Dublin Bus and Bus Eireann may have to cancel routes, withdraw buses and lay off workers to stay in business, it was claimed today.
Labour TD Tommy Broughan told the Dail the cutbacks could involve the total loss of 190 Dublin Bus and Bus Eireann routes and the withdrawal of 270 vehicles.
Up to 400 redundancies were also being considered by CIE in order to remain viable, Mr Broughan claimed.
However Transport Minister Noel Dempsey said consultants were currently carrying out a cost and efficiency review of the state transport firm and no decisions have been made on reducing services or fleets.
He said CIE will be given 312 million euro state subvention in 2009, an increase 1.5 per cent on 2008.
The firm reported a 39.5m euro operating deficit for 2008 mainly due to loss of revenue owing to a drop in demand for services and increased fuel costs.
"The outlook for 2009 is for a further deterioration in the Group's financial situation in the absence of corrective measures," Mr Dempsey told the Dail.
"The firm is considering increasing fares and streamlining services including reducing frequencies of some routes or complete withdrawals."
He added: "There needs to be rationalisation within Dublin Bus — that is clear. A lot of services can be saved if that rationalisation goes ahead."
The Government has already agreed an increase in fares in 2009 and 5m euro extra in compensation for discharging its public service remit.
"It is a matter for the CIE group to secure the operational efficiencies and to reduce costs so to maintain services at the highest level possible," added Mr Dempsey.
"Service reductions should be the last resort in efforts to maintain financial stability," he added.
Mr Dempsey said CIE was suffering from the economic recession like every other business in the country.
"At a basic level, there are less people using the bus or the train. We have given an increase in the subvention and the fares and it is up to the CIE companies to work within this to maintain and grow their services. We can't give any more money from the taxpayer."