Megabus owner Coach USA, which includes the brand and several commuter bus lines connecting New York and New Jersey, filed for bankruptcy Wednesday after seeing a significant drop in ridership caused by the COVID-19 pandemic.
The company, which owes between $100 million and $500 million, filed for Chapter 11 in Wilmington, Delaware, allowing it to continue operations while reorganizing its debt.
Purchased by Variant Equity Advisors in April 2019, Coach USA saw commuter ridership plummet by 90% in 2020.
Despite some recovery, ridership in 2022 was only 45% of pre-pandemic levels, coupled with rising fuel, insurance, and labor costs. These challenges led management to consider a sale.
Coach USA is borrowing $20 million to fund its restructuring and maintain operations during bankruptcy.
The company said that it continues to work closely with vendors, business partners, and transportation agencies, paying them in full for goods and services provided after the filing date.
Coach USA emphasized it has the financial resources to meet its obligations throughout the court-supervised sale process, contingent on court approval of the $20 million financing commitment.
“As we move through this process, our top priority remains safely carrying the millions of passengers who choose our buses each year and working closely with our valued contract customers and transportation agency partners,” said Derrick Waters, CEO of Coach USA.
“We appreciate the dedication of our employees to operating with safety as a priority and serving our customers and our communities.”