Bankruptcy risk for Bus Éireann by year end

Bus Éireann could go bankrupt before the year end if emergency measures are not introduced, it’s acting chief executive warned.

The company does not currently have enough reserves to bridge anticipated losses this year, Ray Hernan confirmed.

Taoiseach Enda Kenny yesterday called on unions and Bus Éireann to come around the table to resolve the issue saying it could not sorted out in the Dáil by “megaphone politics”.

The Oireachtas Transport Committee heard the struggling company has €7m in reserves but lost between €8m and €9m last year.

It expects similar deficits this year.

Without significant cuts, Mr Hernan said Bus Éireann “will be insolvent before the end of this calendar year,” with the loss of 2,600 jobs.

Bus Éireann, last week, published plans for significant cuts to allowances, premium payments, and temporary staff. In exchange, annual pay rises of between 1% and 3% over four years were promised. But the emergency proposals were roundly rejected by unions.

Mr Hernan yesterday said a “root and branch” review is being completed but Bus Éireann’s finances are so dire a series of measures would have to be implemented.

He said he hoped to “maximise the amount of non-payroll savings we make” but added staff pay, which accounts for 40% of costs, “cannot be ignored”.

The Committee heard that buses’ fitted fuel efficiency systems had not, in fact, switched these cost-saving systems on. “If we save 1% that’s the equivalent of €350,000 a year,” Mr Hernan said.

Transport Minister Shane Ross insisted he will not get involved in the Bus Éireann strike row: “full stop, bottom line”.

He said: “My position is that it is an industrial relations situation. It is not the business of the shareholder to get involved. I would be very concerned at the situation and, of course, I would be concerned about strike action. There are a lot of livelihoods at stake here.”

However, Deputy Mick Barry said workers would lose thousands in pay if the measures already published are introduced. He cited a bus driver friend at a risk of losing €136 weekly due to cuts in double time pay for Sundays and overtime — between €6,500-€7,000 yearly.

Bus Éireann claim much of the losses relate to its Expressway service and have identified a number of routes that may need to be cut or reduced. But Mr Hernan would not give exact details to the committee.

Mr Kenny said nobody wants to see a “vital commercial company” have to withdraw services.

“The way that this can be sorted out is by using the Labour Court,” he said.

Meanwhile, unions representing bus drivers who are funded by the Department of Education went to the Workplace Relations Commission (WRC) seeking a pay increase of around 20%.

After the meeting, Siptu’s Willie Noone said management directly threatened the future of its school bus services.