U.S. first-quarter revenue for publicly held U.S. car rental companies Hertz Global Holdings and Avis Budget Group was boosted by the continued rebound in travel spending, though Hertz's bottom line fared better than Avis Budget's during the first full quarter since Hertz took ownership of smaller competitor Dollar Thrifty Automotive Group.
Hertz had a Q1 net income of $18 million, compared with a year-earlier loss of $56.3 million. Revenue jumped 24%, to $2.44 billion. While Hertz didn't disclose how much of that increase stemmed from Dollar Thrifty, the company did say that U.S. transaction days surged 32% from a year earlier, while rental rate per transaction day rose 4.8%.
The year "is off to a strong start," Hertz CEO Mark Frissora said on an April 30 conference call with analysts, adding that off-airport sales were particularly strong. "We really are operating on all cylinders."
After two years of pursuit, Hertz completed its acquisition of Dollar Thrifty in November, giving Hertz about a quarter of the U.S. market. Privately held Enterprise Holdings accounts for a nearly 50% share, according to trade publication Auto Rental News.
Meanwhile, Avis Budget, which controls about a fifth of the U.S. market, boosted Q1 revenue by 4.2%, to $1.69 billion, with North America sales advancing 6% almost exclusively on higher rental rates.
Still, Avis Budget's first-quarter loss doubled from a year earlier, to $46 million, as fleet costs rose faster than revenue.
Specifically, vehicle depreciation costs jumped 21%, to $386 million, while European operations were hindered because of lower pricing and higher costs.
CEO Ronald Nelson, in a May 1 statement, called the higher fleet costs "expected."
Last year, Hertz's revenue increased 8.7%, to $9.02 billion, while Avis Budget's revenue jumped 25%, to $7.36 billion, largely on its acquisition of Avis Europe in late 2011.
By comparison, Enterprise, which doesn't report profit numbers, said last year that it boosted revenue for the year ended July 31 by 9.2%, to $15.4 billion.
Car-sharing
Both Hertz and Avis Budget approached the second quarter with a more aggressive focus on the rapidly growing car-sharing market.
Avis Budget in March completed its acquisition of segment leader Zipcar. It accounted for about 1% of Avis Budget's revenue increase, though it said Zipcar's impact on first-quarter earnings was immaterial.
Hertz last month said it would pursue car-sharing customers under its Hertz 24/7 service starting in late summer by equipping much of its fleet with self-service technology that will allow for hourly vehicle rentals and keyless entry.
More details will be revealed in late spring, it said.
The company launched its Hertz on Demand car-sharing service in 2008 and offers it in about 200 cities and at more than 50 colleges and universities in the U.S.
Hertz also said last month that it acquired a 20% stake in China Auto Rental, China's largest car rental company. China Auto Rental doubled its revenue last year, to $250 million, and has a fleet of 50,000 vehicles.
Follow Danny King on Twitter @dktravelweekly.