The boss of Preston Bus has warned it will be forced to look at cutting routes if the cost of giving pensioners free travel spirals.
Bob Dunn, managing director of the firm, said the operator would need to look at axing some of the heavily-subsidised routes it operates in parts of the city outside of peak hours if it is handed a raw deal.
It is locked in talks with transport authority Lancashire County Council about the amount it gets paid to give bus pass passengers free travel.
Today the politician leading the discussions said he would offer a “fair and affordable” rate for both the taxpayer and the operator.
Mr Dunn said: “The thing the politicians have to be conscious of is if they start capping subsidies and passenger numbers are not growing, something has to give.
“These are difficult times for any business and it is a concern that if the subsidies go at the levels being proposed, it is going to mean certain Sunday services will be discontinued and evening services will not be worth operating.
“I have been in the industry 42 years and I have heard a lot of people say the loss of these types of services will only impact a few people and that is always the case until they are cut.
“What I want is for us to be able to offer the whole package.”
He said the company had already started making major savings with more than £1m invested in new hybrid buses which cut its rising fuel bill by a quarter and looking at quitting its costly depot on Deepdale Road for a modern premises.
Tim Ashton, the county council’s cabinet member for transport, said it was in private talks with bus operators throughout the county about the level of reimbursement it can offer them from March.
He said: “Local transport authorities reimburse bus operators for journeys taken by passengers who have a pass which entitles them to travel free or at a concessionary rate.
“We are currently talking with operators about the rate we will pay them after March 2013 and there is a degree of flexibility which allows for negotiation within the costing formula and process set out by the Department for Transport.
“This nationally-agreed process seeks to ensure that operators are left no better or worse off than they would be if the Department for Transport’s concessionary fare scheme was not in place and we will aim to agree a rate which is fair and affordable to both the council and operators.”