Chauffeured car hire companies hurt in downturn

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Car Rental News - 02/02/2009


Australia’s independent limousine companies are losing clients and many are going out of business.

With many of their corporate clients being told to reduce travel expenses and make do with taxis, some operators are angering their rivals by offering rates just above taxi fares in order to stay afloat.

One limousine operator based in Sydney, Kris Korkian, said that business fell 30 per cent in December and January, as compared with the previous year. These are typically his busiest months. Penguin Limousine Service, Korkian’s company, has a fleet of nine vehicles. He believes that many small operators will soon fail.

"In Sydney, there are 800-900 corporate sedan hire cars and about 500 of those are single operators," he noted. "If they rely heavily on three to four clients and if one or two don't travel any more that's 50 per cent of their business."

Korkian said he’d been told that some limousine operators are accepting $50 for airport trips normally priced at more than $100. Cab fare runs around $45 for the trip.

Graeme Matthews, secretary of the Limousine Association Queensland, commented that in his state the downturn is caused a drop in business of 30-40 per cent.

"Only today I have had a phone call to say that three executives that we move around were retrenched on Friday," he said.

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