Season tickets on West Midlands Railway services will not rise in January as beleaguered bosses compensate passengers after months of train delays and cancellations.
West Midlands Trains, which operates the services, has faced mounting criticism, including from West Midlands Mayor Andy Street, over its poor performance.
Mr Street said the operator should be stripped of its rail franchise if its "woeful" performance does not improve by the end of January.
The operator, which also manages London Northwestern Railway, will offset the national train fare rise of 2.8 per cent, which is due to come in from January 2.
Instead there will be a three per cent reduction in the cost of weekly, monthly and annual season tickets. But other fares are expected to rise.
Issues had worsened since a new timetable was introduced in May.
West Midlands Trains said May timetable changes created capacity for 150,000 extra passengers.
But made it “much harder” to cope with disruption, leading to more severe knock-on effects and an increase in delayed journeys.
This timetable was scrapped in December in a bid to bring improvements.
Managing director, Jan Chaudhry-van der Velde, said the effective fare freeze was in recognition that performance and timekeeping "not been good enough".
He said: “We have said for some time now that performance and timekeeping since the May 2019 timetable has not been good enough.
"The [May] timetable added too much complexity which means that even minor delays transmit through the network.
"Some changes were made in the December 2019 timetable change to remove the complexity, and to add capacity, but the most significant changes to reintroduce simplicity will be implemented in the May 2020 timetable.
"I apologise again to customers for the poor performance and cancellations since May.
"As well as the timetable simplification in May, 2020 will also see the arrival of the first of our new trains, boosting capacity on our diesel services in the West Midlands."
In response to the compensation offer, Mr Street said: “I am pleased West Midlands Trains have listened to my request to freeze the annual fare rise following their recent woeful performance.
"By offering this discount, season ticket holders will now see a reduction in their fares as opposed to the unfathomable increase they were originally facing.
“This is a positive first step towards repairing WMT’s relationship with passengers and I am sure this will be welcomed by regular commuters.
"Of course season ticket holders are not the only people who travel on trains in the West Midlands, and I expect WMT to offer a compensation package to day passengers as well.
“However what passengers really want is a train service that they can rely on seven days a week.
"That is currently not the case under WMT, whose performance is, quite simply, unacceptable.
"My ultimatum to restore a reliable service by the end of January or I will ask the Department for Transport to strip the franchise remains in place.”
West Midlands Trains has already paid out £2.5 million in compensation via Delay Repay claims since May.
It took over from London Midland last year but has been dogged by problems to services including staff shortages.
Strike action, due to a row over over train guards, also hit Saturday services from November 16.
But this was called off by December 6 following talks.
This month West Midlands Trains introduced 16 additional carriages to create more capacity.
A further 24 carriages will be added in the first few months of 2020.
It came after West Midlands Police and Crime Commissioner David Jamieson also hit out over continued chaos on local rail services – saying that "the failing transport system has now become a danger to public safety".