FirstGroup extends Transpennine Express franchise agreement

LONDON (ShareCast) - Transport company FirstGroup (LSE: FGP.L - news) has reached an agreement with the UK Department for Transport to extend its contract to operate the First Transpennine Express rail franchise by a year. The deal means that the FTSE 250 group will operate the franchise until 1 April 2016, in line with the expected start of the government's new Transpennine Express franchise.

The group said it was among the companies shortlisted for the new franchise and signalled its intention to submit a bid later this year.

"Today's agreement with the Department for Transport provides continuity and consistency for First TransPennine Express passengers over the next year," said group chief executive Tim O'Toole.

The Department of Transport said the extension will see trains on the route being equipped with more seats and deliver a better service, while stations on the route will be fitted with free Wi-Fi.

FirstGroup shares were down 0.70% to 92.30p at 08:55 on Friday.