THE boss of a train operator has defended his company after transport secretary Stephen Byers said it must improve or lose its franchise.

Mr Byers issued the warning to Arriva Trains Northern (ATN) during a visit to Blackburn and said he was "concerned about the way they were operating and their poor performance in terms of punctuality and reliability."

But Ray Price, Arriva's managing director, said many of the problems were inherited from the award of the franchise and that staff at ATN were working hard to improve.

Mr Byers also criticised the company for failing to resolve the industrial dispute with its conductors.

ATN's TransPennine Express Service through Preston, Blackburn, Accrington and Burnley has been cancelled every month this year for 48 hours due to strikes. The conductors are promising to walk out each month until the dispute over new pay terms is resolved.

In March, the company was fined £2 million by the Strategic Rail Authority after failing to recruit enough drivers in 2001, which caused train services to be sporadically cancelled.

Mr Price said ATN had appointed new management since then and that the Strategy Rail Authority had acknowledged, when fining the company, that it had vastly improved since 2001.

He added: "We have made significant progress in dealing with the problems we inherited when we were awarded the franchise which was seriously under-funded, critically under staffed and had insufficient trains.

"Since then, we have carried out one of the largest driver recruitment and training campaigns ever seen in the industry and have increased the total number of employees by more than 600."