BUSRide editors spoke with Peter Pantuso, president and CEO of the American Bus Association, about Congress’ failure to include the motorcoach industry in the Coronavirus Aid, Relief, and. Economic Security Act
BUSRide: The motorcoach and intercity bus industry needs immediate relief from Congress during the coronavirus pandemic. What happened?
Pantuso: Our industry was not specifically identified in the Senate bill, which means the Senate and the House agreed to have dedicated funding for every passenger mode of transportation – with the exception of intercity buses.
I am mystified as to how they put that together. We have been working literally day and night for the last few weeks, trying to get intercity buses included. We have tried every single angle, so it has not been for lack of effort.
The impact that I see on the industry is as follows: Motorcoach businesses fall into three broad groups of service – charter and tour, commuter, and scheduled service.
As of today, I think every charter and tour company is pretty much shut down. Most, if not all, of their employees are furloughed. There are a few places where an operator might still be doing some one-off trip for whatever reason, but they are mostly all closed.
The commuter market is close to that point, if not already there. Non-essential businesses are being told to close by governors. As all that is moving forward, there is obviously less need for commuter services.
Then last, but certainly not least, are the scheduled services, which have significantly cut services due to very small ridership.
When can these industry segments expect to recover?
Nobody really has the answer to that. When we do start recovering, I believe the commuter services will start to come back first because people will need to get back to work on a reliable form of transportation.
Then as people begin to move around the country a little more, we will see the scheduled carriers come back.
Finally, the last segment to recover will be the charter and tour markets. That represents a unique part of the industry, because most operators have not been operating at high levels for the past few months. Business slowed down during the holidays and remained slow in January and February. Then, as it is every year, the industry was expected to boom through March, April, May, and early June – thanks to the heavy student market. That is when virtually every charter company runs at 100-percent capacity. Due to supply and demand, those months represent the highest annual rates for these operators. Many make more than half of their annual revenue during those spring and summer months.
That revenue now is completely gone because all those student trips are virtually canceled. I do not know of any operator whose student trips in March and or April have not canceled. Most have also canceled for the May and June.
To lose half a year’s revenue is devastating for independent businesses of any size, especially after coming off a seasonal three-month hiatus. Many of our operators spent those months reinvesting in their companies – buying new vehicles, new technology, or conducting much-needed maintenance.
They still have bus payments. They still have insurance payments. They have rent or lease payments due on their facilities. Half of their annual revenues are gone, and no one is sure what the rest of the year will be like. Many of these companies are in difficult financial; shape today, and it will continue to get worse for them.
How did Congress miss the bus so badly?
They not only underestimated our contribution to the economy; they underestimate the role that we serve in security and in defense. There are almost 600 motorcoach companies that have approval from the Department of Defense to move troops every year. How do those groups move when those companies are out of business?
We are also vital link to the Federal Emergency Management Administration (FEMA), and to many state emergency management organizations in the Gulf Coast and on the Eastern seaboard. In any given year, there can be as many as 600 or 650 buses called out to move people out of harm’s way during hurricane season. Most often we are moving people who do not have accessible transportation, or who live in nursing homes. What happens when hurricane season hits and those companies aren’t available to move those individuals?
They further underestimated our value as part of the travel and tourism industry. Our travel partners, as well as hotels, restaurants, theaters, theme parks, and more, amount to an annual $237 billion contribution to the economy.
They simply do not understand, and our plight has thus far fallen on deaf ears.
Congress failed to help the bus industry, but how can operators help themselves during this crisis?
One of our top priorities is working on the fourth stimulus package, which will hopefully be deliberated when Congress returns from recess – but many of our members cannot wait that long.
Today, operators must be calling their state’s Small Business Administration (SBA) office. Many stimulus dollars have been set aside for small businesses in this crisis, and operators must be looking into how they can tap those dollars.
Our priority at the ABA today is helping our members understand and navigate those elements – making sure our operators know this money is out there and that they know how to apply for it.
ABA furnished the following information regarding the Small Business Administration’s Paycheck Protection Program:
The CARES Act establishes a new $349 billion Paycheck Protection Program. It provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed. Treasury and the Small Business Administration expect to have this program up and running by April 3 so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.
Applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans.
The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100 percent guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.
The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. Visit www.SBA.gov/Coronavirus for more information on the Paycheck Protection Program.
The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.
ABA provided the following additional information about how operators can help themselves and the industry during these challenging times:
Have you written to your state and federal legislators yet on the effect that COVID-19 has had on your business? You need to do this today!
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