State-owned transport company Bus Éireann would face a financial impact of more than €20 million on its balance sheet over five years if five routes, under review, were left unchanged, external consultants have advised.
The Irish Times reported on Monday that a review was under way on the viability of Expressway routes operated by the company.
The Expressway services are run on a fully commercial basis by the company and do not receive financial support from the exchequer. In many cases, such services face competition on the routes from private-sector rivals.
Informed sources said that while all Expressway routes were under review, a number of services in particular were being examined.
Routes under specific examination are from Dublin to Wexford, Dublin to Waterford, Limerick to Tralee and Killarney, Rosslare to Waterford and Tralee, as well as Galway to Ballina.
Analysis of Expressway routes carried out by consultants Grant Thornton for the company found that if these services continued unchanged, there would be a negative impact of €20.58 million on its five-year combined Ebitda [earnings before interest, tax, depreciation, and amortisation] on the routes.
The report suggests that if the services were changed or “optimised”, the negative financial impact would be about €8.2 million over five years.
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It suggested that closing four of the routes and ending the Rosslare to Waterford segment of the Rosslare to Tralee route would have a positive financial impact of about €1.38 million after the first year.
Informed sources have suggested that the route most at risk is the Dublin to Waterford service, on which Bus Éireann faces competition from Irish Rail and other operators.
Sources suggested that the Rosslare to Waterford section of the service to Tralee could also be in jeopardy.
The existing route from Dublin to Wexford could be extended to serve Waterford as an alternative to closure. However, the consultants estimated that merging the Dublin to Wexford and the Dublin to Waterford services and exiting from the existing segment of the route serving Mullinavat to Thomastown and Carlow would lead to a 100 per cent reduction in revenue.
The consultants suggested that the Ballina to Galway route could be extended southbound to serve Shannon Airport and Limerick. They said such a move could lead to a 31 per cent rise in revenue.
Details of the review were set out in a letter sent by the chairman of the overall CIÉ transport group Aidan Murphy to Minister for Transport Darragh O’Brien in September.
In his letter, Mr Murphy said: “While significant challenges remain for the Expressway business, there have been some positive developments to address this, including an agreement with the National Transport Authority to revise the overhead allocation methodology.
“Further discussions are under way regarding route viability to ensure the long-term sustainability of this business.”
Bus Éireann declined to comment on the review of route viability.
In September 2020, Bus Éireann announced that it would discontinue Expressway services between Dublin and Cork, Galway, and Limerick. At the time, the company said these routes were loss-making and that it had taken the decision to end these commercial services to protect the core operations, which the Government supported under the public service obligation system.