Trainline shares tumble a third as government announces new ticket platform
Shares in train ticketing app Trainline fell nearly a third this morning after the government unveiled plans for a new ticketing platform as part of sweeping rail reforms.
By the early afternoon shares in the FTSE 250 firm had recovered slightly, but were still down 21.6 per cent at 335.25p.
The move from the government represents a serious threat to the app, which has become the go-to destination for many passengers looking to buy tickets.
Unlike the National Rail website, which redirects customers to individual franchises to buy tickets, the new Great British Railways system will allow passengers to book all trips from one site.
“A new Great British Railways website will sell tickets and a single compensation system for operators in England will provide a simple system for passengers to access information and apply for refunds”, the firm said in a statement.
The Telegraph reported that it would take about nine months for the new platform to be set up.
Trainline, which currently sells about 70 per cent of all digital tickets, has its commission rates guaranteed until 2024 through an agreement with industry body the Rail Delivery Group.
In a statement, chief executive Jody Ford said the firm was supportive of the recommendations.
“Trainline has a long track record in leading the way on innovation in the sector and Keith Williams highlighted Trainline as an important innovator and partner for the rail industry when he initially announced the direction of the review”, she said.
“Grant Shapps, in his statement to Parliament this morning, said “We’ll welcome independent retailers continuing to compete in the retail ticket market, particularly where they can grow new markets, recognising the value of private sector innovation”
“We are hugely encouraged by the commitment to digital ticketing, which Trainline has championed over the last several years, and the introduction of flexi tickets and digital season tickets which will provide new growth opportunities in the evolving commuter market.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Trainline had been glimpsing light at the end of the tunnel as lockdown eased, but the government’s shake up of the railways has seriously pulled the breaks on prospects for recovery.
“If National Rail Enquiries starts issuing ticket it is likely to gobble up a significant share of the market currently enjoyed by Trainline, due to the strength of its nationally recognised brand, which could seriously impact the company’s sales volumes and revenue.”