Trainline is facing a major turning point. On Thursday, December 14, the UK Department for Transport officially abandoned its ambitious project for an online platform and app for train ticket sales by “Great British Railways”. A public entity overseeing rail transport in the UK. The announcement of this decision sent shockwaves through the industry, directly impacting the giant Trainline…
What is Great British Railways?
Great British Railways (GBR) is a rail reform project conceived by the British government. In effect, this body is working on behalf of the government to create a new organization bringing together decisions relating to railroads and rail services. More specifically, this organizing authority is responsible for marketing services, pricing, supervising operators and overall management of the rail transport network in the UK.
In May 2021, the GBR project envisaged a centralized online platform for train ticket sales in the UK. The idea was to create a unified digital platform offering clear fare options and promoting pay-as-you-go. The aim of the project was to improve the passenger experience by eliminating the complexities involved in booking tickets. All this, while encouraging healthy competition in the online retail sector. A project that competed directly with the giant Trainline, but was interrupted before its launch…
Impact on Trainline shares
The Department for Transport’s decision to abandon “plans to establish a centralized Great British Railways online train ticket retailer” has had a significant impact on the shares of booking platform Trainline. Indeed, these were propelled to their highest level of the year. This announcement marks a major change from the significant fall in shares in May 2021… a direct consequence of the introduction of the “Great British Railways” project. A new page is now being turned for Trainline, offering more favorable prospects.
Rail operators will continue to sell tickets online to passengers, alongside existing third-party retailers, while we develop measures to stimulate competition in the online train ticket sales market, to improve the situation for passengers.
BRITISH DEPARTMENT OF TRANSPORT
Positive outlook for Trainline
According to JP Morgan’s analysis, Trainline is facing some concerns among investors. Investors feared the emergence of a new online competitor in the UK. Trainline’s market share, estimated at 62%, was under serious threat…
The proposed withdrawal removes a major hurdle in Trainline’s investment case, where investor concerns have focused on changes in UK rail regulation (a new GBR application) which has led to a devaluation relative to ranked peers, and overshadowed the strong passenger momentum and improved operating results, in our view
BANQUE J.P. MORGAN CHAISE & CO
However, the bank acknowledges that Uber’s emergence as an online ticket aggregator could raise concerns among some investors. Indeed, its recent proximity to entities such as SNCF Connect raises questions. Nevertheless, she points out that so far, there is little indication of a significant breakthrough by Uber. Investors’ attention should now focus on Trainline’s positive passenger momentum and ongoing operational improvements.
