Feds had eye on Sky Express before Tuesday's deadly bus crash

The US Department of Transportation on Wednesday shut down the Sky Express "China Town" carrier involved in a deadly bus crash in Virginia this week, citing the bus line's long record of safety violations, including the use of fatigued drivers.

Regulators moved quickly against North Carolina-based Sky Express for a reason: They had already begun work to suspend operations at Sky Express, which had racked up dozens of citations and had been involved in several recent crashes. Driver fatigue has been implicated in the 5:30 a.m. crash Tuesday, which occurred when a New York City-bound Sky Express bus veered off I-95 near Fredericksburg, Va., and flipped, killing four and injuring 50.

Suspending Sky Express operations "was something that had been in the works, had been planned, but unfortunately it was a day late and a dollar short," says Pete Pantuso, president of the American Bus Association (ABA), who receives regular policy updates from federal regulators.

The Department of Transportation revealed Wednesday that, before the crash, it had given the company time to appeal an unsatisfactory safety rating. Had the appeal not been granted, the carrier's permission to operate would have been revoked. Transportation Secretary Ray LaHood says he is directing the department to end its practice of extending appeals periods for operators found to be unsafe, according to the Associated Press.

Four deadly crashes in 2011 involving cut-rate regional bus carriers, including Tuesday's crash and one that killed 15 people near the Bronx in March, probably means "a critical mass has been hit, where we'll see a flushing out of the business and [where] more capitalized people will expand into markets that were marginal before," says George Hofer, a transportation economist at the University of Richmond, located near Tuesday's crash site.

"What's happening in the bus industry is the epitome of what should have happened with deregulation, but when it comes to safety regulations, clearly the wheels of government don't turn fast enough," adds Professor Hofer. "This is a failure not of economic regulation, but of safety regulation."

The boom in regional bus lines serves both upscale riders in the Northeast and poorer riders shuttling from the South to major cities along the northern Atlantic Coast. They got the nickname China Town carriers because the first successful lines started off with service between China Town in Boston and China Town in New York City.

In 1984, Washington deregulated the bus industry because too many carriers were filing for bankruptcy. Twenty years later, the intercity bus system has its mojo back, thanks in large part to low-rate carriers that restored some of the utility and romance of bus travel, all at an affordable cost, transportation experts say.

In the past three years, intercity bus ridership has been growing at an eye-popping 10 percent a year, at a time when auto and airline travel have declined. The 4,000 US bus carriers benefit the environment, reducing total annual US carbon emissions by 30,000 tons – about the weight of a cruise ship. The explosion of low-cost regional bus carriers has spurred innovation in what was once a moribund industry, with Greyhound, for example, launching its low-cost, high-service Bolt line from Washington, its business model ripped neatly from the pages of the "China Town" bus lines.

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