB Docket No. MC-F-20923 (STB served July

24, 1998); and to control five motor passenger carriers, Coach USA,

Inc.--Control-- Brunswick Transportation Company d/b/a The Maine

Line, et al. STB Docket No. MC-F-20926 (STB served Aug. 14, 1998).

Finally, Coach has recently filed an application with the Board to

continue in control of a motor passenger carrier, Coach USA, Inc.--

Continuance in Control--Salt Lake Coaches, Inc., STB Docket No. MC-

F-20928 (filed Aug. 3, 1998).

\2\ Chenango is a New York corporation. It holds federally

issued operating authority in Docket No. MC-141324, as well as

authority from the New York State Department of Transportation

(NYDOT). Chenango utilizes a fleet of approximately 14 motorcoaches

and employs 47 full and part time employees. Chenango's gross

revenue for fiscal year 1997 was approximately $2.2 million.

Chenango is owned in full by noncarrier Limousine Rental Service,

Inc. (Limousine). A majority of the shares of Limousine are owned by

Mr. Barnett Rukin. Limousine also wholly owns GL.

\3\ Colonial is a New Jersey corporation. It holds federally

issued operating authority in Docket No. MC-39491, as well as

authority from the New Jersey Department of Transportation (NJDOT).

Colonial operates a fleet of 8 motorcoaches and employs 25 full and

part time persons. Colonial's gross annual revenue in 1997 was

approximately $945,000. Colonial is owned by Mr. Barnett Rukin (who

holds a majority interest), Mr. Julius Eisen and Ms. Susan Eisen.

\4\ GL is a New York corporation. It holds federally issued

operating authority in Docket No. MC-180074, as well as authority

from NYDOT. At present, GL is not conducting motor passenger

operations and has no revenues from bus operations. GL, like

Chenango, is owned in full by noncarrier Limousine.

\5\ GL Air is a New Jersey corporation. It holds federally

issued operating authority in Docket No. MC-218255, as well as

authority from NYDOT. GL Air operates a fleet of 44 vans, 33 double-

deck buses, 17 minibuses and 1 trolley. GL Air employs approximately

200 persons. GL Air's gross annual revenue in 1997 was over $9.2

million. GL Air is owned by Mr. Barnett Rukin, Mr. Julius Eisen, Mr.

Charles Flateman, Mr. Andrew Eisen, Ms. Cara Eisen, Mr. Joshua

Eisen, the Emily Rukin Grantor Trust, the William Rukin Grantor

Trust, and the Alexandra Rukin Family Trust.

\6\ GLNY is a New York corporation. It holds federally issued

operating authority in Docket No. MC-180229. GLNY employs

approximately 90 persons. GLNY's 1997 annual revenues were in excess

of $17.8 million. GLNY is owned by Mr. Barnett Rukin, Mr. Julius

Eisen, Ms. Brina Lois Rosenblatt, Mr. Bernard Flateman, and Mr.

Charles Flateman.

\7\ HTC is a New York corporation. It holds federally issued

operating authority in Docket No. MC-133403, as well as authority

from NYDOT. HTC employs approximately 40 persons. HTC's gross annual

revenue for 1997 was $5.1 million. HTC is owned by Mr. Julius Eisen,

Mr. Joshua Eisen, Mr. Andrew Eisen, William Rukin Grantor Trust,

Cara Gail Eisen Trust, Ms. Donna Rukin, and Short Line Terminal

Agency, Inc. (Short Line), a noncarrier which owns a majority

interest in HTC. The voting shares of Short Line are in turn owned

largely by Mr. Barnett Rukin.

\8\ HTL is a Delaware Corporation. It holds federally issued

operating authority in Docket No. MC-228, as well as authority from

NJDOT. HTL operates a fleet of 150 vehicles, mostly motorcoaches,

and employs approximately 325 persons. HTL's gross annual revenue in

1997 was approximately $25.6 million. Short Line, in which Mr.

Barnett Rukin holds the large majority of voting shares, owns a

majority interest in HTL. HTL is also owned by Mr. Barnett Rukin,

Mr. Julius Eisen, Ms. Susan Eisen, Mr. Joshua Eisen, Mr. Andrew

Eisen, William Rukin Grantor Trust, Trust for the Benefit of Joshua

Eisen, Trust for the Benefit of Andrew Eisen, and HTC, another of

the acquired companies.

\9\ IBS is a New York corporation. It holds federally issued

operating authority in Docket No. MC-155937, as well as authority

from NYDOT and NJDOT. IBS operates a fleet of approximately 50

vehicles and employs approximately 150 persons. IBS's gross annual

revenue in 1997 was approximately $5.8 million, most of which was

earned from transfers from related companies. IBS is owned by Mr.

Barnett Rukin (who holds a majority interest), Mr. Julius Eisen, Ms.

Brina Lois Rosenblatt, Mr. Charles Flateman, and Mr. Bernard

Flateman.

\10\ The Interstate Commerce Commission had previously approved

the common control of these entities in Hudson Transit Lines, Inc.--

Purchase--Inter-City Transportation Co., Inc., No. MC-F-8620 (ICC

served July 27, 1964); Chenango Valley Bus Lines, Inc.--Purchase--

Binghamton Short Lines, Corp., and Chenango Valley Transit, No. MC-

F-12502 (ICC served Oct. 16, 1975); David Rukin, et al.--Control--

International Bus Services, Inc., No. MC-F-15297 (ICC served Aug.

30, 1983); Julius Eisen, et al.--Continuance in Control--GL Bus

Lines and Gray Line New York Tours, Inc., No. MC-F-16347 (ICC served

July 23, 1985); and Barnett Rukin, et al.-- Continuance in Control,

No. MC-F-19545 (ICC served Jan. 1990).

---------------------------------------------------------------------------

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

state operating authorities held by any of the acquired carriers.

Following the consummation of the control transaction, each of the

acquired carriers will continue operating in the same manner as before.

According to applicant, granting the application will not reduce

competitive options available to the traveling public. Applicant

asserts that none of the carriers proposed to be acquired competes to

any meaningful degree with any of the others. Applicant submits that

each carrier faces substantial competition from other bus companies and

modes of transportation.

Applicant also submits that granting the application will produce

substantial benefits, including savings in interest costs from the

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

volume purchasing power. Specifically, applicant claims that the

carriers to be acquired will benefit from lower insurance premiums

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

Applicant indicates that Coach will provide each of the carriers to be

acquired with centralized legal and accounting services 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. Applicant states that, with

Coach's assistance, coordinated driver training services will be

provided enabling each carrier to allocate driver resources in the most

efficient manner possible. 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) none of the carriers holds an

unsatisfactory safety rating from the U.S. Department of

Transportation; 11 (2) each has sufficient liability

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

Mexico or 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.

---------------------------------------------------------------------------

\11\ Chenango, Colonial, GL Air, GLNY, HTL, and IBS each hold a

satisfactory safety rating. GLNY and HTC have not been rated.

---------------------------------------------------------------------------

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 October 13, 1998, unless

timely opposing comments are filed.

4. A copy of this notice will be served on: (1) the U.S. Department

of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia

Avenue, S.W., Suite 600, Washington, DC 20024; and (2) the U.S.

Department of Justice, Antitrust Division, 10th Street & Pennsylvania

Avenue, N.W., Washington, DC 20530.

Decided: August 21, 1998.

[[Page 46100]]

By the Board, Chairman Morgan and Vice Chairman Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 98-23203 Filed 8-27-98; 8:45 am]

BILLING CODE 4915-00-P