Train operator Avanti West Coast has been awarded a new long-term contract, after making 'significant improvements for passengers', the government says.
The announcement comes after the Department for Transport said the operator 'dramatically reduced cancellations' to as low as 1.1% over the past year.
It follows Avanti West Coast being placed on two short-term contracts, after it was ordered to address poor performance on vital routes, including between Manchester, Birmingham and London.
The recovery plan prioritised training new drivers and a recovery timetable was introduced which has seen services increase from 180 trains per day to 264 on weekdays - the highest level in over two years, the government says.
A decision in March to extend the contract was condemned by Labour and trade unions as "rewarding failure".
The new long-term contract starts on 15 October for a core term of three years and a maximum possible term of nine years.
After three years, the Transport Secretary can terminate the contract at any point with three months' notice.
The government says the contract will allow the train operator to plan ahead, prepare advance timetables, roll out new train fleets and continue work to improve services.
Transport Secretary Mark Harper said: "The routes Avanti West Coast operate provide vital connections, and passengers must feel confident that they can rely on the services to get them where they need to be at the right time.
"Over the past year, short-term contracts were necessary to rebuild the timetable and reduce cancellations.
"Now Avanti are back on track, providing long-term certainty for both the operator and passengers will best ensure that improvements continue."
Granada Reports spoke to commuters outside Liverpool Lime Street station
The operator runs trains on the West Coast Main Line between London Euston and Glasgow Central, with branches to Birmingham, North Wales, Liverpool, Manchester and Edinburgh.
It is a joint venture between FirstGroup (70%) and Italian state operator Trenitalia (30%).
Avanti West Coast’s contract is under the West Coast Partnership (WCP), which also involves the company being the shadow operator for HS2.
Avanti West Coast Managing Director Andy Mellors said: “The National Rail Contract for the West Coast Partnership announced today provides stability for customers and colleagues as we continue to rebuild trust as well as confidence.
“Over the last six months, we have delivered significant and sustained improvements in operational performance and customer satisfaction. Cancellations that Avanti West Coast is responsible for have stabilised at below two percent of scheduled services. The last year has been challenging but I would like to thank our customers as well as stakeholders for their patience.
“There are still challenges ahead but plenty to look forward to on our network including customer benefits such as the continued award-winning refurbishment of our Pendolinos and the introduction of our new Hitachi fleet, which will increase capacity and further improve our sustainability credentials.”
FirstGroup chief executive Graham Sutherland said: “Our West Coast Partnership team has worked hard over recent months to deliver improvements for Avanti passengers, including an increase in the number of services in the timetable and high levels of reliability for customers.
“The new National Rail Contract agreed today will allow our team to use its expertise on further improvements.
“These include programmes to refurbish the existing fleet and to introduce new, more environmentally friendly trains, which will encourage more passengers to return to the network and help deliver the UK’s decarbonisation agenda.”
FirstGroup said the deal is a management contract under which the DfT “retains all revenue risk and substantially all cost risk”.
The WCP will earn a fixed annual management fee of £5.1 million, with the opportunity to earn a variable fee of up to £15.8 million per year based on criteria such as punctuality.
Labour’s shadow transport secretary Louise Haigh said: “Passengers who rely on this abysmal service will be appalled that, despite being almost rock bottom of the league table for delays, Avanti is being awarded a lucrative new contract.
“That’s on top of millions of pounds in performance bonuses.
“The only reliable thing about Britain’s railways under the Tories is the waste of taxpayers’ money, which the Government has put into the pockets of shareholders.
“Rather than rewarding failing operators by renewing their contracts, Labour would end this scandal by bringing them back into public ownership as they expire and put passengers first.”
Want more on the issues affecting the North? Our podcast, From the North answers the questions that matter to our region.