Avis Budget's second-quarter revenue was only a third of what it was a year ago, but the company expects revenue for the rest of the year will at least cover costs.
The car rental company reported revenue of $760 million for the quarter, down 67% year over year. Rental days were down 59% year over year and by about the same rate for rentals both inside and outside the Americas.
Even so, the company has seen "consistent sequential week-over-week increases" in rental volume, culminating in "their best volume to date" in late July thanks to increased leisure activity, Avis Budget Group CEO Joe Ferraro said. In June, revenue was down 59% year over year, compared with a 78% decrease in April.
While rentals nearly are all leisure at this point, the company expects it could gain some new corporate business as companies figure out their travel programs amid the pandemic.
"The question is going to be: What do travel policies look like coming out of this?" CFO John North said during an earnings call. "Is there an opportunity for us to pick up some share going forward if corporate travelers are moving around and are more likely to rent a car than take a flight? Are they more likely to rent a car versus hopping into a ride-hail vehicle? Those are things we've certainly thought about."
At the same time, Avis Budget has been cutting costs, including getting rid of more than 100,000 vehicles from its fleet and canceling orders on more than 185,000 vehicles, shrinking its fleet by 26% year over year as of the end of the quarter. It also has cut about 60% of its workforce.
With those measures and continued growth in demand, the company expects "both positive cash flow and adjusted [earnings] for the remainder of 2020," according to Ferraro. Avis Budget Group reported a net loss of $481 million for the quarter, compared with net income of $62 million in the second quarter of 2019.
Source: Business Travel News