BUS ÉIREANN HAS said it will continue to operate its Expressway inter-city services but will endeavour to make it “more competitive” in the face of massive financial losses.
It emerged earlier today that the bus firm has been advised by a consultancy firm that the closure of the commercial arm is necessary to stave off current challenges.
A confidential report prepared by firm Grant Thornton has suggested that the loss of the services would be a necessary evil in order to maintain the national bus carrier’s viability.
Expressway is the commercial arm of the state-owned company, which has been experiencing diminishing returns in the face of competition from private operators across Ireland in recent years.
In a statement this evening chief executive Ray Hernan said, “Expressway will continue to be a part of Bus Éireann and that the challenges to make it more competitive will only be resolved within the overall company structure.”
He added that decisive actions need to be taken to reverse losses, reiterating that the company is facing insolvency in the next 18 months.
Briefing staff today, he confirmed that forecasted losses for 2016 are now estimated at €8 million. The company incurred losses of €5.6 million in 2015.
His message to staff was: “Collectively we cannot allow this trend to continue.”
Speaking to TheJournal.ie, National Bus and Rail Union (NBRU) general secretary Dermot O’Leary said he was “alarmed” by the Grant Thornton report, but added that the situation is not one his union “can solve on our own”.
“There are 516 jobs under threat here, and it would appear that the preferred option is to exit the inter-city market completely,” he said.
That’s 23 routes that could go, and it’s something that would really affect rural Ireland because these services aren’t being provided elsewhere.
O’Leary said that the concentration of services on motorway routes around the country “is going to drive down the whole network”.
“If you were to draw a line from Letterkenny to Athlone and on to Tralee, the vast majority of the services on those routes are public, not commercial. If they’re not run those communities will suffer,” he said, while bemoaning the “hands off approach” to date of the Department of Transport.
“The Department has a direct role to play,” said O’Leary. “Certainly we can not solve this on our own.”
In tonight’s statement, Hernan said change is “required across the entire company to ensure it can compete in an increasingly competitive marketplace, which is more customer focused”.
Operational efficiencies and a sharp focus on cost drivers will form part of this, along with initiatives to deliver savings that will be announced shortly and activated without delay.
Yesterday it was reported that Bus Éireann has just 18 months to avoid financial ruin, just one month after Transport Minister Shane Ross had suggested that it could become insolvent within two years.
Hernan told staff today that while the change process will be “challenging” but he believed the company “can have a secure future if it adapts to customer needs and the competitive landscape”.
With reporting by Sinéad O’Carroll