Trainline.com to float on the stock exchange

[Donny Dave]

Not sure where to put this, so feel free to move it if needed

Trainline, the online rail booking system, is to float on the London Stock Market in a deal expected to value the business at about £500m.

The company's private equity owners, which bought the business in 2006 for about £160m, want to list in February.

Trainline started life in 1997 as a division of Virgin Rail, selling tickets through a call centre.

The value of ticket sales last year was £978.1m, and Trainline said its apps have been downloaded 7.4 million times.

Private equity owners Exponent, Harbourvest and Northwestern Mutual Life Assurance said in an announcement that they are selling about 25% of the business.

Exponent has an option to sell a further 15% stake on top of that.

As part of the flotation they want to raise about £75m to pay off existing debt and settle bank costs and fees.

Clare Gilmartin, chief executive of Trainline, said: "We are witnessing continued strong growth in rail and, having experienced first-hand the transformative effect of online and mobile in other e-commerce markets, I am hugely excited by the opportunity that the fast-developing online rail market offers."

The owners of Trainline attempted to sell the business in 2012 for around £400m, with private equity firm KKR widely reported as a possible bidder.

http://www.bbc.co.uk/news/business-30726532

 

[Johnny_w]

I don't get it. How do these companies make any money?

Shirley it's cheaper to book directly with your TOC of choice? So I tend to book with Greater Anglia, unless i'm playing the split ticket game.

So how does any of these sites make there cash?

JW

 

[andrew bell]

I don't get it. How do these companies make any money?

Shirley it's cheaper to book directly with your TOC of choice? So I tend to book with Greater Anglia, unless i'm playing the split ticket game.

So how does any of these sites make there cash?

JW

They advertise on tv and radio. When was the last time you saw East Coast or Virgin advertise they sell train tickets with no booking fee? I can't remember but I do see quite a lot of train line adverts

 

[Greenback]

That's probably the final nail in the coffin of something that was pretty good when it was first set up.

 

[telstarbox]

Lots of advertising! A lot of people think it's the only website which sells tickets in advance.

 

[Greenback]

That's correct. The advertising they means it's often the only site people have heard of or can remember, which has given them a big advantage.

 

[dk1]

Manager in my local uses them. I have asked him "why" so many times. He just says I'm used to them & got their app on my phone. I give up :roll:

 

[Greenback]

Some people just don;t want to be helped. They don't really want to admit they aren't getting the cheapest possible deal as that would mean admitting they made a mistake!

Though some of them really don't care about paying a couple of quid more than they need to.

 

[Clip]

Yup people really don't mind paying it - and their app is supposed to be rather good too so I hear. Lots of big advertising hoardings around London mentioning it too .

though I have seen a few EC ads on telly but not sure if up north or down here but telly advertising costs A LOT of money so I can understand why TOCs don't want to do a lot of it.

 

[LNW-GW Joint]

They must make significant money from providing the booking engines for several TOCs - Virgin , Stagecoach, Arriva TOCs to name a few.
They will still make money that way even if you are not buying directly from them.
With the retreat of First, they might well pick up Scotrail bookings again.
Maybe also East Coast for Virgin/Stagecoach.

 

[alexl92]

I've always been told not to use thetrainline.com because they up the ticket price each time you look at a journey before buying...

 

[northwichcat]

Lots of advertising! A lot of people think it's the only website which sells tickets in advance.

That's correct. The advertising they means it's often the only site people have heard of or can remember, which has given them a big advantage.

Indeed. Remember when companies other than BT were allowed to offer directory enquiries for the first time? One company called 118 118 started advertising a lot and a lot of people thought that was the new number for directory enquiries.

 

[muddythefish]

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

What is the regulator doing to protect passengers and the public from voracious capitalist vultures such as trainline.com ??

 

[Greenback]

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

Because most people don't know that. Most on here do, but that's not he same thing!

 

[northwichcat]

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

What is the regulator doing to protect passengers and the public from voracious capitalist vultures such as trainline.com ??

You can't shut down a company just because they aren't the cheapest!

 

[dcsprior]

I don't get it. How do these companies make any money?

Shirley it's cheaper to book directly with your TOC of choice? So I tend to book with Greater Anglia, unless i'm playing the split ticket game.

So how does any of these sites make there cash?

JW

Perhaps thetrainline offers some features which business customers find are worth paying for - e.g. good management reporting and integration with third-party software; any-card collection being offered; TOD machines which located at customer sites.

Perhaps their mobile app is very good, as another poster suggested (I've never used it myself)

They offer one of the two main user-interfaces for online booking (the other being the mixing deck) which some people will prefer. Even if people don't prefer it, it may be cheaper or easier for TOCs to implement, so some will.

For some customers, there's an understanding that there are other potentially cheaper options for buying tickets online, but they want the reassurance of booking with a brand they recognise, as result of the large amount of advertising.

The above reasons and more are all very good - however I think there's one other big reason why people choose them: their advertising implies that they are cheaper than elsewhere, when they're not - they compare advance tickets sold by them, with walk-up tickets sold at the station. The advance tickets are always (?) available for less elsewhere, when booking fees are taken into account.... which brings us to:

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

What is the regulator doing to protect passengers and the public from voracious capitalist vultures such as trainline.com ??

You can't shut down a company just because they aren't the cheapest!

Quite - though someone could perhaps challenge them on the accuracy of their advertising?

 

[bb21]

They make a lot of money from corporate customers. I believe they do have some unique selling points in that area.

If all consumers are savvy, the retail side of that business would not exist, but then many people (the majority of the population I am willing to have my money on) aren't, and many unwilling to change their habits either for a myriad of possible reasons.

It should also be noted that selling rail tickets is only one part of their business "empire" - if it can be called that.

 

[Scotty]

I've always been told not to use thetrainline.com because they up the ticket price each time you look at a journey before buying...

The only time that can happen is by looking at advance tickets... you add it to your basket, and it is therefore unavailable for a period of time to others. This could mean the last ticket in a lower price bracket is 'taken', bumping up the price for the next person.

 

[Mike@Raileasy]

Telegraph isn't impressed:

http://www.telegraph.co.uk/finance/...ainline-be-more-than-a-railway-middleman.html

...I looked up the prices of standard, off-peak tickets at five random times. On average the tickets purchased through the websites of rail operators were £10 cheaper than those on thetrainline.com.

The test was admittedly a small one and may not be representative. But, if it is, it prompts the question: what is the point of Trainline? That question becomes even more compelling when you dig into its business plan....

 

[arabianights]

All you lot complaining about corporate vultures should open a spread betting account and short trainline.com after the IPO, have a go at making money from human* misery, it's fun.

If you can't beat em, join em

*allegedly

 

[Mike@Raileasy]

Quite - though someone could perhaps challenge them on the accuracy of their advertising?

There's plenty of marketing comms on TOC web sites, mailings etc saying they are the cheapest but they aren't because of splitting.

Red Spotted Hanky obviusly thought they could really hurt TTL by not charging fees. 4 and 1/2 years later (and who knows how many £££££s) they added a booking fee.

 

[najaB]

Quite - though someone could perhaps challenge them on the accuracy of their advertising?

Their advertising, while potentially confusing, is not misleading as nowhere do they claim to have the cheapest tickets.

 

[Hadders]

I loathe The Trainline because they add credit/debit card fees.

However, their advertising is very good and unfortunately Joe Public believes it. Rail fares are incredibly complex to the average person and if they see advertising all over the place saying if you book rail tickets through the Trainline you can save up to 43% why wouldn't you?

Sadly many people don't/can't manage their money well either. I am reminded of an incident at my local station on Monday morning. The person in front of me was moaning about the increase in fares. She then asked the clerk for five Anytime Returns to London, one for each day of the week. The clerk helpfully pointed out that a weekly season would be £20 cheaper and offer more flexibility.

The customer said they 'couldn't be bothered' with a weekly season and ended up buying daily tickets!

 

[DarloRich]

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

What is the regulator doing to protect passengers and the public from voracious capitalist vultures such as trainline.com ??

most real/normal people DONT know that.

They assume the Trainline is doing them a favour. They assume that ONLY the train line have access to certain fares. They assume that all fares are cheaper on the train line. They assume they will save money with the trainline.

Their success, at least for non corporate customers, is based almost entirely on a very successful advertising campaign that stops just short of being untruthful.

I personally dont find their booking engine to be the best. I much prefer the system used by East Coast.

 

[yorkie]

Why is trainline allowed to exist when most people know it does not offer the best priced deals and tickets can be obtained more cheaply elsewhere ?

There's no law against selling items at a higher price and doing loads of advertising with carefully worded phrases to make people think it's cheaper.

What is the regulator doing to protect passengers and the public from voracious capitalist vultures such as trainline.com ??

The regulator doesn't do anything about genuine concerns, let alone this one!
--- old post above --- --- new post below ---

Telegraph isn't impressed

While Ashley Armstrong's concerns about Thetraline are valid, I have concerns about the level of research undertaken for her article, as she claims...

... [Thetrainline] Trainline started life as a ticket site within Virgin Rails before it was sold to the private equity firm Exponent. Since then it has expaned its "white label” offering and now runs the websites and online booking systems for all 22 of the UK's train operators. Yes, that's right: Trainline is its own biggest competitor.

... but that isn't true. Many of them now use Atos WebTIS and Thetrainline is now used by only a minority of UK train operators.

 

[Kite159]

I think Waterloo had advertising from the trainline on the ticket gates, I think London Bridge had it as some point as well. They advertise well to get the less informed passengers to use them thinking they will get them a cheaper deal.

Would be interesting to put the claim on some adverts in Basingstoke station to the test that they can be cheaper up-to midnight before the day of travel. Might be on some TOCs which have midnight cut-offs for advances, but not for the ones which have a 6pm cut-off (Virgin spring to mind for 6pm)

 

[najaB]

Would be interesting to put the claim on some adverts in Basingstoke station to the test that they can be cheaper up-to midnight before the day of travel.

It only requires one TOC to allow advance purchases up to midnight for that statement to be true.

 

[DelayRepay]

I have a colleague who always checks both trainline and the TOC site. Every time, the TOC is cheaper because there are no booking fees, but my colleague continues to check trainline because he is convinced they have access to some extra-cheap tickets. He refuses to believe they are the exact same tickets from the same database, even though he's never found cheaper tickets on trainline...

 

[455driver]

If I buy some shares would there be a booking fee?

No I wont be buying any shares thanks.

 

[johnnychips]

It is very easy to use compared with sites like East Coast.

I find the boxes to choose ticket prices at the top of the East Coast website very confusing.

I always tell my students to look up things on Trainline, then when they know how much the ticket should cost, to go on EC to actually book it.