Avis to cut supply as downturn hits leisure rentals

Avis Europe has said its prices by 10 percent as it announced further restructuring that will include job cuts and a freeze on salaries and recruitment.

Pascal Bazin, chief executive, warned of tough times ahead and that prices would rise in April. “This is the first time prices have risen for the past six to seven years,” he said.Avis said it would make a further 5 per cent of its European workforce redundant, on top of the 600 jobs or 10 per cent of the workforce already cut last year.

The car rental giant also plans to reduce its fleet by another 5 or 10 per cent and close stations as part of a cost-cutting programme that aims to save it €16m a year.

Underlying pre-tax profits were €38m against €37.6m but the company incurred a one-off €35m restructuring charge, so reported profits were €3m compared with €33.2m. Group revenue fell marginally from €1.32bn to €1.31bn.

“The number of rentals will go down,” said Mr Bazin, chief executive, “but that doesn’t mean we’ll accept that decline.”

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Mr Bazin said the leisure market had been hardest hit, with rentals by holidaymakers, dropping 5 per cent in the second half of 2008 compared with the first half.

Avis’s business arm was is faring better, Mr Bazin said.
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