New Model For Avis

As travellers return from their holidays with tales of exorbitant car hire prices, Avis Europe has announced a new model for car rentals.

As volume declined by 9.4 percent in the six months to June 30, car rental firms have proven that they are not immune to the downturn in the global economic crisis that has affected airlines and hotel operators.

Specifically for Avis, car hire also fell by 6.8 percent, but was stronger in July with a drop of only 2.9 percent.

The downturn of business travel has also hit Avis hard, as business car hire is the company’s key market.

It hasn’t been all bad news for the car rental industry as higher prices have lead to healthier profit margins, with most companies forced to increase prices and sell vehicles as they have been unable to obtain credit to upgrade their fleets.

Avis have battled the downturn by cutting back its fleet by 16% which led to an increase in utilisation up by 5 percent.

As well as streamlining fleet management, Avis has also reduced its £1.1 billion debt by closing poor performing outlets and shedding jobs.  Avis has also cut back on buying new cars this year by 30 percent.

The company has also announced plans to expand in Asia as well as its UK based operations after a relatively successful summer peak season, but forecasts for winter aren’t so positive.