Richard Branson said he was "devastated" that Virgin Trains was in control of the West Coast Main Line after 22 years.
The Department of Transport awarded the First Group based in Aberdeen and Trenitalia UK, a branch of the main train operator in Italy, a contract to operate the London-Glasgow railway line from December 8.
The analysis revealed that after the start of the contract, more than 60 percent of train travel on British rail lines will take place using services partly owned by foreign companies.
"Devastated": Richard Branson said he was "devastated" that Virgin Train's control over the West Coast main line is coming to an end after 22 years
DfT banned Virgin Trains from applying to maintain the West Coast Main Line in April amid an ongoing series of pensions.
The dispute, in which transport secretary Chris Grayling awarded East Eastlands rail to rival operator Abellio, prompted billionaire Branson to warn that Virgin Trains might "disappear."
Stagecoach, which owns 49% of Virgin Trains, disagreed with the government on how to fill the huge deficit in the rail pension program, which includes rail employees.
The pension regulator wanted railway companies to agree that they would have to put more cash into the system, but they refused and demanded more from the government.
Branson said: "The pension regulator warned that more cash would be needed in the future, but no one knows how big this bill can be and no responsible company could take that risk with pensions.
"We can't accept the risks we can't manage – it would be reckless. This is an industry-wide problem and forcing railway companies to take such risks could lead to the failure of more rail franchises. "
Virgin Trains, a partnership between Virgin Group and Stagecoach, has been providing West Coast services since March 1997.
First, Trenitalia will pay the Treasury £ 1.6 billion in service premiums on the West Coast by 2026. The first group will own 70% of shares in the company, and Trenitalia will hold 30% of shares.
End of the era: Virgin Trains, a partnership between Virgin Group and Stagecoach, has been providing West Coast services since March 1997.
Under the new contract for the First Trenitalia West Coast Mail Line, passengers are promised 263 additional services per week, more seats, station upgrades and new environmentally friendly trains.
Motherwell in North Lanarkshire will become the "main call point" and destinations such as Llandudno in North Wales and Gobowen in Shropshire will be served by direct trains to and from London. Walsall will receive the first direct intercity services.
The number of direct connections between London and Liverpool will be doubled to two per hour, subject to the approval of the Rail and Road Office.
Twenty-three new trains will be used to provide additional services to the northwest, while the existing Pendolino fleet will receive a renovation of £ 117 million, including new seats, extra luggage space and improved toilets.
Headquartered in Aberdeen and the Italian company Trenitalia, supported by the state, will design and develop High Speed 2 as a "shadow operator" and will support HS2 from March 2026 to 2031. Together with services on the West Coast.
Route: West Coast main line currently served by Virgin Trains
RMT secretary Mick Cash contested the decision to award First Trenitalia a contract, giving the move "a political change by a government whose privatized franchise model is collapsing around their ears."
Cash added: "Instead of following the popular public sector route, the Tories take another gamble on key West Coast lines with one of the decreasing number of consortia of private operators in the game, which RMT says is doomed to failure and will certainly cause even greater rail chaos. "
Shadow Transport Secretary Andy McDonald said: "It's time for our railways to become public property, so they act in the interests of passengers, instead of ripping them out, to align pockets with profits and shareholders."
Transport Secretary Grant Shapps said the offer was part of the transition to the new British rail model.
Shapps said: "This award is positive news for passengers, with more services, more direct connections and ambitious plans for clean, clean rail, and also represents a decisive change towards a new rail model."
Shapps also told BBC Radio 4 Today that the franchise will encourage operators to run trains on time.
DfT said that by December 2022, there will be an additional 263 trains every week, and Motherwell will become the main contact point for most West Coast Partnership services.
Direct connections from London will also be introduced to places such as Llandudno and Gobowen, and Walsall will receive the first direct InterCity services.
Subject to the approval of the Railway and Road Authority, First Trenitalia will run two trains per hour between Liverpool and London. Virgin Trains planned to introduce a new hourly service between London and Liverpool from May 2021.
First Trenitalia said it would operate 56 refurbished Pendolino trains and replace the Voyager diesel-powered fleet with a CO2-reducing fleet. The Pendolino fleet is expected to offer the consortium new seats, better toilets and additional luggage space for 117 million pounds.
Shapps said the decision was supported by Keith Williams, who was commissioned to look at changes in the rail franchise system
Williams, chairman of Rail Review, said: "Rail needs reform, which prioritizes customers and the communities it serves, with absolute emphasis on delivering benefits to passengers.
"I also explained that my review cannot stop or delay investment and innovation. The West Coast Partnership provides passengers. This is a step forward that is closely in line with the review, introducing passenger benefits today and enabling the reforms needed for the future. "
Expansion: Italian Trenitalia currently runs trains on the C2 line between East London and Shoeburyness in Essex
Trenitalia currently runs c2c trains between East London and Shoeburyness in Essex.
Virgin Trains received the highest passenger satisfaction rating among all franchise train operators in the United Kingdom, with 91% of customers satisfied with their travel, according to a recent survey of 30,000 passengers by the Transport Focus supervisory body.
Punctuality, value for money, toilets and response to delays belonged to the category that the railway undertaking rated by several percentage points above the average for all long distance operators.
However, the company has been criticized in the past, including last year, when Sky presenter Martha Waner called her "national disgrace" for charging 338 pounds for an open return from Manchester.
One woman said she could travel from London to Sydney for a similar price, and in December one-way flights are available for just £ 305.
Another suggested that she could fly to Moscow from London and spend the night in a five-star hotel at the same price, while another asked why she hadn't flown through Amsterdam.