The Hertz Corporation - Next victim of COVID-19

4 replies

planesa380

Virgin Australia - Velocity Rewards

Member since 05 Sep 2013

Total posts 61

The Hertz Corporation owner of: ‘Dollar Rent A Car', ‘Hertz Rent A Car', and ‘Thrifty Car Rental' is on the verge of Chapter 11 Bankruptcy in the United States.

Per The Wall Street Journal (By Alexander Gladstone on May 18, 2020) "Apollo Global Management Bets on Hertz Failure ... and has acquired a sizable position in insurance contracts called credit default swaps on Hertz's corporate debt."

Per Fox Business/The Wall Street Journal (April 29, 2020) "Hertz Global Holdings Inc. is preparing for a possible bankruptcy filing after the rental-car company failed to make lease payments to preserve cash amid the Covid-19 pandemic ... Hertz and some of its creditors have hired restructuring advisers, people familiar with the matter said. Hertz has $17 billion worth of debt, which includes $3.7 billion of corporate bonds and loans and $13.4 billion of vehicle-backed notes."

Per USA Today (by Mike Snider on May 18, 2020) "Rental car company Hertz has named a new CEO to replace outgoing executive Kathryn Marinello. Paul Stone, who had served as Hertz's executive vice president and chief retail operations officer, North America, will become CEO and president immediately, the company announced Monday. ... He began his career with Sam's Club and Walmart where he became western U.S. divisional senior vice president. "

Do you believe that Hertz Corporation can turn thing around?

Remember that a lot of their location are franchised so there might be little short term impact for consumers.

Also note that ‘Thrifty Australia & New Zealand' brand is under the ownership (International Master License Agreement) of the NRMA (otherwise known as the National Roads and Motorists' Association).

Poll: Do you think that Hertz will be able to survive without using Chapter 11 Bankrupts or another form of reorganization of debt?

Amt

Member since 12 Nov 2018

Total posts 4

How is a company that has existed in a very comfortable duopoly for so many decades struggling financially? Has Sixt, Europe car pinched that much of the market?

Personally I think the rental car pricing strategy of gouging anyone who wants a decent car at a peak time for 100's of dollars a day and an extra 50% extra for insurance while selling budget cars at a loss at 20-30 bucks a day is over. Both Avis and Hertz have 50 year old IT infrastructure that means extra employees, more costs, longer waiting times and dissatisfied customers.

I personally said good day to Hertz when I had an ancillary product called something along the lines of ‘100% complete coverage, total no worries peace of mind, major exclusions, gross negligence and criminal activity'

And their response to my refusing to pay €300 was to bill a card for €800 because that coverage applied to the car and a scratched wheel didn't count because ‘wheels are not part of the car'

GregXL

Qantas - Qantas Frequent Flyer

Member since 26 May 2014

Total posts 300

Cause of Hertz financial issues, mmm perhaps Covid-19? The hire car companies have not been as high profile as airlines, airports etc, but they must have suffered a similar loss of business. Avis cars are being offered to essential workers at bargain prices, because they would otherwise be parked and probably at additional cost given that Avis's depots would be full.

Last editedby GregXL at May 20, 2020, 11:32 PM.

GBRGB

Qantas - Qantas Frequent Flyer

Member since 21 Jan 2014

Total posts 245

Not surprising, ride share is taking lots of the business market. Last car I hired just before COVID started was an I30 in Mackay, $179 for the day, did 37km, never again, even taxis would be half that price.

Joe

Member since 03 May 2013

Total posts 101

Car hire is THE biggest wrought of the entire travel industry. Many times you can use a driver for same price or Uber much cheaper....all that stress at pick up regarding insurance coverage options and guilt trips, uncertainty if something goes wrong even when you do fork out another 40-50% for the insurance...will the rip off insurance even cover it? I avoid car rental unless its essential.

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