First Great Western is to pay for more trains and better passenger compensation after poor service on lines to Wales and the West Country.
The operator is bottom of a passenger satisfaction league table
The Swindon-based train operator agreed the £29m investment package after discussions with the government.
Extra drivers and guards will be recruited to resolve a staff shortage.
Bristol rail user group More Train Less Strain, which recently held a fare strike protest, said it was a "step in the right direction".
FGW announced on Tuesday that five extra three-carriage trains will be leased for the troubled Cardiff to Portsmouth service.
Compensation for delayed passengers next year will increase by half, on top of the doubling of compensation already announced for this year.
There will be extra discounted tickets available, better information systems and £4m will be spent on staff training.
A statement from the operator said: "FGW acknowledges that its performance has fallen short of its own standards and the expectations of passengers.
"FGW is committed to improving performance and taking the necessary action to ensure that cancellations and delays are minimised.
"Following discussions with the DfT, FGW has agreed to make additional investments to provide an enhanced service for passengers and agreed a plan to improve operational performance."
Chief operating officer Andrew Haines added: "There is a considerable momentum to transform the business and taken together with the management changes we have made, we are confident of our ability to improve performance."
Peter Andrews from More Train Less Strain said: "It is half a cheer, it's less than 1% of FGW's turnover, its less than half a mile of motorway being built.
"We're very pleased to see more trains on a particularly troublesome route, but things like more cut price tickets are, to our mind, gimmicks."
"But this is the result of passenger power, that independent groups like us and our fare strike have been responsible in a great part for these things happening, by bringing them to the attention of the government and making First lose face.
"We wonder if they would have happened if we hadn't done these things."