Rail Users Ireland Forum - View Single Post - CIE given €36m extra funding to protect public transport

Thomas J Stamp · 25-07-2012, 12:55

Its an insteresting situation. The minister has cut the subsidy and was intent on further cutting it. Note, this is one of the lowest public transport subsidies in Europe and is probably directly the reason why prople give out about their lousy bus service. Anyway, cutting the sub means, in effect, running the service out of the fare box. Is that in any way possible? No, its not. Not unless there is a massive round of cost cutting. In effect, if you are to phase out the sub you have to, gradually, bring in €280 million in cuts. Even if the sub was to be reduced in half - €140 million. Where can you do that without impacting on services?

Minister Leo was on Morning Ireland today and he seemed to suggest that the 5% rise of fares this year had produced a bigger knock on than had been projected. Someone in CIE/DoT in the financial planning department may be in for a kick in the backside.

What we do not know is what part of this money is heading to the Rail Company. There has been rumours about the bus company, and in particular, BAC, running out of cash. As Mark says, passenger numbers have held up in IE, and fares are higher, so it proabably isnt IE this time, although the need to find the cash to make savings in IE has hit the CIE accounts head on.

What this does show, however, is that it does not take long in raising fares/cutting the subsidy to wash away the topsoil of the company and hit the bedrock. Fares going up will drive more punters away, cutting the sub will hit services and drive punters away increasing losses and a need for more sub, which will not happen, and so we are into a perfect storm.

What has to happen is for all of CIE to try and sell every single seat as often as it can. It is not doign this, but it must find a way to do it. Being a state company it doesnt seem to have the marketing imagination of a Ryanair. Even if an early morning seat is €1, its still one euro more then not being sold at all. Yes, I am aware of the webfares promotions. The thing is - how many out there are not aware of them???

25-07-2012, 12:55	#5
Thomas J Stamp Chairman/Publicity Join Date: Dec 2005 Location: The Home of Hurling Posts: 2,708	Its an insteresting situation. The minister has cut the subsidy and was intent on further cutting it. Note, this is one of the lowest public transport subsidies in Europe and is probably directly the reason why prople give out about their lousy bus service. Anyway, cutting the sub means, in effect, running the service out of the fare box. Is that in any way possible? No, its not. Not unless there is a massive round of cost cutting. In effect, if you are to phase out the sub you have to, gradually, bring in €280 million in cuts. Even if the sub was to be reduced in half - €140 million. Where can you do that without impacting on services? Minister Leo was on Morning Ireland today and he seemed to suggest that the 5% rise of fares this year had produced a bigger knock on than had been projected. Someone in CIE/DoT in the financial planning department may be in for a kick in the backside. What we do not know is what part of this money is heading to the Rail Company. There has been rumours about the bus company, and in particular, BAC, running out of cash. As Mark says, passenger numbers have held up in IE, and fares are higher, so it proabably isnt IE this time, although the need to find the cash to make savings in IE has hit the CIE accounts head on. What this does show, however, is that it does not take long in raising fares/cutting the subsidy to wash away the topsoil of the company and hit the bedrock. Fares going up will drive more punters away, cutting the sub will hit services and drive punters away increasing losses and a need for more sub, which will not happen, and so we are into a perfect storm. What has to happen is for all of CIE to try and sell every single seat as often as it can. It is not doign this, but it must find a way to do it. Being a state company it doesnt seem to have the marketing imagination of a Ryanair. Even if an early morning seat is €1, its still one euro more then not being sold at all. Yes, I am aware of the webfares promotions. The thing is - how many out there are not aware of them??? __________________ We are the passengers