Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Is the party over for thetrainline.com?

Can the biggest player in UK online train ticketing survive the state backed Great British Railways move into the market?

The proposal

The UK government’s plan to enter the online ticketing business for rail travel across the UK would at its best bring competition to the market, but at its worst would appear to have sliced right through the central part of the business model of Trainline PLC (TRN LN), the owner of thetrainline.com.

However, because Trainline is the only real player in the market of aggregating train tickets, one may be forgiven for saying that we need competition. Well, that is certainly now coming and it’s on an express train, heading straight for Trainline’s shed.

The government’s move, sponsored by the Right Honourable Grant Shapps, Member of Parliament (MP) and Secretary of State for Transport and Keith Williams, Chair of the Rail Review, has published a 114 page report. It is officially called the ‘Williams-Shapps plan for rail’, and is part of a bigger shift in how the railways are run across the UK. This is the opening paragraph of the document:

'A new public body, Great British Railways, will run and plan the rail network, own the infrastructure, and receive the fare revenue. It will procure passenger services and set most fares and timetables. This will bring the whole system under single, national leadership with a new brand and identity, built upon the famous double arrow. This will mark the end of a quarter century of fragmentation.'

Trainline shares: the future

So, Great British Railways, or GBR as it will be known, will take over from Network rail, meaning that GBR’s operational footprint will be far larger than thetrainline.com. Bringing competition to the process of selling tickets will inevitably hit Trainline’s profits, but it may also create opportunities for thetrainline.com, as the plan says it is also expected to bring clarity to the ticket offering:

'We will simplify the confusing mass of tickets, introducing far more convenient ways to pay using a contactless bank card, mobile or online. We will end the uncertainty about whether you are travelling with the right train company. Trains will be better planned with each other and with other transport services, such as buses and bikes. Affordable 'turn up and go' fares and capped season tickets will continue to be protected.'

Shapps, however, went on to say that independent ticket sellers are an important aspect to competition.

How thetrainline.com will have to adapt

Thetrainline.com has an agreed 5% commission on ticket sales and while the majority of its turnover is rail, it also sells tickets for the coach sector, a market that GBR will not be entering. What is not clear how much further GBR will be moving into ancillary sales. Trainline’s revenue model also includes: ‘ancillary services such as travel insurance, selective advertising partnerships, our multi-currency platform and through white label products developed for and provided to rail companies.’

One cannot help but feel sorry for a business that has invested in its future only to be met with a state machine that has decided, unilaterally, to enter the markets that others don’t seem too concerned about. This is what thetrainline.com says: ‘we have invested significantly in building out our inventory, which ensures our customers see all options and best prices. This scale has enabled us to amass significant data, which we use to make our operations more efficient, to inform the development of new bespoke features for our customers, and even to create bespoke and proprietary smart data features.’

How much Trainline knew about what the government was proposing is not known, but what is clear is that we still do not know what the full remit will be from GBR.

On the brightside

There are two factors that may give one hope that thetrainline.com will survive. The first is that it’s service distributing coach tickets will face no change. While this is a smaller part of its business model, it does make a profit from this part of its business. The second factor is the share price.

Yes, it has lost a quarter of its value in the space of three days, but while there may be competition afoot, Trainline’s future is not without opportunity. If you were backing a recovery from the lows, a long trade would be accompanied by a stop-loss just below the 250p support line.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.