Avis Budget Group executives focused on reducing fleet size, improving utilization and prioritizing “higher margin businesses” during an earnings call Friday.
“Our first goal has always been to right-size our fleet throughout the year, which has allowed us to continue to improve utilization, which was nearly higher this quarter than the same period last year,” said Joe Ferraro, CEO of Avis Budget. “We’re on track to start 2025 with far fewer cars than we started with.” [with] 2024. “
The average size of ABG’s rental fleet in the third quarter was 735,841 vehicles, a decrease of approximately 2.5% from the third quarter of 2023. Vehicle utilization rate increased from 70.4% to 72.1%. In the Americas, fleet size fell 3.7% to 531,261 vehicles, while vehicle utilization increased from 70.3% to 71.5%. Although the average rental fleet in the international market increased from 202,700 to 204,580 vehicles, vehicle utilization also increased from 70.6% to 73.7%.
“We will continue to improve, implement further operational improvements and remain focused on our fleet discipline,” Ferraro said. “We expect vehicle utilization in the fourth quarter to be higher than any fourth quarter in our history.”
As for what the definition of “high-margin business” is, executives did not elaborate.
“We are taking a prudent approach to volume and focusing on higher-margin businesses,” Ferraro said. “In doing so, we have chosen to abandon lower-margin business. In times like these, it makes more sense for us to abandon lower-priced business due to fleet costs or outliers within our historical standards, especially from those with Brand-agnostic customers.”
Avis Budget Third Quarter Indicators
Avis Budget reported third-quarter revenue of $3.48 billion, down 2% year-over-year. Americas revenue fell 4% to $2.64 billion, while international revenue increased 1% to $840 million. Net profit was $238 million, compared with $627 million a year ago.
Total rental days remained relatively stable in the third quarter at nearly 48.8 million days. Daily revenue decreased from $72.97 to $71.32. The number of rental days in the Americas decreased 2% year-on-year to 34.9 million days. The segment’s daily revenue fell to $75.61 from $76.70. Compared to the third quarter of 2023, international rental days increased 5% to nearly 13.9 million days, while the segment’s RPD fell from $62.86 to $60.52.
Source link
