Acadian Coach Lines is refusing an offer from the Amalgamated Transit Union to enter into binding interest arbitration, a process that could have ended the two-week-old lockout.

Sylvain Langis, the president and chief executive officer of Groupe Orléans Express, issued a statement on Friday morning rejecting the union's offer.

"While binding interest arbitration may seem like a reasonable solution at first glance, it is not a solution if ATU is still not willing to address the work assignment issue. That is a crucial element of our plan to achieve long-term viability," Langis said in a statement.

"That is why we cannot agree to binding arbitration; we simply cannot risk achieving a result that will mean an increase in financial losses."

Glen Carr, president of the Amalgamated Transit Union local 1229, said giving in on work assignment would jeopardize his members' job security.

"They're gonna be able to pick and choose who does the work over top of somebody who's been here longer. What that does, it ends up affecting our seniority."

Company spokesman Marc-Andre Varin said binding interest arbitration might not give the company the changes it needs to become profitable.

"We're going to probably end up with a short term solution and everybody is going to be back to work," Varin said. "But we don't believe from what we're hearing, that it's going to allow us to insure the long-term viability of the operation in New Brunswick."

Carr said if Acadian can't make money on the New Brunswick/P.E.I. route, it should sell out to a company that can and get inter-city bus service back to the regions.

Finances

Acadian Coach Lines said its New Brunswick operations are not profitable because of its large size and low population density.

The company said its operating costs are fixed and not adjusted to customer demand.

Selling costs are partly fixed and partly variable, which the company says is difficult when sales decline.

Fuel prices are higher in Maritimes, prices not seen since 2008, when revenue they say was 31 per cent higher

Since 2004 when it was purchased by Orleans Express, the company said it has lost $1.9 million.

The ATU had indicated it was willing to enter into binding interest arbitration to resolve the situation.

The union said all 59 employees in New Brunswick and Prince Edward Island would immediately return to work and await the arbitrator's decision.

Drivers, maintenance workers and customer service representatives were locked out by Acadian Lines on Dec. 2.

Langis said the company regrets the contract dispute but said in a statement it is important that the company's financial losses are corrected.

"We are seeking crucial changes to the work organization and driver assignments, specifically looking for increases in productivity that will help us reduce our financial losses," Langis said.

"We know that these gains alone will not allow us to reach profitability but they are an important component of an overall effort we need to do collectively to turn things around if we hope to keep offering this important service in New Brunswick and Prince Edward Island."

Talks had previously broken down in October and workers voted 98 per cent in favour of strike action.

At that time, the company was offering a contract that was worth zero per cent over the next five years, according to Carr.

The union wants at least a cost-of-living increase, he has said.

The company presented a last-minute contract offer to the union on Nov. 25. Workers voted 88 per cent against the deal.

Acadian Coach Lines still runs in Nova Scotia because the company's employees in that province are part of a different union.