Orange County awarded a new service contract to a Coach USA affiliate on June 24 to maintain several Middletown area bus lines that carry residents to grocery stores, doctor appointments, and shopping plazas.
The new annual contract came after the major private bus company and its affiliates filed for Chapter 11 bankruptcy and began selling almost all of their business assets.
“Coach USA was the sole bidder on the new contract bus service,” Orange County attorney Richard Golden told The Epoch Times in a statement. “The failure to award the contract to Coach USA, without any opportunity for a replacement bus service provider to step in, would cause a significant disruption to the 38,000 riders per year.
“It is very important to the County Executive [Steve Neuhaus] that we maintain bus routes so that we can properly serve the county residents.”
Aside from the Middletown area lines, Orange County also has a contract with a Coach USA affiliate for three major commuter lines that carry residents to their jobs in New York City. These lines logged more than 1 million rides in the county last year, according to data published by the county transportation council.
According to a company statement dated June 12, Coach USA is committed to normal operations of its bus services throughout North America during the court-supervised sale processes.
“Our top priority remains safely carrying millions of passengers who choose our buses,” Coach USA CEO Derrick Waters said in a statement. “We encourage customers to book their trips through our app and online as they always do.”
On June 11, the same day of its bankruptcy filing, the bus company and a subsidiary of New York City-based Renco Group entered into a purchase agreement covering a dozen major bus lines, including the Middletown area services and commuter lines in Orange County.
The agreement is expected to maintain bus services and preserve close to 1,800 jobs, according to court filings.
Coach USA also entered into a sales agreement with Avalon Transportation for four domestic bus lines while actively seeking buyers for all remaining company assets.
“At the present time, the impact that this Coach bankruptcy might have on the County generally is unknown,” Mr. Golden said in a statement to The Epoch Times. “More will be known after the Bankruptcy Court rules on the propriety and details of the proposed sale, which is scheduled to be completed in August.”
The parent company currently employs 2,210 full-time employees and about 500 part-time workers, with more than 1,500 union members, according to court filings.
It sought and was granted court authorization to pay employee salaries and benefits during the bankruptcy proceedings.
The average weekly payroll for the bus company ranges from $2.6 million to $4.6 million.
Pandemic-related ridership decline and driver shortage were cited as major causes of the company’s financial hardship, according to court filings.
In Orange County, annual ridership on Coach USA commuter bus lines fell by two-thirds to about 500,000 in 2020 and dipped further in the following year. Though the ridership steadily recovered over the past two years, it still falls behind the pre-pandemic levels by a third.
For Middletown area bus lines, the ridership rose from 33,000 in 2021 to 36,000 in 2022 and to 38,000 in 2023, which is about 70 percent of pre-COVID-19-pandemic levels.
Companywide, total ridership logged by Coach USA in the past year was less than half of the pre-COVID-19-pandemic levels, while operating costs rose amid inflation, according to court filings.
Amid financial hardship, Coach USA applied for and received a combined federal COVID-19 relief of more than $100 million in loans and grants.
In November 2023, it hired a professional firm focused on financial restructuring and began marketing almost all company assets in the following month, which produced more than a dozen interested buyers, according to a court filing.
The next court date for the bankruptcy case is July 9.
