Fares across a range of public transport are set to increase and there will be a reduction in services, according to Minister for Transport Leo Vardakar.
Mr Varadkar said with passenger numbers falling and a big pension deficit in CIÉ, the company is losing money and Government subsidies of €700 million per annum will have to be reduced over the coming years.
He said the company faces big challenges in the years ahead to bring costs down to 2005 levels.
"There will probably have to be some level of fare increases unfortunately and there is going to have to be some reduction in services," Mr Varadkar told RTÉ's Morning Ireland.
The level of fare increases has yet to be determined but will depend on cost reductions and getting more people to use public transport he added.
Yesterday, the Minister named four new chairs of CIÉ and its constituent companies. Vivienne Jupp takes over at CIÉ while Kevin Bonner (Dublin Bus), Paul Mallee (Bus Éireann) and Phil Gaffney (Iarnród Éireann) fill the other roles.
The Minister said over the next few months the new chairpersons will make some changes to the boards and begin the process of cost reductions.
Mr Varadkar also denied he had plans to privatise any part of CIÉ saying it is not on the “Government’s agenda”.
And he said he would be naming a new chairperson for the Dublin Airport Authority in the coming months.