Trainline shares soar as DfT scrap plans for a ticket app

Trainline shares had jumped 14.78% at the time of writing on Friday as the UK Department of Transport (DfT) abandoned plans for its own ticketing platform.

Unexpectedly, on Thursday, the Department for Transport (DfT), headed by Mark Harper, revealed its decision to forsake the plans for establishing a ticket-selling website and app for Great British Railways in a move to generate revenue and decrease costs for customers.

- Advertisement -

The DfT said on Thursday that they “confirm that we are not pursuing plans to deliver a centralised Great British Railways online rail ticket retailer.”

The plans for an app were initially introduced in May 2021, and the government’s platform would have directly rivalled Trainline.

But for now, the railway company’s stock prices shine as the abandonment of the DfT app “removes a potential competitive threat for the business in its core market,” said Russ Mould, investment director at AJ Bell.

Trainline’s “focus can now turn to the company’s efforts to expand in Europe, where rail travel is more reliable and affordable, and as it consolidates its position in its domestic market,” Mould added.

- Advertisement -

This year, investor worry escalated for Trainline as the possibility of a new online retail rival loomed in the UK, posing a threat to its dominant 62% market share, as noted by analysts from JP Morgan. 

“Trainline is a well-known brand, and its app has good functionality, but the initial reaction to plans for a state-backed app, when the shares fell more than 20% intraday, shows it is vulnerable to fresh competition,” said Russ Mould.

Latest News

Subscribe to the UK Investor Magazine email newsletter

Register for our free email newsletter and receive the latest investment news, podcasts, event information and offers.

More Articles Like This

Tagdiv Cloud library - template content.