ECONOMY

Car rental firm cuts over €30 million in spending

car-rental-firm-cuts-over-e30-million-in-spending

Rental car company Avis, aware that it is in a sector that has been especially hard hit by reduced travel and tourism, is implementing an extensive cost-cutting program to get through the crisis.

It expects to cut some €30 million by reducing the number of outlets, renegotiating rent, as well as a minimum guaranteed commission with the airports it operates at.

It also reduced acquisitions for its car fleet by 7,000 thus far, forgoing some revamping for the lower cost. For the whole year, it will buy fewer than 80,000, compared to 114,000 in 2019.

Avis expects turnover from short-term rentals to be down 40% this year. But for the March-June period income was down 80% compared to the same period last year. This decline follows eight years of rapid earnings growth.

In 2019, turnover grew 7.5% to €190.7 million, with net profits at €24 million, from €18.5 million in 2018.