Coach USA, Inc., and Coach USA North Central, Inc.ControlNine Motor Passenger Carriers; Notice Tentatively Approving Finance Transactions

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. MC-F-20931, et. al.] 1

Coach USA, Inc., and Coach USA North Central, Inc.--Control--Nine

Motor Passenger Carriers; Notice Tentatively Approving Finance

Transactions

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving finance transactions.

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SUMMARY: Coach USA, Inc. (Coach), a noncarrier, and its wholly owned

noncarrier subsidiaries, Coach USA North Central, Inc. (North Central),

Coach USA Northeast, Inc. (Northeast), Coach USA South Central, Inc.

(South Central), Coach USA Southeast, Inc. (Southeast), Coach USA West,

Inc. (West), and Yellow Cab Service Corporation (Yellow Cab Service)

(collectively, the subsidiaries), filed applications under 49 U.S.C.

14303 for the subsidiaries to acquire direct control of motor passenger

carriers that are currently controlled by Coach or are subject to

pending applications for control. The control applications that are the

subject of this notice are in furtherance of an internal corporate

reorganization plan by Coach. Persons wishing to oppose the

applications must follow the rules under 49 CFR 1182.5 and

1182.8.2 The Board has tentatively approved the

transactions, and, if no opposing comments are timely filed, this

notice will be the final Board action.

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\1\ These proceedings are not consolidated. A single decision is

being issued for administrative convenience.

\2\ Revised procedures governing finance applications filed

under 49 U.S.C. 14303 were adopted in Revisions to Regulations

Governing Finance Applications Involving Motor Passenger Carriers,

STB Ex Parte No. 559 (STB served Sept. 1, 1998).

DATES: Comments must be filed by January 4, 1999. Applicants may file a

reply by January 19, 1999. If no comments are filed by January 4, 1999,

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this notice is effective on that date.

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

STB Docket No. MC-F-20931, et al. 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

applicants' 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: With the growth in the number of Coach-

controlled carriers, Coach has determined that it can best maintain and

improve the management of its controlled operating carriers, and

promote the future growth of Coach, by establishing noncarrier

subsidiaries, organized primarily on a regional basis,3

[[Page 64313]]

that will directly control the existing and future operating carriers

of Coach.4 The transfer of control of each of the motor

passenger carriers to one of the subsidiaries will be by a transfer of

the ownership interest in each operating carrier (either the stock of

the carrier or the stock of the carrier's parent) to the respective

subsidiary. Coach will remain the sole owner of all of the stock of the

subsidiaries and will indirectly control the operating carriers,

providing certain management, corporate and administrative services and

benefits to the subsidiaries. Coach submits that there will be no

transfer of any federal or state operating authorities held by any of

the carriers to be acquired by the subsidiaries and that they will

continue operating in the same manner as before the acquisitions of

control. Accordingly, Coach asserts that granting the application will

not reduce competitive options available to the traveling public.

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\3\ Yellow Cab Service is the exception. It will control those

operating carriers that focus their services on premium, taxicab,

and other specialized transportation services, rather than carriers

in a specific region of the country.

\4\ In addition to the instant applications, Coach states that

it plans to file another application jointly with Coach Canada,

Inc., pursuant to which that subsidiary will seek approval to

acquire control of Coach-controlled motor passenger carriers based

in Canada.

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Coach submits that granting the application will allow the

subsidiaries to maintain and improve the high quality of services that

are now offered by Coach to each of the operating carriers it controls.

According to Coach, by further decentralizing certain management

functions, Coach and its subsidiaries will be better able to plan

equipment utilization, develop financial plans and coordinate other

short-and long-term operational strategies best designed to meet the

specific and unique needs of the carriers assigned to each subsidiary,

and their customers. Specifically, each subsidiary will maintain a

database of assets, including the vehicles operated by each of the

operating carriers, which will allow management to more effectively

deploy vehicles, resulting in more timely and efficient service to the

traveling public. Further, each of the subsidiaries will coordinate the

safety and compliance programs of the carriers it controls, with the

object of maintaining and raising safety performance levels for each of

the operating carriers.

In STB Docket No. MC-F-20931, North Central will be responsible for

Coach-controlled carriers that are based in the following states or

areas: Illinios, Indiana, Iowa, Kentucky, Michigan, Minnesota,

Nebraska, North Dakota, Ohio, South Dakota, western New York, western

Pennsylvania, West Virginia, and Wisconsin. North Central seeks control

of the following nine \5\ motor passenger carriers: Airlines

Acquisition Company, Inc., d/b/a Airlines Transportation Company (MC-

223575); Blue Bird Coach Lines, Inc. (MC-108531); Butler Motor Transit,

Inc. (MC-126876); Gad-About Tours, Inc. (MC-198451); Keeshin

Transportation, L.P. (MC-263222); Keeshin Charter Services, Inc. (MC-

118044); Lenzner Transportation Management Services d/b/a Lenzner Coach

Lines (MC-237433); Niagara Scenic Bus Lines, Inc. (MC-30787); and

Wisconsin Coach Lines, Inc. (MC-123432).\6\

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\5\ On October 21, 1998, Coach and North Central filed a

separate application for the control of two additional carriers in

Coach USA, Inc., and Coach USA North Central, Inc.--Control--Central

Cab Company and Mountaineer Coach, Inc., STB Docket No. MC-F-20939.

\6\ In Coach USA, Inc.--Control--Clinton Avenue Bus Company;

Orange, Newark, Elizabeth Bus, Inc.; and Wisconsin Coach Lines,

Inc., STB Docket No. MC-F-20930, Coach seeks an exemption to acquire

control over Clinton Avenue Bus Company, Orange, Newark, Elizabeth

Bus, Inc., and Wisconsin Coach Lines, Inc. A notice was served and

published in the Federal Register (63 FR 51397) on September 25,

1998, instituting an exemption proceeding. Comments were due by

November 9, 1998.

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In STB Docket No. MC-F-20932, Northeast will be responsible for

Coach-controlled carriers that are based in the following states or

areas: Connecticut, Delaware, eastern New York, eastern Pennsylvania,

Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode

Island, Vermont, and Washington, DC. Northeast seeks control of the

following 30 7 motor passenger carriers: Brunswick

Transportation Company, d/b/a The Maine Line (MC-109495); Cape Transit

Corp. (MC-161678); Chenango Valley Bus Lines, Inc. (MC-141324); Clinton

Avenue Bus Company (MC-223062),8 Colonial Coach Corp. (MC-

39491); Community Coach, Inc. (MC-76022); Community Transit Lines, Inc.

(MC-145548); GL Bus Lines, Inc. (MC-180074); Gray Line Air Shuttle,

Inc. (MC-218255); Gray Line New York Tours, Inc. (MC-180229); H.A.M.L.

Corp. (MC-194792); Hudson Transit Corp. (MC-133403); Hudson Transit

Lines, Inc. (MC-228); International Bus Services, Inc. (MC-155937);

Leisure Time Tours (MC-142011); Mini Coach of Boston (MC-231090);

Olympia Trails Bus Co., Inc. (MC-138146); Orange, Newark, Elizabeth

Bus, Inc. (MC-206227); 9 Pawtuxet Valley Bus Lines (MC-

115432); Progressive Transportation Services, Inc. (MC-247074); Red &

Tan Tours, Inc. (MC-162174); Red & Tan Charter, Inc. (MC-204842);

Rockland Coaches, Inc. (MC-29890); Suburban Trails, Inc. (MC-149081);

Suburban Transit Corp. (MC-115116); Suburban Management Corp. (MC-

264527); Syracuse & Oswego Coach Lines, Inc. (MC-117805); The Arrow

Line, Inc. (MC-1934); Utica-Rome Bus Co., Inc. (MC-7914); and Van

Nortwick Bros., Inc. (MC-149025).

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\7\ On October 21, 1998, Coach and Northeast filed a separate

application for the control of one additional carrier in Coach USA,

Inc., and Coach USA Northeast, Inc.--Control--Bonanza Bus Lines,

Inc., STB Docket No. MC-F-20937.

\8\ See supra note 6.

\9\ See supra note 6.

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In STB Docket No. MC-F-20933, South Central will be responsible for

Coach-controlled carriers that are based in the following states or

areas: Arkansas, Kansas, Louisiana, Mississippi, Missouri, New Mexico,

Oklahoma, Tennessee, and Texas. South Central seeks control of the

following eight motor passenger carriers: Americoach Tours, Limited

(MC-212649); Bayou City Coaches, Inc. (MC-245246); Browder Tours, Inc.

(MC-236290); El Expreso, Inc. (MC-244195); Gulf Coast Transportation,

Inc. (MC-201397); Kerrville Bus Company, Inc. (MC-27530); Stardust

Tours, Inc., d/b/a Gray Line Tours of Memphis (MC-318341); and Texas

Bus Lines, Inc. (MC-37640).

In STB Docket No. MC-F-20934, Southeast will be responsible for

Coach-controlled carriers that are based in the following states or

areas: Alabama, Florida, Georgia, North Carolina, South Carolina, and

Virginia. Southeast seeks controls of the following seven motor

passenger carriers: Air Travel Transportation, Inc., d/b/a Atlanta

Airport Shuttle and Atlanta Airport Shuttle, Inc. (MC-166420); America

Charters, Ltd. (MC-153814); American Sightseeing Tours, Inc. (MC-

252353); Le Bus, Inc. (MC-210900); P&S Transportation, Inc. (MC-

255382); Tippett Travel, Inc., d/b/a Marie's Charter Bus Lines (MC-

174043); and Tucker Transportation Company, Inc. (MC-223424).

In STB Docket No. MC-F-20935, West will be responsible for Coach-

controlled carriers that are based in the following states or areas:

Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon,

Utah, Washington, and Wyoming. West seeks control of the following 14

motor passenger carriers: Airport Bus of Bakersfield (MC-163191);

Antelope Valley Bus, Inc. (MC-125057); Arrow Stage Lines, Inc. (MC-

29592); Black Hawk-Central City Ace Express, Inc. (MC-273611);

California Charters, Inc. (MC-241211); Desert Stage Lines, Inc. (MC-

140919); Grosvenor Bus Lines, Inc. (MC-157317); K-T Contract Services,

Inc. (MC-218583); Gray Line Tours of Southern Nevada, Inc. (MC-127564);

PCSTC, Inc. (MC-184852); Powder

[[Page 64314]]

River Transportation Services, Inc. (MC-161531), Salt Lake Coaches,

Inc. (SLC); 10 Valen Transportation, Inc. (MC-212398); and

Worthen Van Service, Inc. (MC-142573).

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\10\ Coach states that SLC does not yet hold federally issued

operating authority but has filed an application with the Federal

Highway Administration. In Coach USA, Inc.--Continuance in Control--

Salt Lake Coaches, Inc., STB Docket No. MC-F-20928 (STB served Sept.

4, 1998), Coach's continuance in control of SLC was approved upon

SLC's becoming a motor passenger carrier.

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In STB Docket No. MC-F-20936, Yellow Cab Service will be

responsible for those Coach-controlled carriers that focus on

specialized transportation services. Yellow Cab Service seeks control

of the following four motor passenger carriers: Airport Limousine

Service, Inc. (MC-315702); Pittsburgh Transportation Charter Services,

Inc. (MC-319195); Metro Cars, Inc. (MC-276823); and Kansas City

Executive Coach, Inc. (MC-203805).

Coach and the subsidiaries plan to acquire control of additional

motor passenger carriers in the coming months. Coach anticipates that

the subsidiaries will be well-positioned to aid in the assessment of

possible future acquisitions of motor passenger carriers in the

particular area in which each subsidiary functions. According to Coach,

the subsidiaries will be able to make those assessments in view of the

operations of the carriers under their control and with a view toward

developing and carrying out a strategic growth plan best suited to

their particular area. Coach asserts that, as a result of the transfer

of control to the subsidiaries, the operating carriers will become

stronger and more responsive competitors in the areas in which each

operates. Thus, the traveling public will have a higher level of

assurance of access to passenger services due to the ability of the

management of each subsidiary to coordinate the movement of vehicles

between and among the operating carriers. In addition, the traveling

public will benefit from the strategic planning and coordination by

each subsidiary, as well as the ability of management to be responsive

to the concerns, complaints and issues raised by the traveling public.

Coach certifies that none of the carriers to be acquired by the

subsidiaries holds an unsatisfactory safety rating from the U.S.

Department of Transportation; that each has sufficient liability

insurance; and none is domiciled in Mexico or owned or controlled by

persons of that country; and that approval of the transactions will not

significantly affect either the quality of the human environment or the

conservation of energy resources. Additional information may be

obtained from the applicants' 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 applications, we find that the proposed

acquisitions of control are consistent with the public interest and

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

finding will be deemed vacated and, unless a final decision can be made

on the record as developed, a procedural schedule will be adopted to

reconsider the applications.11 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.

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\11\ Under revised 49 CFR 1182.6(c), a procedural schedule will

not be issued if we are able to dispose of opposition to the

application on the basis of comments and the reply.

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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 acquisitions of control are 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 January 4, 1999, 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: November 12, 1998.

By the Board, Chairman Morgan and Vice Chairman Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 98-30982 Filed 11-18-98; 8:45 am]

BILLING CODE 4915-00-P