Skift Take
With international travel still mostly off-limits, recovery will depend on how successfully these brands can shift towards off-airport rentals and compete with ridehailing firms like Uber and Lyft.
The reversal in the slow air traffic recovery is proving bad news for struggling car rental giants Hertz and Avis Budget Group, which are now looking to slash overheads by a combined $5 billion this year to withstand the pandemic.
With airlines reporting dire second-quarter results — in United's case its most difficult in nearly 100 years — lucrative airport rentals are taking a hit.
On August 10, Hertz reported airport car rentals declined 82 percent in the second quarter, which saw it post an overall loss of $847 million, despite revenues of $832 million.
Meanwhile, rival Avis Budget Group has seen sales skewed towards off-airport locations, its CEO and president Joseph Ferraro said during the company's second-quarter earnings call at the end of July.
Hertz is focusing on reorganizing its working terms with labor, and has cancelled new-fleet orders and cut non-essential spending and capital expenses. It’s also consolidated off-airport rental locations for efficiency.
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