NEW YORK CITY The leading bus sightseeing operations here, Gray Line New York and CitySights NY, have formed a joint venture and a new company to operate the services of both companies.

The company is called Twin America LLC and it began operating on the last day of March.

Gray Line New York was owned by Stagecoach Group PLC, the Scottish-based parent company of Coach America and megabus.com, while City Sights NY was part of the New York Airport Service group of companies, one of citys largest operators of ground passenger transportation, tour and sightseeing services for leisure and corporate markets.

Both operations are perhaps best known for their hop-on, hop-off double-decker tour buses in New York.

In announcing the deal, Stagecoach Group noted that the sightseeing market in New York City "has been adversely affected by poor economic conditions and a weaker tourist market characterized by reduced hotel occupancy rates and lower airline traffic."

The two companies also were locked in a tough competitive fight marked by price competition.

While both companies have contributed vehicles, licenses and other assets to the combined operation, Stagecoach Group holds 50 percent of the voting rights and 60 percent of the economic rights in the venture, with CitySights NY holds the other half of the voting rights and 40 percent of the economic rights.

The gross assets being contributed by Gray Line New York to the venture had a net book value of $22.5 million as of Feb. 28, while the gross assets that CitySights NY contributed had a net book value of $6.1 million.

For the year ended April 30, 2008, Gray Line New York had an operating profit of $17.3 million, and for the 12 months ended Jan. 31, 2009, CitySights NY reported an operating profit of $8.7 million.

Stagecoach suggested those numbers wont be realized during the remainder of this year because of the falloff of visitors to New York.

The new venture is retaining both the Gray Line and CitySights brands.

A board of directors, which includes representatives from both companies, will oversee the venture, with Mark Marmustein of CitySights NY named chief executive and leading the day-to-day management of the business.

Brian Souter, chief executive of Stagecoach Group, said the new venture "will allow us to deliver a more coordinated service to our customers, who will have access to a high-quality, good value range of sightseeing products. Both businesses will also benefit from a number of synergies, which will make our collective operations more efficient and give us a strong platform for the future."