Stagecoach fights bus tour threat

StagecoachTransport group Stagecoach has vowed to fight a lawsuit that seeks to break up its sightseeing bus company in New York City.

Twin America, a joint venture between Stagecoach North America and City Sights, has been told by the US Department of Justice (DoJ) it has a monopoly over the 100 million US dollar (£62 million) a year "hop-on, hop-off" bus tour market.
The DoJ claims the venture, formed in 2009, allowed Twin America to hike prices by around 10% for tourists visiting attractions including the Empire State Building, Central Park and Times Square.

Perth-based Stagecoach, one of the UK's biggest bus and coach operators with around 8,000 vehicles and 2.5 million passengers every day, said it was "disappointed" by the legal proceedings and would "take all actions to protect their interests".

New York Attorney General Eric Schneiderman said: "The formation of Twin America has meant higher prices and less competition. Tourists who come to the Big Apple deserve better." The lawsuit, filed in the US District Court for the Southern District of New York, seeks to break up the joint venture or force the sale of some of its assets.

New York City draws around 50 million visitors annually and an estimated two million of these visitors spend more than 100 million US dollars (£62 million) each year on hop-on, hop-off tours on open-top double-decker buses.

The DoJ said that prior to the joint venture, two firms accounted for roughly 99% of the hop-on, hop-off bus tour market in the city.

Stagecoach North America, which ran the Gray Line New York brand, and City Sights, engaged in vigorous head-to-head competition on price and product offerings that directly benefited consumers, the DoJ said.

Twin America was formed in 2009 and the two firms increased base fares for their products by 5 US dollars (£3), raising the retail price of an adult ticket for each company's popular "all routes" tour from 49 US dollars (£30) to 54 US dollars (£34). Stagecoach North America holds 50% of the voting rights and 60% of the economic rights of the joint venture.

Stagecoach said since 2009 the sightseeing bus industry has become more competitive as new operators started up in New York, while other companies have announced firm plans to do so shortly.
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