SANDY SPRINGS, Md. Transportation Management Services, a surprise entry in the Coach America bankruptcy buyout, plans to widen its role in the tour-and-charter motorcoach industry by going local.

TMS top bus executive says management of the 15 Coach America operations its acquiring through the bankruptcy auction conducted last month will be handled at the local level and mostly by employees currently on the job.

"TMS believes the local management teams and personnel are critical to the success of the individual bus companies," said John Montgomery, president of TMS bus subsidiary, Horizon Coach Lines.

"We intend to return the focus to the local market to take advantage of the bus experience at each of the acquired companies."

He said the companies have about 1,500 employees and most are being asked to stay on.

Montgomery said that while retaining local management will be a key strategy for the greatly expanded company, TMS also will support the operations of each company by assisting in their long-term success and growth.

"We are looking forward to deepening our relationships in the motorcoach industry, while expanding our footprint through this acquisition," he said.

TMS, best known in the industry for coordinating transportation at large national events, including conventions, trade shows and sports events, was the successful bidder for the Coach America tour-and-charter operations in seven states.

Among them are operations in Winston-Salem, Charlotte, Raleigh/Durham and Jacksonville, N.C.; Jacksonville, Orlando, West Palm Beach and Miami, Fla.; San Diego, Los Angeles and San Francisco, Calif.; Houston; Denver; Phoenix, and Las Vegas.

The units being purchased by TMS either currently or formerly operated under such long-running brands as Arrow Stage Lines in Phoenix; America Charters, Piedmont Coach Lines and Southern Coach Co., in North Carolina; Franciscan Lines and Gray Line San Francisco; Gray Line of Houston; American Bus Lines in Miami; Orlando Transportation/Gray Line of Orlando, and Midnight Sun Tours in West Palm Beach/Lake Worth, Fla.

The package, which is costing TMS $17 million and a substantial amount of Coach America debt, includes about 700 motorcoaches and 300 midsize buses, vans and other vehicles.

Other successful buyers at the bankruptcy auction included Coach USA, which is acquiring nine companies; Tornado Bus Co., which is picking up a single company; MV Transportation, which is purchasing two major transit contracts, and Professional Transportation Inc., which is buying Coach Americas rail crew shuttle business. (See June 1 Bus & Motorcoach News.)

All of the purchases require the approval of the U.S. Bankruptcy Court in Wilmington, Del., a procedure thats expected to be handled routinely.

Earlier expansion

TMS, which was formed as a transportation management company in 1995, broadened its business in 2009, purchasing Horizon Coach Lines of Vancouver, B.C., and Gray Line of Seattle. It currently has a fleet of about 165 motorcoaches and 85 other vehicles that operate in Florida, California, Washington, Texas, Washington D.C., and Vancouver.

The addition of the Coach America companies and their fleets will give the company about 865 motorcoaches and 385 buses, vans and other vehicles, vaulting it high up on the list of North Americas largest tour-and-charter bus operators.

TMS, which surprised much of the industry with its purchase of the Coach America operations, was attracted to the Coach America holdings because of the locations and potential business opportunities, according to Montgomery.

"The cities are all either strong convention, cruise or government services markets for TMS," he said. "These markets should help support our future growth, as well as drive additional business to other carriers in the motorcoach industry."

He said the businesses have successful track records and TMS expects them to be even better producers after it completes the purchase of the companies and begins operating them.

"All of the locations are profitable, but have been burdened with excessive corporate debt, large corporate overhead and some questionable legacy contracts," he said. "We expect to address these as part of our acquisition plan."

Operational game plan

He said the plan is aimed at giving the company a more reasonable debt structure, eliminating some of the lease and customer service contracts that have restrained operations and providing for a much smaller overhead structure.

Montgomery said, too, that TMS also will help bolster the companies by stressing an overall safety program that promotes a safe travel experience, and addressing fleet requirements with a combination of refurbishing some existing vehicles, buying lower cost vehicles, and adding new and late-model coaches.

"Finally, when possible, we will seek to leverage our TMS sales and service operations to drive additional business to these locations," he added.

Despite the large number of motorcoaches and diverse locations being added to the Horizon operation through the acquisition, it is not expected to have much of an impact on TMS and its use of other private carriers in its transportation management business.

"We still will need them and we look forward to continuing to work with them," Montgomery emphasized.

He noted, too, that the purchase deal did not include the Coach America brand name and the companies being acquired will be carrying the Horizon name.

Montgomery would not discuss financial details of the purchase, maintaining that TMS is a private business and does not make such information public.

However, he did say the purchase will be financed through a combination of cash from the company and debt financing from a third-party financial institution.