Avis disposed of 35,000 cars in March and cancelled 80% of incoming rental vehicle orders in the United States for the remainder of the year.
Photo via Travelarz/Wikimedia.
Avis Budget Group revenues of $1.8 billion for the first quarter of 2020, a decrease of 9% compared to the first quarter last year, the company reported on Monday.
The company reported a net loss of $158 million, adjusted net loss of $103 million, and adjusted EBITDA loss of $87 million.
The beginning and end of the quarter stand in stark contrast: Year-to-date February revenues were up 9% and adjusted EBITDA was up about $60 million. However, the pandemic impacted travel activity and shelter-in-place requirements caused significant deterioration in revenue through March.
Avis disposed of 35,000 cars in March and cancelled 80% of incoming rental vehicle orders in the United States for the remainder of the year. The company has laid off or furloughed 70% of its employees.
“I am incredibly proud of our team,” said Joe Ferraro, Avis Budget Group Interim CEO. “We ended February off to a record start to the year, and in less than a week, we pivoted the entire organization to respond to the unprecedented effects of the pandemic on our business and the economy. Our top priority continues to be the safety of both our employees and our customers. Our front-line employees went above and beyond to assist people in getting home, traveling to care for loved ones or to provide essential services, including first responders and delivery services.”
As of March 31, the company reported available liquidity of $1.6 billion. The company estimates its cash burn for the second quarter 2020 will be approximately $800 million.
Based on current operational assumptions, the company reported it believes it will have adequate liquidity for the balance of 2020 and into 2021.
Avis anticipates revenues being approximately 80% lower in April and May compared to the prior year, with a gradual recovery in June and improving thereafter, as shelter-in-place restrictions are lifted and leisure travel begins to resume.
In markets where shelter-in-place restrictions are being lifted, Avis said it is seeing early indications of improving demand.