The sagging national economy, combined with lower fuel prices, has resulted in a drop in charter rates in recent weeks, coach operators in many parts of the country report.

An informal survey of 15 operators from across the U.S. revealed that where the local or regional economy has turned weak, charter bus rates have often followed suit, dropping by double-digit percentages.

One Atlanta-area operator reports his competitors are undercutting his rates by 20-25 percent.

"Theyre starving right now," said Sammy Neal, general manager of Holiday Tours in Marietta, Ga., of his competitors. "Theyre chasing their tail and theyll never catch it."

Tom Giddens of Pacific Coachways Charter Services in Garden Grove, Calif., said his competitors "will drop (their price) just to get a trip. Its amazing."

Much of Giddens work involves student travel jobs. But school systems have been hit hard in Orange County, Calif., and hes noticing the effects. Still, he has tried to stay steady on his pricing, although he will reduce rates on a case-by-case basis.

Paul Snelgrove, president of Constitution Coach Inc. in Bolton, Conn., said he has seen his larger competitors undercut his daily rate of by $150.

"Were our own worst enemies," says Snelgrove of the industry. "Its good for the consumer but sooner or later it will be like the airlines."

One Plains state operator said for that bread-and-butter, one-day-turnaround charter runs between his city and the state capital, roughly 100 miles away, his leading competitor has cut rates by nearly 20 percent since December.

"It's a low bidder's market," said the operator, who asked that his name not to be used. "And, of course, (the customers) want brand new buses.

"With fuel prices going down and the economy going down, theres tremendous downward pressure (on prices)," said the operator.

Godfrey LeBron of Paradise Trailways in Hicksville, N.Y., said he has seen operators charging rates that are below cost. "The moment you do that, the consumers begin expecting it, and they think thats what it costs.

"The worst thing operators can do is to panic," says LeBron, who also is chairman of the United Motorcoach Association.

"Ive been very creative and Ive cut our prices without losing our dignity," adds Lauren LeBron, president of Paradise Trailways and Godfrey LeBrons wife and business partner. "Its scary."

Across the country, many coach operators are anticipating worse times ahead, although layoffs hadnt hit the interviewed companies themselves yet.

"Its the fear of whats going to happen," says Giddens. "People are not spending their money; theyre holding back."

Jim Lienhart of Arrow Coach Lines in Little Rock, Ark., reports that in his area as fuel prices dropped last year, so did surcharges: "I think from that respect, everybodys going to drop rates."

Scott Brush of Colorado Charter Lines & Tours in Commerce City, Colo., thinks the weakening economy has caused him and others in the industry to be more flexible with rates.

He still has a going rate, but notes: "To get business, we have to bend a little bit with our rates." For example, he has developed special deals to generate new business.

He also has seen customers with advanced bookings come back seeking lower rates which, in some cases, he has gone along with.

Mark Greer, founder of BusRates.com, said he hasnt noticed much of a universal decline in charter rates because of the economy. Rather, rates dropped when diesel fuel prices came down last year, and operators are telling him they feel rates are at a level they should have been all along.

Lienhart said he expects to be undercut by those operators that have significant debt. "A lot of these people get into heavy debt. They need cash flow, even if its a losing cash flow."

He doesnt anticipating dropping his rates.

Frank Leyden, general manager of Cline Tours in Birmingham, Ala., hasnt seen undercutting in his market because of the economy.

"Here, in Alabama, we didnt have far to fall," joked Leyden. "In Alabama, were more isolated than the rest of the country. We continue to be busy and bookings are strong."

For Jeff Greteman of Windstar Lines in Carroll, Iowa, rates have been holding steady, although: "You have to look at ways to cut costs. You have to keep moving ahead. You cant dwell on it or youll be going backwards."

He says rates in his area did drop when fuel prices declined.

"This year, its hard to get any kind of increase because of the fuel and because of the economy. We wont increase sales this year but if we can maintain them well be happy," he says.

Many operators no doubt share Gretemans sentiments.