FirstGroup has been named as the preferred operator for the London Overground suburban rail network contract from Transport for London (TfL).

The group’s subsidiary, First Rail London Limited (FRLL), will become the new operator from 3 May 2026 on an initial eight-year term contract, with an option to extend for another two years at TfL’s discretion. The contract is estimated to have a value of around £3bn.

FirstGroup will work to deliver the next phase of the London Overground, with FRLL responsible for operational performance, customer service and ticketless travel.

Under the contract, the firm will make a number of improvements, including an increase in services on the Mildmay and Windrush lunes, supporting TfL’s Vision Zero commitments, and working with Network Rail, Astrom and other industry partners.

Group chief executive at FirstGroup, Graham Sutherland, said: "The London Overground has greatly improved connectivity in London, with around four million passengers now using the service every week. We are delighted to have been named as the preferred operator for the service from next May and look forward to welcoming employees who will be joining the Group and to play our part in the success of this vital rail network.

"We are an experienced and trusted partner in public transport and look forward to building on our relationship with TfL, for whom we already operate buses, trams and the London Cable Car. Our successful bid for this contract represents another significant step in our strategy to diversify and grow our portfolio, and we will continue to evaluate further growth opportunities like this."

Following the announcement, shares in FirstGroup increased by over 5%.

Head of markets at AJ Bell, Dan Coatsworth, stated that the firm has continued its post-pandemic recovery with this contract win.

He concluded: "The loss of several key rail franchises over the last decade or so had left FirstGroup more reliant on its bus operations so it’s no surprise to see the market welcome a return to greater diversification in the business.

"The revenue risk is borne by TfL, making this an attractive commercial opportunity. FirstGroup already has an established presence in the capital and an existing relationship with TfL for which it already runs a significant chunk of the bus network as well as trams and the London Cable Car.

"The new contract widens the gap between FirstGroup and its main UK-listed peer Mobico. FirstGroup’s shares have advanced more than 180% over the last five years while Mobico has reversed more than 90%."

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