February 2006 WHAT’S GOING ON IN THE BUS INDUSTRY MOTORCOACH EXPO 2006 ’07 engines will boost price of new coaches by $10,000–$15,000 TAMPA — The new emissions not reduce engine efficiency or cre- controls required by the federal ate any new engine problems. government for 2007 diesel “It will be pretty much business engines shouldn’t create any seri- as usual,” suggested Roe C. East of ous maintenance problems for the Cummins. “We expect the overall motorcoach industry, but they will impact to be very minimal.” boost the price of new coaches by However, operators will feel the several thousands of dollars. pinch when they purchase new That’s the opinion of a panel of coaches with the filters and the engine and coach manufacturer other controls needed to meet the representatives who discussed the much-tougher emissions standards new requirements and their impact that take effect next year. on coach operations at a workshop “They could add $10,000 to during Motorcoach Expo 2006. $15,000 to the price of a (new) The panelists said the much- coach,” said panel member Brian talked-about diesel particulate fil- Couch of Motor Coach Industries, ters that will be integral to the ’07 noting that final figures will not be emissions-reduction system on new available until later this year. engines will require extra mainte- No representatives of the other nance, but the filters probably will CONTINUED ON PAGE 8 þ Sales of new coaches reach three-year high Sales of new motorcoaches in 2004 compare to 1,771 new coach- the U.S. and Canada last year es sold in 2003 and 2,402 in 2002. reached their highest level since Sales in the final quarter of last 2002, National Bus Trader maga- year also were strong. In fact, the zine reports. quarter’s up-tick meant the indus- A total of 2,058 new coaches try posted sales increases for five were sold during 2005, represent- consecutive quarters, when com- ing a gain of more than 23 percent pared to the same quarter a year from 2004 sales of 1,668 units. earlier. The sales upswing began in Motorcoach Expo 2006 came to Tampa, Fla., last month and the That means bus operators the fourth quarter of 2004. city and the show exceeded almost everyone’s expectations. Tampa invested upwards of $155 million A total of 663 new coaches Industry attractions and facilities, especially its aquarium, were first rate. more in new over-the-road buses were sold in last year’s fourth quar- The Expo Solution Sessions were easily the best ever, judging by last year than they did in 2004. ter, an increase of 12 percent over operator comments. Show attendance surprised many who had Just as significantly, 2005 2004 fourth-quarter sales of 565 takes to feared a drop-off from last year’s door-busting Expo in Las Vegas. marked the first year-over-year coaches. And the weather was Chamber-of-Commerce perfect. The show increase in new coach sales since Despite the good fourth-quar- Tampa floor, above top, was steadily busy; Prevost Car unveiled its X3-45 the industry’s banner year of 1998. ter showing, the quarter wasn’t as coach (above left), and Elvin McMichael of Executive Coach in In other words, it has been seven strong as the first and third quar- Lancaster, Pa. (smiling above right), won a Holland America cruise years since the industry posted ters when sales jumped more than from MCI, presented by MCI CEO Tom Sorrells. Complete Expo back-to-back annual sales gains. 40 percent from the same quarters coverage begins on Page 8. 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Call your nearby ABC Account Executive for more information and to reserve available units immediately. SERVICE FIRST, SATISFACTION ALWAYS MIDWEST NORTHEAST SOUTHEAST SOUTHWEST WESTERN 800-222-2875 800-222-2873 800-222-2871 800-222-2877 800-322-2877 www.abc-companies.com Bus & Motorcoach NEWS OPERATOR NEWS February 2006 3 Evacuation contractor returns payment; worries mount WASHINGTON — Landstar payment to Landstar for the evac- coaches at a cost of $5,000 per bus Landstar and three subcontrac- Katrina came ashore near New Systems, the Jacksonville, Fla., uation work without having any per day, while the actual numbers tors that worked for the company – Orleans. trucking logistics company at the documentation of the costs, ac- turned out to be 400 buses at Carey Limousine, Bus Bank and There is widespread talk in the center of the controversy over pay- cording to a report issued by the $1,550 a day. Transportation Management Sys- motorcoach industry that some ing motorcoach operators for the U.S. Department of Transportation Henry H. Gerkens, president tems — have come under heavy operators may never see all of evacuation of thousands of New Office of Inspector General. and chief executive of Landstar, criticism from motorcoach opera- their money. Orleans residents after Hurricane The FAA was asked about the called the use of the word “over- tors for not paying promptly for The most ominous story cur- Katrina hit in late August, has paperwork on Oct. 13, three weeks payment” a mischaracterization, their evacuation work. rently making the rounds is that one returned more than half of a $59 after the payment was made, and claiming it was part of an advance A number of operators say of Landstar’s subcontractors made million payment it received from Landstar was asked to provide the payment that turned out to be larg- they still are owed thousands of deals with operators for more buses the federal government for arrang- documents the same day. It sent er than what was thought to be dollars — in some cases, hundreds that weren’t needed or authorized, ing buses for the movement. the information about three weeks needed. of thousands — for the work they and it has run out of money with The repayment of $32 million later, along with the refund check. “They asked for the money did transporting people either which to pay the operators. came after federal auditors discov- The report said the overpay- back and we returned it based on before or after Hurricanes Katrina Operators have resorted to all ered that the Federal Aviation ment occurred because the initial the cutback in tasks,” Gerkens told and Rita. Hurricane Rita struck sorts of tactics, including hiring Administration made a partial contract was to supply 1,100 the Washington Post. the Texas Gulf Coast shortly after CONTINUED ON PAGE 16 þ Mega-deal: CUSA to buy American Coach Lines DALLAS – CUSA, the largest of Miami; Tippett Travel of tour and charter motorcoach oper- Florida, and Dillon’s Bus Service ator in the U.S., is buying the in Millersville, Md. nation’s fifth largest coach opera- At one time, those companies tion, American Coach Lines Inc. were owned by such well-known of Lake Worth, Fla. industry executives as Louis Wade CUSA announced late last Jr., Billy Ray Rhyme, Calvin month it had reached an agree- Cooper, Michael Gaddis, Marie ment to purchase American Coach and Charles Tippett, Louis Lines, which also happens to be Cicerone and the Dillons, Ron, the biggest coach operator in the Keith and Brian. southeastern U.S. When Coach USA sold them, Terms of the proposed deal the companies were among the were not disclosed but most cer- better performing Coach USA tainly topped $50 million. operators. The region had sales of American Coach Lines was $49.8 million in the 12 months created just over two years ago ended April 30, 2003, with an when a group of investors bought operating profit — before good- the motorcoach companies that will amortization — of $5.8 mil- made up the southeast region of lion. That calculates out to an Coach USA. operating margin above 11 per- Among the companies cent, and that was during a period acquired — that formed American of industry stagnation, resulting Coach Lines — were such well- from the then-lackluster economy, known operators as America depressed travel sector and after- Charters of Charlotte, N.C.; effects of 9/11. Southern Coach Co. of Durham, The New York investor group N.C.; American Coach Lines of that assembled American Coach Norcross, Ga.; Gray Line of Fort Lines paid $48 million for the Lauderdale; American Bus Lines companies. The purchase included eight operators in Maryland, Georgia, North Carolina and Issues combined; Florida. see new Web site Today, American Coach Lines operates in 13 markets and under a Because of Motorcoach Expo half-dozen brand names: 2006, the production schedule for • Midnight Sun Tours, West Bus & Motorcoach News was Palm Beach, Fla.