Most school transport companies in the country cannot guarantee the provision of services until June, the Coach Tourism and Transport Council of Ireland has warned.
A survey by the body showed that soaring fuel prices could now lead to a reduction in services.
The survey offers insight into the crisis affecting the sector.
It says 95% of all school bus companies say it is not commercially viable to continue operating services until June without any government support.
Around 90% of operators need an increase of up to 35% in contractual tariffs to continue operating their services.
Nearly two-thirds of operators have seen fuel costs increase by more than 50% in the past year.
In light of the findings, the council calls on the government to urgently implement a temporary reduction in fuel VAT to 9%, which will help to mitigate soaring costs and safeguard the provision of services to regional commuters .
Around 43% of the members of the representative body identified this measure as their preferred solution.
Council Chairman John Halpenny said: “The pandemic has dealt a severe blow to the commercial bus and coach industry with the low use of public transport, but just as business started to pick up, the impact of the war in Ukraine has led to a spike in fuel prices.
“With these historic price spikes in a short time, school transporters are seriously struggling to provide their services.
“Fuel is a critical expense for the industry and where we are seeing exponential growth in costs, it is clear that government intervention is urgently needed to save the sector from failure.
“To expect the industry to deliver the same schedule for the same price against the backdrop of 50% to 60% fuel increases is frankly unrealistic, unsustainable and totally unaffordable.”
He added: “The government must recognize that there is an existential crisis facing the industry and without appropriate policy intervention, consistency in school transport services cannot be guaranteed.
“There is a workable precedent to these challenges which must be seriously considered to see the industry through this significant setback. Providing a temporary VAT reduction, similar to what has been introduced for the hospitality industry, would represent a crucial lifeline for many operators in school space transportation.”
His comments come asreported last week that the Department for Education and Bus Éireann were monitoring the fuel cost crisis amid fears that some school bus routes could be cut.
This follows a warning from private bus operators that diesel prices are making some school bus routes untenable. Some have warned they may have to back out of contracts.
Others are considering reducing the duration of some school runs, which could leave some children without service.
Roy Kearney, the head of Kearney’s Coaches in Cork, said it was costing his company up to €5,500 a day to keep school buses running on its network of 75 routes.
He said he may have to pull out of the contract within days unless the government takes meaningful action to tackle fuel costs.
School transport is managed by Bus Éireann for the Ministry of Education.
Some 121,400 children, including 15,500 with special educational needs, are transported daily to primary and post-primary schools. The service cost the state more than 289 million euros last year.