FirstGroup on Monday said the Department for Transport has exercised its option to extend financial help for Great Western Railway, in move that will help the rail and bus firm ride out the virus crisis.
The company, which runs the GWR trains out of Paddington to Wales and the West Country, said the Emergency Measures Agreement (EMA) for GWR is until at least June 26 next year.
Firms industry-wide have been grappling with drastically lower passenger numbers since March when the lockdown started. The sector has been hit by travel restrictions and scores of people being urged to work from home where possible.
Train operators have been in talks with the government about further support for the industry in order to keep trains running and increase capacity as schools and businesses reopen.
The EMA involved changes to franchise agreements, transferring all revenue and cost risk to the government. Operators instead run day-to-day services for a small, pre-determined management fee. The EMA was first announced in March and is due to expire in September.
In March FirstGroup said it had signed an agreement with the DfT to continue operating GWR until March 2023, with a possible one-year extension.
At that time, the group also announced that the franchise would run under EMA terms for at least the first six months in response to the coronavirus outbreak.
That time period is now expiring and the DfT has exercised its option for the EMA to continue under the same terms and conditions as previously for GWR.
Under the EMA, the DfT waives revenue, cost and contingent capital risk and GWR is paid a fixed management fee with the potential for a small performance-based fee.
Matthew Gregory, chief executive of First Group said: “We welcome the news of the extension of the EMA for GWR. This demonstrates the essential nature of GWR’s services to the communities it serves, and provides important clarity and continuity for our customers, employees and wider stakeholders.”
He added: “Across the network we are increasing service levels to provide more capacity as schools recommence and work and leisure facilities reopen, and we are taking all necessary steps to ensure our passengers continue to travel safely.”
A DfT spokesman said: “We are taking decisive action to keep services running during these unprecedented times, ensuring current excellent reliability levels are maintained while providing more space for social distancing and extra capacity for the future. The extension to the Great Western Railway Emergency Measures Agreement guarantees vital services in the short term and tangible improvements in the long term.”