Home Business NewsBusiness Trainline shares soar on commission rate relief

Trainline shares soar on commission rate relief

by LLB Reporter
31st Mar 22 12:00 pm

There will be a sigh of relief in Trainline’s camp regarding the proposed changes to its commission rates. The rail industry is undergoing a lot of changes, and this includes reviewing the cut that third party ticket sellers get when they put bums on seats.

Trainline’s slice of the pie looks like it will go from 5% to 4.5% which in the grander scheme of things is not a bad deal. The rail sector has been through very difficult times during Covid, and it would have been easy to slash commission rates to the bone, leaving Trainline in a pickle.

“Fortunately, the business should be able to cope with a half a percentage point decrease in the rate. Even better for its finances is the removal of central industry costs worth 0.25%. That explains why its share price has shot up more than 20% on the news,” said AJ Bell’s Russ Mould.

“So far so good, but it’s too early for Trainline to start celebrating properly. There is a bigger issue to overcome which is the rail industry’s new ticketing platform which poses a risk to Trainline’s market share.

“The best-case scenario would be for Trainline to be picked as the behind-the-scenes platform provider, effectively providing a white label version of its own website.

“It already provides such services for various train companies and so has proven expertise. But if these white label services move under the Great British Railways umbrella, it means Trainline will have to find a new seat at the table otherwise it could be left out in the cold.”

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