Investing.com -- Trainline PLC (LON:TRNT) shares sank 7% in London trading Wednesday after the UK Department for Transport (DfT) announced that a new government-backed online train ticket retailer is to be created. The initiative aims to make it easier for passengers to buy tickets from different rail operators through a single service.
However, the platform will not be available until Great British Railways (GBR) is fully established, which is expected to happen no sooner than late 2026.
In its statement, the DfT explained that the service would integrate the ticketing websites of individual train operators and “work alongside a thriving private sector retail market, where all rail retailers can compete in an open and fair manner.”
The department emphasized the ongoing importance of private ticket retailers, such as Trainline, RailEurope, and TrainPal, stating that these companies will “continue to play a key role in driving growth through innovation and investment and encouraging more people to choose rail.”
Commenting on the announcement, Barclays (LON:BARC) analysts said they believe the move “is a negative for Trainline in the sense it opens up a scenario where the current 27 TOC websites concentrate to just 1 over time.”
Analysts added they had anticipated some consolidation among the 27 current train operating company (TOC) websites but believed the base case would still involve several remaining in operation over the mid-to-long term. This would result in some fragmentation for consumers, particularly on high-speed routes, which they see as beneficial for Trainline’s position as an aggregator.
Still, the analysts note that the language used in the recent announcement leaves open the possibility of a single TOC website branded as GBR. While this is just one potential scenario, they believe such a transition would likely take significant time and question whether a GBR-branded website or app would deliver a strong user experience.
Barclays also suggests that Trainline could benefit from market share gains if legacy TOC websites are phased out.
At the same time, they highlight the risk of a scenario in which consumers are left choosing between Trainline and a GBR platform as they “think that would be potentially negative for Trainline to the degree that its unique brand awareness becomes less of an advantage.”
The DfT’s decision revives a proposal initially introduced in May 2021 by the Conservative government, under the leadership of then transport secretary Grant Shapps, to develop a new website and app for train ticket sales. However, later that year, the DfT decided against proceeding with the plan, instead highlighting the “important role” of the private sector.