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‘We need direct assistance from the government or we can’t survive as an industry’: American Bus Association CEO

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Peter Pantuso, American Bus Association CEO & President and Alan Glickman, Starr Chairman & CEO join Yahoo Finance’s On The Move panel to assess safety protocols during the coronavirus crisis and how COVID-19 will impact motorcoaches and the bus industry post-pandemic.

Video Transcript

JULIE HYMAN: Well, this Wednesday, 1,000 buses will be descending on Washington DC to draw attention to the motor coach industry in the wake of the coronavirus pandemic and where these companies go from here. We're joined right now by Peter Pantuso. He is the CEO and president of the American Bus Association. He's in Washington DC, as well as Alan Glickman. He is chairman and CEO of Starr, which is a motor coach company. He's joining us from Hamilton, New Jersey.

Peter, I want to start with you and this event that's taking place on Wednesday. So all these folks are coming from all over the country on buses. What are you trying to highlight? What message are you trying to bring to lawmakers in Washington with this event?

PETER PANTUSO: Yeah, we want to make sure, Julie, that people understand the important role that buses play. I think too often, we're kind of like wallpaper. People don't really see us. But we preserve, and protect, and serve the public, and every mode is connected. So we've got we've got over 36,000 buses in the industry across the country, 3,000 operators.

They connect cities. They connect rural and urban areas. They provide assistance during hurricanes. They're also there when we need to get people, because another mode is broken down. Sometimes, Amtrak's not moving, the airlines aren't flying. We're getting commuters in and out of cities in addition to the fact that we're a vibrant part of the travel and tourism community.

ADAM SHAPIRO: Hey, it's Adam Shapiro. Alan, let me ask you this question. Because you know, buses are very important, especially in metro areas, like New York. So what kind of safety protocols, though, do you follow? Do you follow what the state tells you? Do you follow what the Department of Transportation tells you, especially when it comes to COVID-19?

ALAN GLICKMAN: Well, we're really regulated by everybody. We're regulated on a local basis, certainly by the DOT, certainly under the new COVID rules and regulations, and our own protocol. So we go over and above when it comes to protecting our riding public.

- Peter, I just want to ask as far as the amount of people you can have on a bus, if we're going to be following social distancing, obviously, a bus is going to be a tighter place. You might have to have people sit different rows apart. How will bus companies make up that kind of loss in revenue if they can't pack as many people into the seats as possible?

PETER PANTUSO: That's a great question. I was just going to say, great question. The industry's trying to figure that out. And we're taking our cue, as Alan said, from all different government agencies, federal, and state, and local.

We're looking at what transit systems are doing, because obviously, it's going to be very, very difficult to limit the number of people on transit train or a transit bus. Many companies are starting out talking about filling half the bus up, but you're right. That's not sustainable over a long period.

JULIE HYMAN: So Alan, talk to us specifically what you're seeing. I mean, yours is a 75-year-old company started by your dad, and you provide bus services for a number of different types of uses, right? So right now, my understanding is you're not running buses, right? So how quickly do you need to get back up and running and at what capacity to keep yourself going financially?

ALAN GLICKMAN: Well, we operate 40 buses, and the capacity on the buses are 56 passengers. And it's very important for us to fill those buses, and we're very much like the airlines. We can't pull out middle seats obviously, and our margins are extremely low. And that's just the way the business has always been traditionally, so we have to have what we call load factors, good load factors.

So it will be pretty difficult for us. We really can't envision what the new normal is going to be. We're not going to be able to be successful if we're going to fill half the bus. If we were to fill half the bus, the cost for the riding public would have to double, and that would never happen. So it's a big challenge for us.

RICK NEWMAN: Hey, guys. Rick Newman here. So when you go to some stores, there's plexiglass between the customer when you checkout and the cashier, different types of physical barriers. Can you do anything like that in a bus? I mean, could you put plexiglas, separate rows of plexiglas, or do anything to create some kind of physical barrier?

ALAN GLICKMAN: We don't envision that. But in the state of New Jersey, there is a barrier, a plexiglas barrier, between the passengers and the driver. And that's one way that the driver will be disassociated from the passengers, so that will protect him to a certain extent. But as far as protecting one passenger for another, we don't envision that happening.

JULIE HYMAN: Peter, it's Julie, again. I would ask, again, sort of what role you think DC can play here, because I think what's important to note about the motor coach industry as well-- I mean, we've talked a lot about how this pandemic has hit lower income people in many cases the hardest. Either because they're deemed essential, and they have to go to work putting their health at risk or because they have lost their jobs.

And I would think that this industry services those folks disproportionately. So do you say to Congress, we need stimulus dollars as well, like the airline industry is getting? And what kind of money would be necessary for the industry to sort of get them through this?

PETER PANTUSO: Well, that's absolutely the message, Julie. I mean, Congress provided $85 billion to the airlines, the Amtrak, the transit systems, and the airports. The airlines move about 700 million passengers a year. The private bus motor coach industry moves about 600 million passengers a year. And we need some kind of direct assistance, or we're not going to survive as an industry. We've been asking for $15 billion in total, a combination of grants and loans.

We have just gotten a report about a week or two ago from our economist up in New York City, who noted that, if the pandemic continues, if it comes back, if we see a real slow rebirth of the industry, by the end of the year, this industry could be operating at about 25% capacity. That means we're going to lose a tremendous number of companies in every corner of the country. So when the call comes to get people out of harm's way during hurricane season, which we're just approaching, or to move military, or to move those who can least afford to travel, as you pointed out, buses may not be there, may not be available.

- Alan, I just want to ask for yourself. Where do you see the business returning first? You know, if you're a private bus company, it can be difficult to, I assume, lure people if they've been kind of scared of the pandemic. And they don't necessarily want to be in such tight quarters. What companies do you think will start to use bus services, again, first?

ALAN GLICKMAN: I would think that the school travel might come back first with the youngsters. We do quite a bit of that business, and there was a lot of that business throughout the country. The senior citizen business, I don't know that that's going to come back very quickly. But we carry all kinds of different groups.

We had 17,000 guests last year on our tour programs. We carry military people. We carry students to and from colleges and universities in the area. It's quite a bit of difference between the different groups that we carry, but I would think that the young kids will probably come back before the older people come back.

JULIE HYMAN: Gentlemen, thank you so much for your time. Appreciate it and all the best to you. Alan Glickman is the chairman and CEO of Starr. And Peter Pantuso, American Bus Association CEO and president, thanks again.