Bus Éireann has confirmed the company is facing insolvency within 18 months unless “decisive actions” are taken to reverse losses.

The transport provider’s acting Chief Executive Ray Hernan has told staff the company is facing forecasted losses of €8m for 2016 and warned that, “collectively we cannot allow this trend to continue.”

The company has reportedly signed off on a new survival plan, drawn up by financial consultants, Grant Thornton which could lead to route cuts, job losses and lower pay for new recruits.

Mr Hernan said change is required across the entire company to ensure it can compete in “an increasingly competitive marketplace, which is more customer focused.”

He told staff members that the change process will be “challenging” with initiatives to deliver savings expected to be announced shortly and “activated without delay.”

The initiatives will target operational efficiencies with “a sharp focus on cost drivers.”

He moved to placate fears that the company would shut down large swathes of its Expressway rural bus routes and confirmed that, “Expressway will continue to be a part of Bus Éireann.”

He added that the challenges to making the Expressway service more competitive, “will only be resolved within the overall company structure.”

He said the company has a “proud heritage and can have a secure future, if it adapts to customer needs and the competitive landscape.”

SIPTU reaction

The Services Industrial Professional and Technical Union (SIPTU) has called on the government to step in and support the bus network and its staff and called it “abhorrent” that details of the Grant Thornton plan had been leaked to the media before being presented to workers unions.

“It is disgraceful that the contents of this report and resultant plan, which is causing great concern to employees, are being widely commented on while the trade unions who represent these workers have not been presented with any of their details,” said SIPTU Sector Organiser, Willie Noone.

“Our members in Bus Éireann will fight these outrageous proposals in order to protect jobs and public bus services,” he said. “In this struggle, they are expecting the full support of elected representatives whose constituents depend on the services our members provide.

“Bus Éireann workers are also demanding that the company’s management start talking to their employees rather than just the media.”

National Transport Authority

Earlier, the National Transport Authority (NTA) said claims the authority was to blame for Bus Éireann’s difficulties, "simply do not stand up to scrutiny."

Tim Gaston, NTA Director of Public Transport Services said it was the duty of the authority to ensure that people in all parts of the country have access to a safe, reliable and value-for-money public transport system. 

"If it is the case that some Expressway services are discontinued at local level, NTA will, as our track record proves, step in and ensure that local demands for public transport are met", he said. "We will not leave any rural communities behind."

“In any case, over 80% of Bus Éireann passengers travel on their subsidised services - which are under no threat whatsoever - with just 19% using their commercial services such as Expressway.”

Political opposition

Sinn Féin Spokesperson for Transport Imelda Munster said there needs to be immediate engagement between the government, NTA, Bus Éireann and trade unions to find a resolution to the crisis “as a matter of urgency.”

“There is no reason for the Minister or the government to refuse to allow such engagement with all of the stakeholders involved in order to preserve, protect and enhance our public transport network services - that is unless their long term plan is to privatise our public transport network,” she said.

“Public transport is not always profit making, it is about providing a hugely important public service.”

She said it is “clear as day that market saturation has created this crisis” and accused the Department of Transport and the NTA of allowing private operators to “cherry pick and cream off the most profitable routes” while Bus Éireann is left with the least profitable options.

Yesterday Fianna Fail’s transport spokesperson Robert Troy accused the Minister of Transport of being “oblivious” to the problems facing the operator and called on him to outline his plans for overcoming them.