Global Passenger Services, L.L.C., et al.ControlGongaware Tours, Inc., et al.

[Federal Register Volume 64, Number 179 (Thursday, September 16, 1999)]
[Notices]
[Pages 50319-50322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24177]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Docket No. MC-F-20954]


Global Passenger Services, L.L.C., et al.--Control--Gongaware 
Tours, Inc., et al.

AGENCY: Surface Transportation Board.

ACTION: Notice Tentatively Approving Finance Application.

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SUMMARY: Global Passenger Services, L.L.C. (Global or applicant), a 
noncarrier, filed an application under 49 U.S.C. 14303 to: (i) acquire 
control of nine motor passenger carriers through indirect stock 
ownership and (ii) merge or consolidate some or all of them with 
existing affiliates in the future. Persons wishing to oppose the 
application must follow the rules under 49 CFR part 1182, subpart B. 
The Board has tentatively approved the transactions. If no opposing 
comments are timely filed, this notice will be the final Board action.

DATES: Comments are due by November 1, 1999. Applicant may reply by 
November 16, 1999. If no comments are received by November 1, 1999, 
this approval is effective on that date.

ADDRESSES: Send an original and 10 copies of any comments referring to 
STB Docket No. MC-F-20954 to: Surface Transportation Board, Office of 
the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC 
20423-0001. In addition, send one copy of any comments to applicant's 
representative: Mark J. Andrews, Barnes and Thornburg, 1401 I Street, 
N.W., Suite 500, Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar (202) 565-1600 [TDD 
for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Global, a Delaware limited liability 
company, states that it currently controls 17 motor passenger carriers 
1 and holds a majority stock control of Student 
Transportation of America, Inc. (STA) and Travelways, Inc. 
(Travelways). STA and Travelways are Delaware corporations that control 
subsidiaries holding interstate authority as motor passenger carriers. 
Through this application, Global seeks authority to acquire control of 
nine additional interstate passenger carriers: three would become 
wholly owned subsidiaries of STA, and six would

[[Page 50320]]

become wholly owned subsidiaries of Travelways.2
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    \1\ See Global Passenger Services, L.L.C.--Control--Bortner Bus 
Company, et al., STB Docket No. MC-F-20954 (STB served July 17, 
1998) (Bortner).
    \2\ Global also seeks authority for the possible future merger 
of some or all of the carriers with its existing affiliates.
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    The carriers to be controlled by STA are:
    Gongaware Tours, Inc. (Gongaware), a Pennsylvania corporation, 
which holds federally-issued operating authority in MC-166233 to 
provide charter and special operations between points in the United 
States except Hawaii, and Pennsylvania intrastate authority (PUC No. A-
79466), and which conducts limited charter and tour services incidental 
to a school transportation operation based in central Pennsylvania;
    Hamilton Motor Coaches (Hamilton), a New Jersey corporation, which 
holds federally-issued operating authority in MC-8130 to provide 
charter and special operations between points in the United States, 
except Hawaii, and which primarily provides vacation charters and 
organized tours to and from New Jersey; and
    North Bend Bus Lines, Inc. (North Bend), an Oregon corporation, 
which holds federally-issued operating authority in MC-215564 to 
provide charter and special operations between points in the United 
States, except Hawaii, and intrastate authority in Oregon (PUC No. 
4124), and which operates school transportation services within Oregon.
    The carriers to be acquired by Travelways are:
    Perkiomen Valley Bus Company (Perkiomen), a Pennsylvania 
corporation, which holds federally-issued operating authority in MC-
83791 to provide charter and special operations and contract-carrier 
services between points in the United States, except Hawaii, and 
regular-route service between Pennsburg, PA, and New York, NY, and 
Philadelphia, PA; which holds intrastate authority in Pennsylvania (PUC 
No. A-16420, Folder No. 9); and which primarily operates vacation 
charters and organized tours within eastern Pennsylvania;
    Shoup Buses, Inc. d/b/a Cardinal Charters & Tours (Shoup), an 
Indiana corporation, which holds federally-issued operating authority 
in MC-70384 to provide charter and special operations and contract 
carrier service between points in the United States, except Hawaii, and 
intrastate authority in Indiana (PSCI Certificate No. 5224-A,2), 
Michigan (MDOT Certificate No. IA-3) and Ohio (PUCO Permit No. 66209), 
and which operates group charters and organized tours in Illinois, 
Indiana, Michigan, Ohio, and Wisconsin;
    Travelways of Nevada, Inc. (Travelways-NV),3 a Nevada 
corporation, which holds federally-issued operating authority in MC-
162053 to provide charter and special operations authority between 
points in the United States, except Hawaii, and Nevada intrastate 
authority under TSA Certificate No. 2021, and which conducts casino 
tours and other charter operations within Nevada;
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    \3\ Travelways-NV was formerly known as Adventure Charters & 
Tours, Inc.
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    Travelways of New York, Inc. (Travelways-NY),4 a New 
York corporation, which holds federally-issued operating authority in 
MC-181064 to provide charter and special operations between New York 
City on one hand and, on the other, points in the United States, except 
Alaska and Hawaii; which holds New York intrastate authority in NYDOT 
Case No. 30468; and which operates convention shuttles and organized 
tours within New York City and its immediate vicinity;
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    \4\ Travelways-NY was formerly known as Personal Transit, Inc.
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    Tri-State Coach Lines, Inc. (Tri-State), an Illinois corporation, 
which holds federally-issued operating authority in MC-129038 to 
provide regular-route and special-operations authority between O'Hare 
and Midway airports at Chicago, IL, and surrounding points in Illinois 
and Indiana, and regular route service between points in southern 
Indiana and Kentucky, and which operates scheduled and on-call airport 
shuttle services in Illinois and Indiana; and
    United Limo, Inc. d/b/a Indiana Motor Bus Company (United), an 
Indiana corporation, which holds federally-issued operating authority 
in MC-150365 to provide charter and special operations between points 
in the United States, except Hawaii, and regular route service between 
points in Illinois, Indiana, Michigan and Wisconsin; which holds 
Indiana intrastate authority under PSCI Certificate No. 14299-A,2; and 
which principally provides group charters and scheduled and on-call 
airport shuttle services in Illinois, Indiana, Michigan, and Wisconsin.
    Applicant states that shares of Gongaware, Hamilton, Perkiomen, 
Shoup, Tri-State and United have been placed in independent voting 
trusts under the guidelines of 49 CFR part 1013. Assertedly, the 
respective trustees will convey the shares of the respective carriers 
to STA or Travelways on the effective date of the Board's approval in 
this proceeding. Applicant further states that when it acquired the 
stock of North Bend, Travelways-NV, and Travelways-NY, it relied on 
written representations by the sellers that these carriers held no 
federal operating authority as motor passenger carriers. Global 
indicates that, when it learned that these carriers had federally-
issued authority, it filed this control application to rectify the 
situation.5
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    \5\ Global indicates that North Bend, Travelways-NV, and 
Travelways-NY were identified as non-regulated carriers on the 
corporate family diagram in its application in Bortner.
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    Global further states that it is engaging in a series of intra-
company, corporate family transactions that will consolidate and 
simplify its corporate structure, without significantly affecting its 
current operations or employment levels. According to applicant, the 
transactions involve transfers of operating authority and name changes, 
consolidations, internal stock transfers, and future surrender of 
unneeded federal authorities. The application contains a detailed 
description of these intra-company transactions.
    Applicant claims that the intra-company transactions are not 
subject to Board jurisdiction. Global asserts that it has received 
approval from the Federal Highway Administration (FHWA) for the 
transfers of federal regulated authority from 10 carriers to non-
regulated entities and for changes of names of several carrier 
subsidiaries. Applicant asserts further that Board approval is not 
necessary for the mergers of its non-regulated subsidiaries with other 
subsidiaries whose status as holders of federally-issued operating 
authority will not change. The transfer of stock from one affiliate to 
California Travelways, Inc. (CA Travelways) is assertedly of no 
jurisdictional significance, Global says, citing Transcontinental Bus 
System, Inc. --Control--American, 87 M.C.C. 796, 798-99 (1961). 
Finally, applicant intends to surrender unneeded authority for 
affiliates who are engaged in non-regulated operations after the Board 
authorizes this transaction.
    Our jurisdiction, however, does extend to those aspects of the 
intra-company transactions that are covered under section 14303. As a 
result of intra-company transactions, STA will be the transferee of 
authority currently held by George Ku, Inc. in MC-31422 and will 
control: Goffstown Truck Center, Inc. (MC-191957) (Goffstown); Rick Bus 
Company (MC-140403); Santa Barbara Transportation Corp. (MC-198757); 
STA of Connecticut, Inc. (MC-336635); STA of Pennsylvania, Inc.

[[Page 50321]]

(MC-251473); Student Transportation of America, L.L.C. (MC-304399); and 
Student Transportation of Canada, Ltd. (MC-111191). In addition, STA 
will control Gongaware, Hamilton, and North Bend.
    Travelways will control: Boardwalk Financial Services, Inc. (MC-
231149); CA Travelways (MC-182176); Golden Touch Transportation, Inc. 
(MC-235493); Pennsylvania Travelways, Inc. (MC-167547) (PA Travelways); 
PROTRAV Services, Inc. (MC-227448); Travelways of Florida Charter 
Busing, Inc. (MC-172787); Travelways of Missouri, Inc. (MC-217893); 
Travelways of Pittsburgh, Inc. (MC-52479); and Travelways of Tennessee, 
Inc. (MC-263038). In addition, Travelways will control: Travelways-NV, 
Travelways-NY, Shoup, Perkiomen, Tri-State, and United.
    Applicant states that the intra-company transactions will reduce 
the number of subsidiaries in its corporate family by 40%, enabling it 
to reduce administrative operating expenses. Global states further that 
the transactions will enable it to use ``Travelways'' and ``STA'' as 
brand names for its leisure transportation and school transportation 
businesses.
    Global asserts that the proposed transactions are consistent with 
the statutory public-interest criteria relating to service adequacy, 
financial reasonableness and employee interests. Applicant claims that 
its control of the carriers will produce substantial benefits, 
including interest cost savings from restructuring of debt and reduced 
operating costs from its enhanced volume purchasing power. Applicant 
also claims that the carriers it acquires will benefit from the lower 
insurance premiums it has negotiated and from volume discounts for 
equipment and fuel. Applicant also avers that the proposed transactions 
will improve the efficiency of all acquired carriers, by providing 
centralized services to support decentralized operational and marketing 
managers.6 In addition, Global states that the proposed 
transactions will facilitate vehicle sharing arrangements between 
acquired entities, so as to ensure maximum utilization and efficient 
operation of equipment. According to applicant, the involved 
transactions offer ongoing benefits for employees of acquired carriers 
not only because of the efficiencies described above, but also because 
Global's policy is to honor all collective bargaining agreements of 
acquired carriers.
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    \6\ Centralized support services will be provided in such areas 
as legal affairs, accounting, purchasing, safety management, 
equipment maintenance, driver training, human resources and 
environmental compliance.
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    Applicant further states that the proposed transactions will not 
reduce competition in the regulated bus industry or competitive options 
available to the traveling public. Applicant asserts that each of its 
current passenger carrier affiliates and each carrier to be acquired 
faces substantial competition from other bus companies and 
transportation modes. Applicant notes that its current operations focus 
on two passenger service sectors: school transportation and leisure 
transportation. School transportation is largely exempt from regulation 
by the FHWA and the Board under 49 U.S.C. 10526(a)(1), while leisure 
transportation is regulated as charter and special operations.
    Applicant states that its acquisition will not significantly affect 
its school transportation services. The only carrier being acquired 
providing school transportation service is North Bend, and it operates 
strictly within Oregon. North Bend's operations do not overlap 
geographically with those of any of Global's other affiliates.
    Global states further that the control transactions will expand the 
geographical area covered by leisure transportation operations, but 
will not increase its share of any local market.7 In 
addition, applicant states that its proposed control of Tri-State and 
United will allow it to make its first significant entry into a third 
service sector: intercity airport shuttle operations.
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    \7\ Applicant notes that there is geographic overlap between the 
leisure travel services provided by Hamilton and Perkiomen with 
those of PA Travelways. Applicant states that PA Travelways 
concentrates on charter transportation for large corporate clients, 
while Hamilton and Perkiomen package and operate vacation tours for 
the general public.
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    Applicant estimates that its leisure transportation operations 
account for approximately 0.6% of a nationwide market that generates 
annual sales of approximately $25 billion. Moreover, applicant 
maintains that its proposed additional control of the carriers whose 
stock has been placed in voting trusts will increase that market share 
by less than two-tenths of a percentage point.
    Applicant estimates that the nationwide market for intercity 
airport shuttle services amounts to approximately $5 billion per year, 
and that its proposed acquisition of Tri-State and United will increase 
its nationwide share of this market from essentially zero to slightly 
more than 0.1%. Tri-State and United, which were commonly owned, serve 
airports in Chicago, Indianapolis, and Milwaukee, and have a market 
share ranging between 10 and 50%. Applicant notes that intercity 
airport shuttles are subject to intense intermodal competition from car 
rental agencies and private automobiles.
    Global certifies that: (1) None of the carriers to be acquired or 
any of its current affiliates has received a safety fitness rating of 
less than satisfactory, with one exception that it is attempting to 
rectify; 8 (2) all carriers maintain sufficient liability 
insurance; (3) none of the involved carriers has been or is either 
domiciled in Mexico or owned or controlled by persons of that country; 
and (4) approval of the proposed transactions will not significantly 
affect either the quality of the human environment or the conservation 
of energy resources. Applicant also asks the Board to approve 
applicant's proposed control of intrastate operations in Indiana, 
Michigan, Ohio, Oregon, Nevada, New York, and Pennsylvania, pursuant to 
the preemptive provisions of 49 U.S.C. 14303(f). Additional information 
may be obtained from applicant's representative.
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    \8\ According to applicant, Goffstown, received a Conditional 
safety rating in 1987, long before that carrier was acquired. 
Applicant indicates that, while the seller had represented that the 
problems identified by the FHWA had been corrected, the seller had 
not requested that the rating be changed (apparently because the 
seller was unfamiliar with such procedures). Applicant states that 
it has requested the FHWA to schedule a reinspection.
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    Under 49 U.S.C. 14303(b), the Board must approve and authorize 
transactions it finds consistent with the public interest, taking into 
account at least: (1) the effect of the transactions on the adequacy of 
transportation to the public; (2) the total fixed charges that result; 
and (3) the interest of affected carrier employees.
    Although this application is difficult to follow, it is essentially 
complete, and our rules require that we tentatively approve complete 
applications in the Federal Register notice providing for public 
comment. Therefore, we tentatively find that the proposed transactions, 
including control of intrastate operations pursuant to 49 U.S.C. 
14303(f), and corporate restructuring are consistent with the public 
interest and should be authorized. If any opposing comments are timely 
filed, this finding will be deemed vacated and, unless a final decision 
can be made on the record as developed, a procedural schedule will be 
adopted to reconsider the application.9 If no timely 
comments are

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filed by the expiration of the comment period, this decision will take 
effect automatically and will be the final Board action.
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    \9\ Under revised 49 CFR 1182.6(c), a procedural schedule will 
not be issued if we are able to dispose of opposition to the 
application on the basis of comments and the reply.
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    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''
    This decision will not significantly affect the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Global's above-described control of the indicated carriers and 
corporate restructuring are approved and authorized, subject to the 
timely filing of opposing comments.
    2. If timely opposing comments are filed, the findings made in this 
decision will be deemed vacated.
    3. This decision will be effective on November 1, 1999, unless 
timely opposing comments are filed.
    4. A copy of this notice will be served on (1) the U.S. Department 
of Transportation, Office of Motor Carriers--HIA 30, 400 Virginia 
Avenue, S.W., Suite 600, Washington, DC 20024; (2) the U.S. Department 
of Transportation, Office of the General Counsel, 400 7th Street, S.W., 
Washington, DC 20590; and (3) the U.S. Department of Justice, Antitrust 
Division, 10th Street and Pennsylvania Avenue, N.W., Washington, DC 
20530.

    Decided: September 10, 1999.

    By the Board, Chairman Morgan, Vice Chairman Clyburn, and 
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-24177 Filed 9-15-99; 8:45 am]
BILLING CODE 4915-00-P