Fleet News

In the spotlight: Avis Budget UK

Four years ago, a number of analysts in America were sounding the death knell for Avis Budget Group.

Shares had slumped below $1 and the company was weighed down under a heavy debt load.

It required a major turnaround plan – and that’s exactly what the company delivered.

It restructured its loan facility, paid off debts and revised its core rental offering to exit low-price deals which were costing it money. Utilisation, higher yields and diversified manufacturer relationships became strategic objectives.

Avis also acquired Avis Europe in 2011, reuniting the global business after separation in 1986, and two years later bought the world’s biggest car share network Zipcar, which operates in a sector with bright growth prospects.

US shares are now trading above $32.

Greater financial stability is good news for UK corporate customers.

However, the UK is the market most in need of a transformation on pricing policies. Intense competition and a commoditisation of daily hire have pinned down rates, despite Avis’s best efforts.

It is now the responsibility of UK managing director Kaye Ceille, in the role since March 2012 but a company employee since 1997 when she joined Budget Rent A Car, to put the necessary processes in place to continue Avis’s drive towards profitable growth.

She has already transferred some initiatives from her native market of America in a bid to raise customer service standards and, in particular, guarantee a consistent level of service. One of those is providing field staff with the necessary training and tools.

Avis has recruited learning and development coaches to train staff to deliver excellent service and to ensure it offers “the right car at the right time at the right place”.

It has also increased the number of staff working on its counters, a reaction to customer feedback, and implemented a new tier of management to reinforce the drive for regional consistency.

The initial signs, says Ceille, are looking good.

“Our business is growing: Budget by double digits and Avis by more than GDP levels. And our airport market share has increased in the past year,” she says.

“A key way we judge ourselves is NPS . From July 2012 to May 2013 our score has increased by nine points – that’s significant.”

Ceille declines to specify the actual score – one of several moments in the interview she cites “confidential information” – but the direction of travel is clear.

She also rebuffs a question on fleet size, other than to say it has risen by 3.5% year-on-year and is “significantly higher” than the 20,000 cars stated in a Fleet News interview back in 2010. The company has no plans to enter van rental.

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