Coach USA, the operator of Megabus and two dozen other companies, has filed for bankruptcy protection amid lagging ridership that hasn’t recovered since the COVID-19 pandemic.
The company said bus operations will continue as it undergoes a court-supervised sale of its assets.
In court filings, Coach USA said its ridership plummeted 90% in 2020 during pandemic lockdowns. While ridership has bounced back somewhat, the company only saw 45% of pre-pandemic levels in 2023. Meanwhile, the company said it is facing increasing operating costs due to rising fuel, insurance, labor costs and inflation.
Megabus has operated bus lines in Chicago since its founding in 2006. The company paused operations in Chicago in 2020, during the pandemic, and resumed them in 2023.
Coach USA operates 25 different businesses and has about 2,700 full- and part-time employees, according to court documents. The company has entered into three separate sale agreements, but they are subject to better offers in the court-supervised sale process. Coach USA was purchased for $270 million in 2019 by private equity firm Variant Equity Advisors.
While airlines and other transit industries have nearly recovered their pre-pandemic levels of ridership, private bus companes are still lagging. Across the industry, bus ridership had only returned to 40% of pre-pandemic numbers by the end of 2022, according to the latest survey from the American Bus Association.
The private bus industry is also undergoing major consolidation, according to the survey. Greyhound, a fixture of low-budget travel in Chicago, was bought by FlixBus in 2021. Greyhound lost ownership of its West Loop station during a sale and will likely be evicted in October. It’s still unclear where buses will pick up and drop off riders after it loses its station.