Avis nets $57 million in profits - Car Rental News
Avis nets $57 million in profits
Car Rental News - 12/11/2009
Car rental giant reports significant improvement on last year's performance
The car rental company Avis Budget Group announced a net profit of $57million in its third quarter. In the same quarter last year, the company had reported a loss of $1.01 billion.
Strong domestic leisure pricing offset soft demand levels. The company also indulged in intense cost control and management, thus managing to post the high profit levels. The forecast of realized cost savings increased to $350-400 million.
The third quarter was significantly aided by the strength of the used car market. This allowed the company to manage the fleet of cars according to the demand, and pricing also was optimized.
Car rental revenues decreased 14% driven mainly by a 21% decrease in rental days. 9% increase was noted by time and mileage revenue. Car fleet costs decreased by 25% primarily as 21% of the fleet was made redundant. Also a 4% decrease was noted in per unit maintenance cost.
Despite the strong gains, Avis budget group still retained a cautious outlook. The company expects rental volumes and the overall macroeconomic climate to be volatile and challenging. The fourth quarter is expected to yield lower returns compared to the 2008 period.