Stagecoach defends its tour bus firm over lawsuit

published 12 December 2012

Stagecoach Group has lashed out at the federal and New York State government for initiating legal proceedings against its tour company Twin America over claims it has been 'anticompetitive'.

Twin America - a joint venture between Stagecoach North American and City Sights - was formed in 2009 by the merger of companies, City Sights and Gray Line New York, which operate sightseeing bus tours in New York City.

The government has accused the company of being a monopoly and eliminating competition.

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Stagecoach, which owns 50% of the voting rights and 60% of the economic rights of the venture, said it was disappointed at the view taken by authorities.

"New York has a vibrant and highly competitive tourist attraction market," the company said in a statement.

"Moreover, since the joint venture was formed in 2009, the sightseeing bus industry has become even more competitive as new sightseeing bus operators have commenced business in New York and other companies have announced firm plans to do so shortly. Stagecoach North America, City Sights and Twin America disagree with the position of the Department of Justice and the New York Attorney General and believe their action is unnecessary."

The company serves about two million tourists a year and makes about $100m in revenue a year, Attorney General Eric Schneiderman said in a statement.

The attorney general said the lawsuit was an important step towards restoring competition and protecting tourists from being overcharged.

"The iconic double-decker Gray Line and City Sights buses are seen all over New York City, but few people know they are run as a monopoly," he said.

However, Stagecoach, which has a market capitalisation of £1.74bn, insists Twin American and the joint venture parties have continued to work with authorities and the hike in prices in 2009 were a reflection of increased labour, fuel and other costs.

Twin America and the joint venture parties plan to defend their position and take action to protect their interests, Stagecoach added.