Trainline shares soared on Friday after the Government confirmed it would scrap plans for a ‘Great British Railways’ ticket retailing website and app.
The Government’s plans had been a threat to Trainline, whose business model is based on allowing users to plan and book journeys across all UK rail providers, and store tickets on their phone.
Analysts said the proposals were always unlikely to come to fruition, but confirmation of its cancelation removes a major overhang for Trainline.
Trainline shares were up 14.1 per cent at midday on Friday to 324.2p, bringing 2023 gains to 16.9 per cent.
Competition cancelled: Trainline shares soared as Government cancelled ticket app plans
The Great British Railways plan revealed in May 2021 was the brainchild of Royal Mail chairman and chair of the Rail Review Keith Williams and then-Transport Secretary Grant Shapps.
The app was part of the Great British Railways plan, a ‘brainchild’ of Grant Shapps and Keith Williams
The Government said the plan would ‘support the levelling up of our towns, cities and regions’ by making railways ‘the backbone of a cleaner, more environmentally friendly and modern public transport system across the country’.
It set out plans to replace franchising and modernise the railways in a ‘financially sustainable’ way, including the launch of a ticketing app covering all UK services.
The app, it said, would cover season tickets, and regional and long-distance journeys, with users able to ‘print out the ticket at home or hold it on your phone’.
‘This will make it far easier for passengers to travel by train and end the search for reams of tickets when travelling as a family, for instance,’ it added at the time.
‘The Government will work with current operators to continue the roll-out of digital ticketing on smartphones across the network.’
But on Thursday evening the Government said it would not be ‘pursuing plans to deliver a centralised Great British Railways online rail ticket retailer’.
It said: ‘Train operators will continue to retail to passengers online alongside existing third-party retailers while we develop measures to spur further competition in the online rail ticket retail market to make things better for passengers.’
Analysts at Peel Hunt said the decision to scrap the app plan was ‘inevitable’.
The analysts added: ‘For us, any threat of a Government-run app was always very low. Not that we believed it wouldn’t happen, it just became less likely as the years went on.
‘It was more the lack of financial viability of running one on a level playing field. This became worse when the Government made it even less attractive for retailers, by reducing commission rates.
‘Last night, we believe the Government reached the correct conclusion.’
Peel Hunt upgraded its Trainline target price to 460p.
