Trainline warns over losses as rail travel recovery slower than hoped

Ticket sales app Trainline has warned over half-year losses as it said demand for rail travel is recovering more slowly than expected amid the pandemic.

The group said it is expecting to report underlying losses of between £14 million and £19 million for the six months to August 31 as ticket sales slumped due to the lockdown and ongoing passenger caution.

The group said ticket sales in the UK were just 15% of previous year levels in its first half to the end of August, due to the lockdown and a flood of refund requests at the height of the crisis, including more than two million in the UK alone.

UK total ticket sales tumbled to £67 million in the first quarter – just 8% of prior year levels – as industry-wide passenger numbers across the UK crashed by 95% between April and May.

But Trainline saw better trading in the second quarter, with UK ticket sales of £174 million, though this was still just 22% of those seen a year earlier.

Consumer ticket sales improved again in August as demand recovered, though they are still running at under half – 46% – of previous levels.

The latest figures from the Department for Transport revealed UK train journeys are still just a third of pre-pandemic levels.

Trainline said: “With the industry now on a path to recovery, albeit more slowly than previously expected, Trainline is phasing its operations back to normal.”

With the help of new initiatives such as “crowd alerts”, Trainline is hoping to increase passenger confidence in the face of the coronavirus crisis and capitalise on the shift to online booking.

An alert system was launched in July using crowdsourced data from others on a train to establish how busy it is.

Trainline has also been cutting costs to offset the hit to ticket sales and said better-than-expected savings during the crisis have helped limit first-half losses.

Clare Gilmartin, chief executive of Trainline, said: “By acting quickly and remaining agile, we continue to successfully navigate through the significant disruption Covid-19 has caused to the rail and coach industry.

“We have rapidly processed unprecedented levels of customer refunds, reduced costs and ensured we have enough liquidity to operate for the foreseeable future.”

She said the recovery has been quicker in overseas markets, where ticket sales were 74% of previous years in the second quarter, and 78% in August.

Over the first half as a whole, international ticket sales fell to £358 million, which was 19% of previous years.

Overall, group revenues plunged 76% to £31 million in its first half.

Transport analyst Gareth Davies at Numis Securities said: “Our 2020 assumptions set in May had assumed a return to some level of normality in key markets from September 1.

“Given recent Covid-19 news flow in all of the group’s key markets, this is unlikely to now be the case.”

But he was “very optimistic that Trainline can come out of Covid-19 as a structural beneficiary of an accelerated shift to digital tickets”.