In a situation mirroring the broader struggles of the US intercity bus industry, Coach USA, the operator of popular discount bus service Megabus, has filed for bankruptcy protection. The announcement, which came amidst the lingering effects of the COVID-19 pandemic on travel patterns, has been reported to highlight the company's drop in ridership and rising operational costs. According to the Chicago Sun-Times, Coach USA's ridership plummeted to just 10% of pre-pandemic levels in 2020, which only partly recovered to 45% in 2023, as the company grappled with increased expenditures in fuel, insurance, and labor.
While airlines have nearly bounced back to their normal traffic, bus companies lag woefully behind, with a survey from the American Bus Association, cited by Bloomberg, indicating that the bus ridership had returned to only 40% of its pre-pandemic strength by late 2022. Supplying further context, Peter Pantuso, President and CEO of the American Bus Association, told Bloomberg, "There were about 3,000 bus companies in 2019, there’s closer to 1,500 or 1,600 bus companies left."
The journey to bankruptcy for Coach USA, which operates 25 different businesses and employs approximately 2,700 people, will continue as it pursues a court-supervised sell-off of its assets. The bus operator, once purchased for $270 million in 2019 by private equity firm Variant Equity Advisors, has entered into three separate sale agreements subject to the court sale process, as reported by the Chicago Sun-Times.
Despite the dire state of the industry, experts suggest potential for recovery. Sarah Kaufman, director of the New York University Rudin Center for Transportation, conveyed to Bloomberg that improving the attractiveness and accessibility of bus facilities could revitalize intercity bus travel. However, the economic landscape for such initiatives remains challenging, "It’s certainly challenging for people who rely on this mode of travel, whether it’s for price or convenience or choice and people who can’t drive, or don’t want to drive," Kaufman added.
