LV transportation operator in bankruptcy

Friday, Oct. 19, 2001 | 10:23 a.m.

VecTour Inc., a ground transportation company with 65 vehicles and 100 employees in Las Vegas, has filed for Chapter 11 bankruptcy protection in Wilmington, Del.

Company officials said the bankruptcy is a reorganization and operations in Las Vegas would not be affected. There have been no layoffs, but employees have had their hours cut.

Jim Gleich, senior vice president of the West Region of VecTour in Las Vegas, said much of the local fleet has been parked because of a 40 percent drop in business since the terrorist actions of Sept. 11 cut deeply into the travel industry.

Gleich explained that drivers, who get paid an hourly wage when they work, have been placed in a rotation that has cut the average work week from between five and six days to three.

Hourly office employees in accounting, dispatch and sales have been cut from a five-day to a four-day work week.

Gleich said business is expected to pick up in the last 10 days of the month, but it's forecast to be slow again in November. He doesn't expect employee hours to resume to normal until early next year.

VecTour, which operates convention and local charters and fills ground transportation needs for corporate meetings, is dependent on the local convention and trade show industry for customers.

The Las Vegas Convention and Visitors Authority said 261 conventions, trade shows and meetings have either been canceled or postponed since the Sept. 11 terrorist attacks that have resulted in reduced travel by business people and tourists.

Also, representatives of Comdex, the giant computer exhibition scheduled in November, have said attendance at this year's show is expected to be off 15 percent to 25 percent, or by up to 50,000 people.

VecTour, headquartered in Blue Bell, Pa., has 15 transportation operations nationwide. Company management blamed the economic fallout of the terrorist attacks for its decision to file for bankruptcy earlier this week.

"Four of VecTour's primary lines of business -- airport transportation, sightseeing tours, cruise line transportation and conventions and charters -- experienced immediate 25 percent to 50 percent drops in revenue after Sept. 11," the company said in a statement issued Tuesday.

The company said it would enter into a $5 million debtor-in-possession financing with its existing bank group, led by ING Capital LLC, to continue operating through the reorganization.

VecTour is the nation's largest privately owned ground transportation company and the third largest overall, with fiscal year 2001 revenues of $122 million. Locally, the company is based on Cheyenne Avenue near Las Vegas Boulevard.

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