I think the 5.9 is a fine engine.. and you can turn up the pump on it some to get some extra power.. i will say that the electronic transmissions do much better wit helectronic engines.. however there are PLENTY of resources for swapping an allison 1000 / 2000 series into a 12 valve. on ANY school bus the MPG willl likely go down the faster you go..
so let me go on to say what *I* would do if it were my bus..
personally i would build and swap in a 6 speed 4th gen allison 1000.. yes it would be expensive.. (I did this in my red international with a 73).. I had a transmission custom built and boiught a harness and Tuneable TCM to dial it in..
CAC (Custom Automatic Conversions) specializes in making bits and parts for doing 12 valve to allison 1000 swaps..
when i got mine, CAC used Suncoast to build the transmissions, not sure who they use now.. may be the same.. ive had Zero issues out of the transmission 4 and a half years in..
to do a 1000 swap you will need:
Allison 1000 6 speed with SAE3 Bell / Tail.
4th Gen TCM and wire harness.
Throttle Box to mount to your pump or throttle pedal which tells the transmission how much throttle you are giving the engine.
if you are hydraulic brake you'll need a park brake assembly (or modify the one from your 545).
doing this allows you to keep your low ratio rear end and maintain the ability for devently quick take-offs and hill climbs in lower gears.. yet drop RPMs on the higher gears for highway cruise.. the overdrive in 5th is 0.71 and in 6th is 0.61
I would then bump the pump on the 5.9 for a few more horsepower.. there are numerous resources for doing minor HP boosts on 12 valve engines.. they are popular..
you can also look for used parts out there or a donor bus if you have lots of time and space to tear apart a second bus.. or want to piece things together from various sources..
again alot depends on your future for the bus.. if its a design for one epic road trip around the country and then just weekend jaunts to the lake after then id probably travel the back-roads at 55 and put a little more fuel in. if its a rig you plan to keep for years and take on multiple many-mile trips then id do the build described to make it a true cruiser.. in my case it was worth the $$ and effort to build because for one, 6 window shorty busses are hard t ocome by, and two, I planed on (and have) driven that bus all over creation... Covid has slowed me down a little but im getting back int othe road trip game again with both busses...
The RedByrd is a highway Cruiser!