Avis Budget Posts Record $ 1B + earnings

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Avis Budget Group reported Adjusted EBITDA of $ 1.06 billion, the highest figure in the company’s 75-year history. CEO Joe Ferraro said the company had set the figure as a target in 2014 but that Covid headwinds had delayed reaching it.

Revenue for the third quarter reached $ 3.0 billion, double the figure for 2020 and 9% higher than in 2019.

Ferraro said: “We are seeing the benefits of the initiatives we started during the early days of the pandemic and are looking to build on this positive momentum as the travel environment continues to normalize.”

In the third quarter, the Americas made a profit of 952 million dollars against the 128 million dollars of international markets. The figures were bolstered by high prices, with average daily revenue rising 44% in the US and 25% internationally, excluding exchange rate differences. The rise in tariffs was driven in part by the shortage of semiconductors for the new vehicles.

In the group’s third-quarter earnings call, Ferraro said the expansion of contactless rentals, especially end-to-end bookings with Avis QuickPass, was welcomed by customers during the pandemic.

He said there had been “sequential growth returning” in the corporate sector but that it “had not returned to the levels of 2019”. The group makes 40 percent of its revenue from commercial rentals.

He said: “Part of the growth has been in the small and medium market. They got out a little faster [than larger companies] and those came at a faster pace. ”

Ferraro added: “[Corporates] they keep cars longer, which is helping the usage curve. On average, the business customer keeps a car 30% more than in 2019.

“I expect commercial affairs to start coming back when people go back to their offices and people start accepting them in their locations.”

Ferraro said the company is “particularly encouraged by the news that vaccinated European travelers will be able to enter the United States”

“Since the announcement we have certainly seen an increase in our business models of people coming to do business here in the US. Booking models are above 2019 levels and we see the same thing that the airlines reported a week ago. about, “he said.

The future is electric

Ferraro has added fuel to the dialogue around electric vehicle production and the role of car rental companies in moving towards that future. “You will see that in the future we will be much more active in the electric scenarios as the situation develops over time,” he said, adding that Avis wants to see more models of electric vehicles available on the market to protect against parts shortages or potential recalls.

Although the CEO was optimistic about Avis Budget Group’s involvement in the future, he did not discuss any current or future commitments in the space. Last week, rival Hertz announced its commitment to purchase 100,000 Tesla Model 3s and an expansion
partnership with Uber this would make 50,000 of those available to first-rate drivers.

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