Minister for Transport Leo Varadkar has said that he cannot rule out increases in fares on CIÉ buses and trains.

The Government announced yesterday that it is to increase its subvention to CIÉ by €36m this year.

Mr Varadkar said there was a need to be very sensitive about fare increases.

Fares had already gone up this year and there were increases planned for 2013 and 2014, but there were no immediate plans to implement those increases, he added.

The minister said there was some evidence that higher fares lead to a reduction in the number of people travelling.

Speaking on RTÉ's Morning Ireland, Mr Varadkar said the monopoly contracts for Bus Éireann and Dublin Bus were up for renewal in 2015.

He said the Government would be considering opening up some of the routes to the private sector.

Mr Varadkar also said the Government would not be making any decision on its response to Ryanair's latest bid for Aer Lingus until at least September.