Trainline shares dive as government reveals new ticketing platform

It could take nine months for the Great British Railways app to become fully operational

Trainline shares (LON:TRN) plummeted on Thursday as the UK government outlined its plans to launch a rival ticketing platform.

Having fallen by almost a third, Trainline shares are down by 23.79% at the time of writing.

Under the new plan, commuters will be able to purchase tickets via a website called Great British Railways.

The FTSE 250 company listed in London two years ago grew in popularity with consumers who were able to buy and hold tickets on their devices in a matter of seconds.

Reports are suggesting that it could take in the region fo nine months for the Great British Railways app to become fully operational.

AJ Bell investment director Russ Mould commented on the news:

“When there are limited barriers to entry for a business there are always risks as rail ticket seller Trainline is discovering to its cost today, lending credence to financier George Soros’ decision to short the stock through his UK investment arm,” said Mould.

“When your potential competitor is the state the threat can be almost existential and the sweeping changes to the UK railway network which have been announced contain an important detail which is potentially devastating to Trainline’s business model.”

“The new Government-backed Great British Railways body is set to sell tickets in England and, while it won’t be set up for a couple of years, once it’s in place the plan is also to simplify the process of buying tickets,” Mould said.

“This has two implications for Trainline – potentially a lot of people will buy tickets from this new centralised body and if the previous labyrinthine ticket pricing system is made easier to navigate, the company will have less of a role in helping passengers find the best available price.

“Innovations like offering people predictive travel information and telling them how busy services are may make some difference at the margin in maintaining loyalty to Trainline’s site but it is hard to believe it will be enough.”