Virgin Rail has lost its contract to operate the West Coast Mainline to rival FirstGroup rail minister Theresa Villiers has confirmed.
FirstGroup will create a new company, First West Coast, to operator the ‘InterCity West Coast’ franchise.
The franchise joins Great Western and ScotRail in the FirstGroup portfolio.
As part of the deal First West Coast will introduce 11 new six-car electric trains which will enable more seats to be provided across the franchise, including greater capacity on the Birmingham to Scotland route.
New services are planned from Blackpool, Telford, Shrewsbury and Bolton to London.
First West Coast has also committed to cut the cost of its ‘Standard Anytime’ fares by an average of 15 per cent within the first two years.
However, unions and rail campaigners have argued jobs will be cut and catering services will be cut back as costs are cut.
FirstGroup chief executive Tim O’Toole said: “Our bid also delivers value for taxpayers by returning premiums to the government underpinned by sustainable growth in passenger numbers and revenues from the utilisation of significant available capacity.”
The franchise stretches from London to Glasgow, connecting many of the UK’s major cities including Manchester, Liverpool, Birmingham, Wolverhampton, Edinburgh, Lancaster and Chester.
The franchise deal is worth £5.5 billion (net present value) over the lifetime of the contract.
Villiers said: “This new franchise will deliver big improvements for passengers, with more seats and plans for more services.
“Targets to meet on passenger satisfaction will be introduced for the first time in an InterCity rail franchise and passengers will also benefit from smart ticketing and from investment in stations.”
Richard Branson, whose Virgin Rail has operated the franchise since 1997, said the loss of the franchise was “very disappointing news”.