Minister for Transport Shane Ross has given a stark briefing to his Cabinet colleagues on the financial position of Bus Éireann.
He said the company was at a crisis point and if it continued as it was going it could become insolvent within two years.
Bus Éireann lost €5.6 million last year and is expecting similar losses this year, mainly due to the Expressway service.
As management and unions attended the Labour Court to address a union pay claim of up to 21%, Mr Ross said the company could not afford pay rises.
The Labour Court is not expected to make a recommendation after today's hearing, because the management negotiators were unable to engage on the pay claim in isolation from other cost reduction measures.
They are expected to revert to unions with proposals by the end of January.
Union sources accused the company of thumbing their noses at the Labour Court, adding that they will be meeting members over the coming days to assess their reaction.
Today it also emerged that the company has recruited new executives to the management team in a bid to address the financial difficulties.
The new Chief Financial Officer is Ray Hernon, who previously worked for Ryanair, Arnotts and Brown Thomas.
The chief Human Resources Officer Joe Kenny, who was expected to represent the management at the Labour Court, has left the company after over 30 years of service with the CIÉ group.
The changes were announced in bulletins from Bus Éireann CEO Martin Nolan, who said Mr Kenny was leaving to pursue other interests.
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