Avis Budget Group has reported
adjusted EBITDA of US$1,057 million, the highest figure in the company's 75-year
history. CEO Joe Ferraro said that the company had set the figure as a target in
2014 but that the headwinds of Covid had delayed its achievement.
Revenues for the third quarter
reached US$3.0 billion, double the figure for 2020 and 9 per cent above 2019.
Ferraro said: “We are seeing
the benefits of initiatives we began during the early days of the pandemic and
look to build on this positive momentum as the travel environment continues to
normalise.”
In the third quarter, the
Americas accounted for earnings of US$952 million against US$128 million from
international markets. The figures were bolstered by strong pricing, with
average revenue per day up by 44 per cent in the US and 25 per cent
internationally, excluding exchange rate differences. The rise in rates has
been driven in part by the shortage of semiconductors for new vehicles.
In the group’s Q3 earnings call, Ferraro
said that the expansion of contactless rentals, particularly end-to-end
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 was “not back to
2019 levels”. The group makes 40 per cent of its revenues from commercial
rentals.
He said, “Some of the growth has
been in the small and mid-market. They have come out a bit quicker [than larger
companies] and those have come at an enhanced rate.”
Ferraro added, “[Corporates] are
keeping cars longer which is helping the utilisation curve. On average, the
commercial customer is keeping a car 30 per cent longer than in 2019.
“I fully expect commercial
business to start coming back as people go back to their offices and people
start accepting them into their locations.”
Ferraro said the company was “particularly
encouraged by news that European vaccinated travellers will be allowed entry to
the US”.
“Since the announcement we have definitely seen
an increase in our business patterns of people coming to do business here in
the US. Booking patterns are above 2019 levels and we see the same thing the
airlines reported a week or so ago,” he said.
Ferraro added fuel to the dialogue around electric vehicle production and the role of car rental companies in advancing toward that future. "You'll see us going forward being much more active in electric scenarios as the situation develops over time," he said, adding that Avis wants to see more EV models available in the market to guard against parts shortages or potential recalls.
While the CEO was bullish on Avis Budget Group's involvement in the future, he didn't discuss any current or future commitments in the space. Last week, rival Hertz announced its commitment to purchase 100,000 Model 3 Teslas and an expanded partnership with Uber that would make 50,000 of those available to top-rated drivers.