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(Sharecast News) - Shares in FirstGroup slumped on Thursday after the UK government nationalised its TransPennine Express (TPE) service in response to months of cancellations and woeful service.
Services will come under the Department for Transport's Operator of Last Resort (OLR) measures from May 28. Shares in the company fell 7% on the news.
TPE passengers have suffered from widespread delays and cancellations over the past year. The FirstGroup-owned operator, which covers an area across northern England and into Scotland, has been affected by drivers who are members of the Aslef union no longer volunteering to work paid overtime shifts.
TPE cancelled the equivalent of one in six services across most of March, according to the latest figures.
"While some improvements have been made over the past few months, it has been decided that to achieve the performance levels passengers deserve, and that the northern economy needs, both the contract and the underlying relationships must be reset," the DfT said.
"The decision to bring TransPennine Express into the control of the Operator of Last Resort is temporary and it is the government's full intention that it will return to the private sector."
Reporting by Frank Prenesti for Sharecast.com
