Stagecoach joint venture is a sight for sore eyes in NY

Published on Wednesday 18 March 2009 19:14

STAGECOACH has entered a joint venture that will create one of the biggest sightseeing bus operators in New York.

The Perth-based transport group is to combine the sightseeing services of its existing Gray Line New York business with CitySights NY.

The Scots firm will gain the lion's share of the joint venture, holding 60 per cent of the equity and 50 per cent of the voting rights. It is placing assets worth some $22.5 million (16.2m) into the JV.

Bringing the two businesses together will "enhance the value of the tours", reduce congestion at traffic hotspots and allow some cost savings, Stagecoach added.

The move comes as the sightseeing market in the "Big Apple" is hit by a fall in tourist numbers amid the economic slowdown.

Part of Stagecoach's North American division, Gray Line New York contributed $17.3m to the group's 2008 operating profit. For the year to 31 January, CitySights generated operating profits of $8.7m.

The new venture, called Twin America, is expected to take to the road at the end of this month, although the Gray Line and CitySights brands will continue to be used.

Stagecoach chief executive Brian Souter said: "We are delighted to have created a partnership of two powerful brands that will be the leading provider of sightseeing services in New York.

"Both businesses will also benefit from a number of synergies, which will make our collective operations more efficient and give us a strong platform for the future."

Stagecoach's bus and coach operations are proving more resilient than some to the recession.

Earlier this week, the group said revenues at the North American bus division, including Megabus.com, rose 6.8 per cent in the 44 weeks to 1 March.