Virgin boss Sir Richard Branson said he was “devastated” Virgin Trains had been dumped from the West Coast Main Line in favour of a part foreign state-run operation.
The Department for Transport (DfT) has announced from December 8 rail services on the west coast will be run in a joint venture between Aberdeen-based FirstGroup and Italian-owned train operator Trenitalia.
From December around 61 per cent of all British rail journeys will be on foreign-owned services.
Sir Richard said he was “proud” to have run the rail services for more than two decades.
“The recent period of uncertainty has been challenging for everyone at Virgin Trains, but I am so very proud of how hard they have all worked to maintain our high standards of customer experience during this time,” he said.
Virgin Trains is embroiled in a legal battle with the DfT over a decision to disqualify its bid to continue running the line due to a fight over pensions.
First Trenitalia will pay the Treasury £1.6 billion in premiums to run West Coast services until 2026.
As part of the deal it will operate 263 additional weekly services every week from December 2022 and is expected to double the number of direct trains between London and Liverpool.
Transport Secretary Grant Shapps said the new agreement can deliver “fundamental reform to a flawed system”.
“This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway,” he said.
Shadow transport secretary Andy McDonald said it was time for the railways to be brought into public ownership so they are “run in the interests of passengers instead of ripping them off.”