Bus Éireann in crisis

Bus Éireann VWL301 (12 C 3493), a Wright Eclipse 2-bodied Volvo B7RLE, in Dundalk where consultants have recommended that the existing depot is closed. PAUL SAVAGE

Trade unions have called an indefinite strike at Ireland’s state-owned Bus Éireann after the company began implementing a cost-cutting campaign that may lead to a drastic restructure of its loss-making Expressway long distance coach services. Losses are projected to exceed 8million (£6.9million) this year.

Chief executive officer Martin Nolan has stepped down a year early, his place taken on an acting basis by Ray Hernan, former CEO of the Arnotts retail chain and one-time finance director of Ryanair

Hernan has told staff that the company faces a ‘very real’ risk of becoming insolvent within 18 months, having lost 5.6million (£4.8million) in 2015 and an estimated 6million (£5.1million) last year and says that the opening of the market for Public Service Obligation routes to competitive tender, intense commercial competition on Expressway routes and European Union requirements for tendering of contracts means that it must become more efficient to retain and win future business.

He says the company ‘will do whatever is necessary’ to secure a sustainable future and has imposed an immediate clampdown on discretionary expenditure.

No unplanned hiring in of buses will be sanctioned and any unapproved unplanned bus hire will not be paid. There is a general ban on unplanned or unrostered overtime, including rest day working by any staff. Nor will it fill in for absenteeism. Staff are no longer permitted to carry over untaken annual leave into the next year and clerical staff are no longer permitted to work flexitime, reverting to 09.00 to 17.15 on four weekdays and 09.00 to 17.00 on Fridays.

Much of the focus of action is likely to fall on Expressway, which has lost market share to new players that include Comfort Del Groowned City link and First’s Aircoach subsidiary.

A report from the Grant Thornton consultancy identified six routes out of Dublin that are unprofitable, these being to Belfast, Derry-Londonderry, Galway, Cork, Limerick and Waterford.

It identified three options for Bus Éireann: do nothing, restructure Expressway or close it altogether. It recommended complete closure, with up to 516 redundancies, as the most cost effective measure, but the company appears more likely to opt for a major restructure, perhaps moving on to the National Express model of subcontracting the operation to private operators rather than providing the bulk of journeys with its own staff and vehicles.

A separate study by the Steer Davies Gleave consultancy identified variations in efficiency, overtime and maintenance costs across the depot network, which it attributed to different customs and working practices, and suggested that some depots in need of major building works could be closed. Dundalk and Limerick depots require 8million worth of work and SDG recommends closing Dundalk and relocating the Limerick depot to the city’s bus station when it is rebuilt.

Unions have called an indefinite strike from 20 February and have threatened to extend action to sister companies Dublin Bus and Irish Rail. The Unite union wants the company to withdraw the threatened cuts to allow talks to take place.

Hernan has invited the unions to offer alternative proposals to achieve required savings of 30million (£26million).