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This weeks

• AUTORENTALNEWS : Is this Car Rental’s Darkest Hour?
• CARTRAWLER : Towerbrook eyes bid for Irish tech champion
• AVIS BUDGET GROUP Reports First Quarter 2020 Results
• HERTZ earnings: A Tale of Two Half Quarters

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Is this Car Rental’s Darkest Hour?

Auto Rental News, 13 May 2020

Survival will likely depend on accessing future rounds of funding, which still won’t be enough to prevent some attrition.

Darkest hour indeed. At the majors, here’s what we know:

Enterprise Holdings, the largest global car rental company, has dismissed 2,000 employees in the company’s headquarter state of Missouri alone, according to public records. As a privately held company, Enterprise’s global workforce situation is opaque.

Avis laid off or furloughed 70% of its workforce globally, some 21,000 employees. Hertz furloughed 16,000 North American employees — 12,000 of them are permanent, according to the company.

What does this look like for the immediate future?

Avis believes it has adequate liquidity for the balance of 2020 and into 2021. The company anticipates revenues being approximately 80% lower in May compared to last year, with “a gradual recovery in June and improving thereafter.”

Enterprise seems best poised to ride out the storm. It remains investment grade and has the lion’s share of neighborhood stores and non-airport business. Hertz can no longer rely on its rentals to the ride-hailing market for the foreseeable future.  

Addressing the elephant in the room — a Hertz bankruptcy — what’s the likelihood it’ll happen?

When travel returns — we’re talking post vaccination — there may be a percentage shift away from certain types of travel in favor of virtual meetings and events. Europeans will return to Florida beaches, conventions will happen, and families will take road trips. People will travel, and they’ll need clean personal transportation.

Will another travel mode muscle car rental out of the way to put airline travelers into cars at airports? I don’t think a ride-hailing company, carsharing system, or peer-to-peer rental company is in a better position than car rental to take over the on-airport infrastructure from car rental.

For green shoots, let’s look to China. Ctrip, China’s largest online travel agency, reported that car rental in China has already recovered 70% of its business compared to last year. EHI Car Services, the second largest car rental company in China, reported to Auto Rental News, its “total number of bookings has already exceeded last year,” said Leo Cai, executive VP, in an email. “But the price is not 100% there. For the May Day holiday, our total revenue pretty much matched last year.”

Consider this the “3 a.m.” of the pandemic. Dawn is coming. Car rental will survive its darkest hour.

Towerbrook eyes bid for Irish tech champion CarTrawler

6 May 2020

Sky News has learnt that Towerbrook Capital Partners, the buyout firm, is close to securing a deal that will see it becoming the controlling shareholder in the travel software firm.

Sources said on Wednesday that Towerbrook was likely to inject more than €100m into CarTrawler, with some of the company’s lenders converting part of their debt into equity.

AVIS BUDGET GROUP Reports First Quarter 2020 Results

4 May 2020

First Quarter 2020 over First Quarter 2019:

• Revenues of $1.8 billion, a decrease of 9%, however, Year to Date February Revenues were up 9%
• Net loss of $158 million, or $2.16 per diluted share and Adjusted net loss of $103 million, or $1.40 per Adjusted diluted share
• Adjusted EBITDA loss of $87 million, however, Year to Date February Adjusted EBITDA was up ~$60 million
• Per-Unit Fleet Costs improved 7% excluding exchange rate effects
• Available liquidity of $1.6 billion at March 31, 2020

Hertz Earnings: A Tale of Two Half Quarters

Auto Rental News, 12 May 2020

Total revenues of $1.923 for the first quarter represent a 9.7% drop compared to last year’s first quarter of $2.107 billion. Net loss was $356 million, compared to a loss of $147 million in the first quarter of 2019.

In the U.S., year-to-date February 2020 revenue for the segment was up 8% from the same period in 2019 on both higher price and volume. Travel bans and shelter-in-place orders throughout the country severely impacted volume in March which drove an 11% decline in transaction days for the quarter.

While the company missed lease payments due April 27, it was given a temporary lifeline until May 22 by lenders. While Hertz says it is reviewing options to preserve liquidity, “there can be no assurance that the company will be able to successfully negotiate any relief past May 22.”

First quarter 2020 results impact of the Covid-19 outbreak

Europcar Mobility Group press release, 05 May 2020

Caroline Parot, CEO of Europcar Mobility Group, declared:
“After a solid start of the year 2020, Europcar Mobility Group was hit by the COVID-19 crisis. Early March, the drop in the number of bookings accelerated rapidly, first in Italy, and then in all our key geographies.
To adapt to this extraordinary situation and mitigate revenue loss, Europcar Mobility Group engaged unprecedented cost reduction measures (€850m by year-end), as well as cash preservation and liquidity securing measures, to navigate through the next months of crisis and be in position to progressively resume operations, thanks to our flexible operating model, when local economies start to recover.
As we are preparing for this restart, we consider that the situation remains highly uncertain and that it is premature to share any 2020 earnings outlook. During Q2 and H2, it is likely that we will focus on the domestic customers segment, building on a shift from international to “local” travel, while pushing agility further in terms of cost base.”

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