The terrorist attacks in the United States have decimated transatlantic travel, destroying inbound demand for hire cars. Martin Ward, CAP Network National Research Manager, said: 'Bookings are believed to be 20% down. This could potentially cause rental companies to dispose of more cars in the short term and cancel new ones.'
Avis Europe's long-haul volumes (about 15% of its business) are down 30 - 35% year-on-year, while its corporate volumes (27% of its business) are 10% lower.
So far its European and domestic business has been largely unaffected, an experience mirrored at other major rental operators, but all are now anxiously awaiting customer reaction to an escalation of military action. They are also holding urgent discussions with manufacturers about future supply and the deferment or cancellation of orders.
'Immediate actions have been taken to reduce fleet, freeze recruitment and capital expenditure and limit travel spend,' said Avis.
In New York, Hertz vice-president Richard Broome said the company was evaluating how quickly it could expect consumer confidence to return: 'We need to replenish our fleet, but the question is whether we replenish it at 100% as we take cars out of service. We do not want to over-react to something that might be a short term phenomenon.'
Budget Rent A Car has suffered a doubling in the number of 'no shows' as inbound business from the US 'dropped dramatically', said Roeland Moens, Budget International's vice-president sales and marketing.
He added that the company's franchise structure (only seven of its 110 UK sites are corporately-owned) had reduced the impact of the crisis because 'our franchise operations are far more dependent on local business.'
'Budget is currently defleeting in line with the end of the peak season. The terms of the fleet disposal are being met and as our fleet orders are not all yet confirmed for next year, Budget's fleet requirements going forward can be adjusted in light of projected business trends,' said Moens.
- Manufacturers and rental firms cooperate to head off crisis. Click here.