Lone Star Coaches, Inc.--Control--Tri-City Charter of Bossier, Inc.

Topics:  Lone Star Coaches, Tri-City Charter

Jeffrey Herzig
Surface Transportation Board
9 June 2017

[Federal Register Volume 82, Number 110 (Friday, June 9, 2017)]
[Notices]
[Pages 26831-26832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12011]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21076 \1\]


Lone Star Coaches, Inc.--Control--Tri-City Charter of Bossier, 
Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice Tentatively Approving and Authorizing Finance 
Transaction.

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SUMMARY: On May 12, 2017, Lone Star Coaches, Inc. (Lone Star) filed an 
application to acquire Tri-City Charter of Bossier, Inc. (Tri-City 
Charter).\2\ Lone Star and Tri-City Charter are each federally 
registered, passenger motor carriers that are in the process of 
consolidating parts of their operations while maintaining their 
distinct USDOT operating authorities. The Board is tentatively 
approving and authorizing the transaction, and, if no opposing comments 
are timely filed, this notice will be the final Board action. Persons 
wishing to oppose the application must follow the rules.
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    \1\ Concurrent with its application, Lone Star also filed, in 
Docket No. MCF 21076 TA, a request under 49 U.S.C. 14303(i) to 
operate the assets to be acquired on an interim basis pending 
approval of the acquisition. The Board will address that request in 
a separate decision.
    \2\ Lone Star made a supplemental filing on May 31, 2017.

DATES: Comments must be filed by July 24, 2017. Lone Star may file a 
reply by August 8, 2017. If no comments are filed by July 24, 2017, 
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this notice shall be effective on July 25, 2017.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21076 to: Surface Transportation Board, 395 E Street 
SW., Washington, DC 20423-0001. In addition, send one copy of comments 
to: Mark Steelman, President, Lone Star Coaches, Inc., P.O. Box 531668, 
Grand Prairie, TX 75053.

FOR FURTHER INFORMATION CONTACT: Sarah Fancher (202) 245-0355. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: Lone Star asserts the following facts. Lone 
Star (MC-153014) is a corporation under Texas law that is not 
affiliated with any other motor carriers. The company provides charter, 
tour, and local intercity and intracity transportation in the Dallas, 
Fort Worth, Abilene, Tyler, Grand Prairie, Waco, and Austin markets. It 
currently operates 26 commercial motor vehicles, specifically over-the-
road motorcoaches. Tri-City Charter (MC-370884) is a corporation under 
Louisiana law that is not affiliated with any other motor carriers. 
Tri-City Charter provides charter service in Louisiana, Texas, and 
other parts of the southeast United States with 17 motorcoaches.
    Lone Star states that, under the proposed transaction, it will 
acquire 100 percent control of Tri-City Charter. Tri-City Charter will 
continue to operate as a sub-division of Lone Star and maintain its 
interstate and intrastate operating authorities. The parties do not 
contemplate any significant change in Tri-City Charter's operations as 
a result of the transaction.
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction that it finds consistent with the public interest, taking 
into consideration at least: (1) The effect of the proposed transaction 
on the adequacy of transportation to the public; (2) the total fixed 
charges that result from the proposed transaction; and (3) the interest 
of carrier employees affected by the proposed transaction. Lone Star 
submitted information, as required by 49 CFR 1182.2, including 
information to demonstrate that the proposed transaction is consistent 
with the public interest under 49 U.S.C. 14303(b), and a statement that 
the aggregate gross operating revenues of Lone Star and Tri-City 
Charter exceeded $2 million for the preceding 12-month period as 
required under 49 U.S.C. 14303(g).\3\
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    \3\ Applicants with gross operating revenues exceeding $2 
million are also required to meet the requirements of 49 CFR 
1182.2(a)(5).
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    Lone Star submits that the proposed transaction will not have an 
adverse impact on the adequacy of transportation services available to 
the

[[Page 26832]]

public. The transaction will enable the carriers to engage in vehicle 
sharing arrangements, to better utilize sales and field operations 
personnel, and to bring certain management functions together for more 
efficient management of the overall enterprise. According to Lone Star, 
the transaction will allow the companies to take advantage of better 
financial terms, which will allow them to replace aging vehicles and to 
purchase newer, more energy efficient vehicles on more favorable terms. 
The transaction will allow the carriers to maximize the use of 
personnel and equipment and to use debt restructuring to increase 
investment into their companies. Lone Star states that the carriers 
will be able to serve their existing geographic areas and customer 
bases more efficiently and effectively and that they do not anticipate 
any reduction in current service levels. According to Lone Star, the 
transaction will enable the carriers to leverage the combination of 
companies to grow the businesses of each individual carrier, resulting 
in the same or greater level of transportation to the public.
    Lone Star also submits that the transaction will not have a 
material adverse effect on competition. According to Lone Star, the 
companies do not plan to significantly alter their current operations 
but merely wish to take advantage of efficiencies gained through 
working under one corporate structure. Lone Star argues that the areas 
served by the carriers are subject to robust competition, with over 15 
interstate transportation providers offering charter and tour service 
in the Dallas/Fort Worth area alone. Lone Star estimates that 
interstate and intrastate carriers in the Dallas/Fort Worth market 
generate over $150 million in annual revenues and operate approximately 
670 vehicles (including sedans, mini buses, and motor coaches). Lone 
Star estimates that the combined revenues of Lone Star Coaches and Tri-
City Charter will be less than 5% of the Dallas/Fort Worth market and 
will account for about thirty vehicles in the local market. Lone Star 
also notes that the areas served by the carriers are largely separate 
and distinct with a small amount of overlap in larger markets. Lone 
Star argues that the transaction will not result in any consolidation 
of market power in any relevant market, because the companies will 
maintain their separate identities and be responsible for their own 
operations within the larger corporate family. Lone Star submits that 
the efficiencies associated with merging two companies under one 
corporate structure will enable the carriers to continue to compete 
with other carriers. Lone Star asserts that the lack of barriers to 
entry in the charter and tour business makes the business contestable 
on a trip-by-trip basis and reduces the risk of a carrier abusing its 
market power.
    Regarding fixed charges, Lone Star states that the restructuring of 
day-to-day operations will allow Lone Star to lower operational costs 
and continue to provide affordable passenger-carrier transportation 
services.
    According to Lone Star, the transaction will not have an overall 
negative impact on employees. The transaction will enable the parties 
to consolidate some headquarters and administrative personnel. Lone 
Star states that labor force additions in higher paying sales and field 
operations personnel in multiple cities will offset any personnel 
contraction across Texas and Louisiana. Over time, the companies will 
be able to grow by taking advantage of economies of scale, better 
financial terms, and increased buying power, resulting in additions to 
driver and non-driver personnel.
    On the basis of the application, the Board finds that the proposed 
acquisition is consistent with the public interest and should be 
tentatively approved and authorized. If any opposing comments are 
timely filed, these findings will be deemed vacated, and, if a final 
decision cannot be made on the record as developed, a procedural 
schedule will be adopted to reconsider the application. See 49 CFR 
1182.6(c). If no opposing comments are filed by the expiration of the 
comment period, this notice will take effect automatically and will be 
the final Board action.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    Board decisions and notices are available on our Web site at 
WWW.STB.GOV.
    It is ordered:
    1. The proposed transaction is approved and authorized, subject to 
the filing of opposing comments.
    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed as having been vacated.
    3. Notice of this decision will be published in the Federal 
Register.
    4. This notice will be effective July 25, 2017, unless opposing 
comments are filed by July 24, 2017.
    5. A copy of this notice will be served on: (1) The U.S. Department 
of Transportation, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE., Washington, DC 20590; (2) the U.S. Department of 
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW., 
Washington, DC 20530; and (3) the U.S. Department of Transportation, 
Office of the General Counsel, 1200 New Jersey Avenue SE., Washington, 
DC 20590.

    Decided: June 6, 2017.

    By the Board, Board Members Begeman, Elliott, and Miller.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2017-12011 Filed 6-8-17; 8:45 am]
 BILLING CODE 4915-01-P