Downward trend in corporate business predicted
Avis Europe is to increase car rental charges by 10% from April.
Its ceo Pascal Bazin said it was the company's first price increase for "six or seven years."
The car rental company also announced more cuts in staff and in its fleet.
It said it expects to cut head office staff by a further 5% this year on top of the 600 redundancies (about 10% of the workforce) announced last year.
Avis said it had also put a freeze on recruitment in Europe.
The company which has outlets across Europe, Africa and the Middle East, said it was also in talks with car makers about achieving a zero increase in its fleet costs.
This is expected to lead to cuts in the number of its vehicles.
To protect its revenue, Avis said that on top of the price increase, it was also considering ending "unprofitable business" and introducing a "no show" fee for customers who failed to turn up.
Avis reported an underlying pre-tax profit for 2008 of €38m, a slight rise on the 2007 figure for 2007 of €37.6m.
But after restructuring costs of €35m, Avis said its pre-tax profit on continuing operations was €3m compared to €33.2m in 2007.
The company said it made a post tax loss of €9.9m compared with a €2.9m profit in 2007.
Mr Bazin said: "We reported a strongly resilient trading performance in 2008, despite the deteriorating economic environment and weak used car markets."
He said "rigorous revenue management and pricing actions" had helped improve revenue on rentals while there had also been a "significant reduction" in fixed costs.
Mr Bazin added: "These actions put us in a good position to face the challenges and opportunities of 2009 as recessionary pressures intensify.
"Whilst we are anticipating lower volumes, we are tightening fleet capacity and planning a further improvement in pricing and a step-change improvement in utilisation."
Figures released by Avis Europe predict a fall in turnover over the next three years from €1,313.8m in 2008 to an estimated €1,214.7m in 2011 although the company said it expected a €40.5m pre-tax profit in 2011.
But it also predicted a steady fall in turnover form corporate business, falling from €110.5m in 2008 to an estimated €100.8m in 2009, €95.4m in 2010 and €92.3m in 2011.
www.avis-europe.com