Virgin Trains says it has put the events of 2012 behind it after being awarded an extension to run trains on the West Coast main line until 2017.
The contract extension is the sixth direct award to be handed out by the Department for Transport (DfT) since publishing its revised franchise schedule in March 2013.
Virgin has committed delivering a series of service improvements by April 2017 at which point a new long-term franchise is expected to begin.
Virgin will now start work to secure new direct services between Shrewsbury, Blackpool and London from December.
The DfT estimates that the new contract will bring £35 million worth of benefits to passengers.
Improvements will include installing free Wi-Fi at stations and improving connectivity across its fleet. There will be further investment improving the interiors of Virgin’s Pendolino fleet and modernising stations along the route.
Transport Secretary Patrick McLoughlin said: “This deal will provide thousands more seats and better journeys for the tens of thousands of passengers who use these services every day.
“The West Coast provides a vital artery between London and Scotland and it is crucial we do everything we can to improve services on this much-used route.
“This is further proof of our commitment to get the best deal for passengers and taxpayers with Virgin set to pay more than £430 million to run the franchise.”
Patrick McCall, Virgin Trains executive co-chairman, said: “We’re delighted to have reached a deal after some tough negotiations with the DfT. It puts the problems of 2012 firmly behind us, and shows the clear benefits of a well-run franchise system.
“This deal is great news for passengers and taxpayers, with significant benefits for our customers as well as a big increase in the money we pay to government.”