Trainline shares plunged by almost a third on Thursday after the UK government unveiled plans to set up a rival ticketing app.
Under the new proposals, commuters will be able to buy tickets via a website run by a new state-owned body called Great British Railways. It will also provide passengers an easier way to access refunds for disrupted journeys.
Trainline shares plunged 28% in early trade on the news. The firm listed in London two years ago and has become popular with commuters who can buy and store tickets on their phones in seconds for a small fee.
Reports said it could take around nine months to get the new Great British Railways site up and running. Britain’s 26 rail operators will migrate on to the platform as their contracts with so-called aggregators such as Trainline expire.
State-owned website National Rail Enquiries only allows customers to find train times with users directed to the relevant train operator for ticket purchases.
Hargreaves Lansdown analyst Susannah Streeter said the government’s plan had “seriously pulled the brakes” on Trainline’s prospects for recovery after Covid pandemic lockdowns.
Streeter said 70% of all digital fares are currently sold by Trainline, “and despite the pandemic disruption which saw it pushed into a £100m operating loss, Trainline kept investing in new personalised and go-location technology to win market share amongst customers”.
“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.”
“Trainline’s current commission rates are guaranteed until April 2024 under an agreement with the Rail Delivery Group but after that how the company will slot into the new rail world is far from clear, without further detail about how the new system will operate.”
