Bus Éireann has told unions that it is seeking annual cost savings of €20m, with €9m coming from payroll savings.

While it is not seeking redundancies or cuts in basic pay at present, it says that this is conditional on the implementation of a significant package of cost reductions to employees' terms and conditions.

At this morning’s meeting, management presented a five-year plan aimed at reducing the company's deficit to €5m this year, and returning it to profitability next year.

The company warns that without these measures, Bus Éireann faces potential annual losses of €16m.

While the company is not actively seeking additional redundancies, its voluntary severance scheme will remain in place for 12 months at the discretion of the company.

However, it notes that funding for voluntary severance is problematic given the deteriorating financial situation.

Bus Éireann also wants clerical and executive employees to increase their working week from 36 hours to 39.

In addition, annual leave for all staff will be cut by three days for the next three years, while sick pay entitlements, overtime, shift and premium payments will all be reduced.

New recruits will also start on lower wage rates.

Bus Éireann also wants unions to agree to new outsourcing arrangements and redeployment both between departments and geographical areas without compensation.

The company intends to introduce these measures from 13 August.

Despite reducing its cost base by €30m since 2009, it has come under pressure from the 20% fall in passenger numbers, competition from new operators on intercity routes, higher fuel costs and a €25m cut in Government subvention over the last three years.

Iarnród Éireann staff are currently balloting on a package of cost reduction measures including 450 redundancies, while Dublin Bus management and unions will meet on Friday for similar cost reduction negotiations.