It marks a remarkable turnaround for the firm, which a year ago was threatened with being axed from the UK’s flagship West Coast Main Line after its services descended into chaos in the summer of 2022, when up to one in four trains were cancelled due to driver shortages.
Transport Secretary Mark Harper announced on Tuesday that Avanti’s contract, which was due to expire next month after two six-month extensions, would run for three more years – with the option of it being extended for a further six.
This would keep Avanti, which operates out of Euston, in place until 2032. The full contract is worth a minimum of £45.9m and potentially as much as £142.2m if all targets are met.
Mr Harper said he had decided to award Avanti a long-term contract after “significant improvements” for passengers on punctuality and reliability.
A full timetable of 264 trains on weekdays has been restored and cancellations fell to 1.1 per cent of services in July, compared with 13 per cent in January.
Mr 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.”
But RMT general secretary Mick Lynch said Avanti was “one of the worst rail companies on the network” and accused the Government of “rewarding abject failure”.
He said: “It is a travesty that they have been awarded this contract.
“From supplying inappropriate uniforms to staff, mass cancellation of train services and multiple industrial disputes, Avanti have been an unmitigated disaster.
“They are incapable of running an efficient rail service or treating the staff properly.”
Avanti trains carried 6.8m passengers between January and March this year, 69 per cent of pre-pandemic levels. Due to the disruption during the summer and autumn of 2022, when drivers refused to work overtime, it ran one of the lowest percentages of services of all UK rail operators.
Between April and June, its punctuality deteriorated on the same period the previous year, with only 46.1 per cent of trains on time – the worst performance in the country, according to the Office of Rail and Road.
Over the same period, 3.5 per cent of its trains were cancelled – down from 7.8 per cent in the same period a year earlier, the UK’s most improved performance.
Avanti, which also operates trains to Birmingham and Liverpool, has been among the worst hit by 18 months of national strikes by the RMT and Aslef unions over pay and conditions.
The Department for Transport said the potential length of the new contract would enable Avanti to plan ahead and introduce new trains.
Avanti is working through a £117m refurbishment programme for its 56-strong electric Pendolino fleet.
It has introduced Standard Premium tickets - allowing passengers to travel in first class coaches but without the food and drink - and low-cost flexible tickets for passengers not needing to travel on a specific train.
The contract is known as the West Coast Partnership, covering Avanti services and “shadow” services on the HS2 high-speed line that is currently under construction between Old Oak Common and Birmingham.
The Government will pay a fixed management fee of £5.1m per annum, with the possibility of this increasing to up to £15.8m a year if key targets, including on punctuality, are met.
In March, the DfT had floated the suggestion of Avanti remaining in place until 2032 as it backed away from demands for the form, part of First Group, to be axed.
The DfT said that a “core contract” of three years would start on October 15, with a maximum possible term of nine years. It said that after three years, the Transport Secretary could terminate the contract at any point with three months’ notice.
Avanti West Coast managing director Andy Mellors said the new contract “provides stability for customers and colleagues as we continue to rebuild trust as well as confidence”.
He said: “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.”