Lower than expected losses at AVIS

Lower than expected losses at AVIS

Car rental giant Avis Budget Group has reported a narrower-than-expected financial loss for the first quarter of 2010, with the American company buoyed by lower costs.

The company posted quarterly net loss – its sixth in the last two years - of $38 million, or 37 cents per share, compared with net loss of $49 million, or 48 cents a share a year earlier.

Tougher pricing and a resurgent United States economy also contributed to the upturn.

Excluding exceptional items, the Parsippany, New Jersey-based company lost 13 cents a share.

Avis down following announcement

AVIS chairman Ronald Nelson said earnings increased in each operating segment from a year earlier, while “volume comparisons strengthened each month during the quarter and again in April, led by an improvement in business travel”.

Revenue fell three per cent to $1.15 billion, as domestic car rental revenue declined eight percent to $880 million.

In a statement, Avis said it expected to keep the size of its rental fleet in line with demand and also expects domestic fleet depreciation costs to decline six percent to eight percent on a per-unit basis.

The group presently controls about 20 per cent of the American market.

Dollar Thrifty

Earlier this week Mr Nelson sent a letter to rival Dollar Thrifty Automotive Group, stating Avis would like to make a “substantially higher” offer than the $1.27 billion deal the car hire company reached with rival Hertz Global Holdings last week.