Avis Budget Group reported adjusted earnings of $1.06 billion, the highest number in the company’s 75-year history. CEO Joe Ferraro said the company set the number as a target in 2014 but the headwinds of Covid delayed its achievement.
Third-quarter revenue was $3.0 billion, double the figure for 2020 and 9 percent above 2019.
“We are seeing the benefits of the initiatives we started during the early days of the pandemic and look forward to building on this positive momentum as the travel environment continues to return to normal,” Ferraro said.
In the third quarter, the Americas took in profits of $952 million versus $128 million from the international markets. The numbers were bolstered by strong pricing, with average daily revenue up 44 percent in the United States and 25 percent internationally, excluding exchange rate differentials. The price hike was driven in part by a shortage of semiconductors for new vehicles.
On the group’s third-quarter earnings call, Ferraro said the expansion in contactless rentals, particularly one-stop bookings with Avis QuickPass, had been welcomed by customers during the pandemic.
He said there had been “sequential growth coming back” in the corporate sector but “it has not returned to 2019 levels”. The group generates 40 per cent of its revenue from commercial rentals.
He said, “There was some growth in the small and medium markets. They came out a little bit faster [than larger companies] Which came at an enhanced rate.”
Ferraro added,[Corporates] Cars keep longer which helps the usage curve. On average, a commercial customer keeps a vehicle 30 percent longer than in 2019.
“I fully expect business to start coming back when people get back to their offices and people start accepting them into their positions.”
Ferraro said the company was “particularly encouraged by the news that vaccinated European travelers will be allowed into the United States.”
“Since the announcement, we’ve certainly seen an increase in our business patterns of people coming to do business here in the US, with booking patterns in the US exceeding 2019 levels and we’re seeing the same thing that airlines reported a week or so ago,” he said.
Ferraro has added fuel to the conversation about electric car production and the role of car rental companies in advancing toward this future. “You will see that we move forward more actively in electric scenarios as the situation evolves over time,” he said, adding that Avis wants to see more EV models available on the market to guard against parts shortages or potential recalls.
While the CEO was optimistic about Avis Budget Group’s future involvement, he did not discuss any current or future commitments in the space. Last week, rival Hertz announced a commitment to buy 100,000 Model 3 Teslas and an expanded partnership with Uber that will make 50,000 of those available to top-rated drivers.