Hertz Global Holdings Inc. and Avis Budget Group Inc. rose after Hertz said it’s raising prices by as much as $5 a day in June in expectation of a busy summer travel season.
Hertz is raising prices $20 a week at airports and $10 a week in its neighborhood locations, starting June 14, because it expects “strong seasonal demand,” the company said in a statement. Hertz has been winnowing and improving its fleet and has increased by 47 percent the number of vehicles with 30,000 miles or less. Hertz said it will buy fewer 2015 vehicles and sell more of the cars and SUVs in its fleet.
“What was a positive surprise was the price increase and the commentary around capacity discipline, targeting fleet growth less than demand,” Chris Agnew, an analyst with MKM Holdings LLC, said in an e-mail.
Hertz rose 5.1 percent to $20.55 at 11:21 a.m. while Avis jumped 8.5 percent to $55.41 after earlier climbing almost 10 percent for the biggest intraday gain since December.
Hertz Chief Executive Officer John Tague, who was hired in November, said the company, which is restating three years of financial statements, is making progress in fixing its fleet and operational issues. Hertz said Thursday it doesn’t expect to file its 2014 annual report before July.
Hertz said it will close about 200 stores, 5 percent of its off-airport locations, which will save $10 million a year. Hertz said it sold 43 percent more used vehicles in the first quarter than it did a year earlier.
Hertz investors had sought the ouster of its previous CEO, Mark Frissora, who ran the company for eight years, because of operating and accounting missteps.
Hertz had been poised to reap the benefits of higher prices after the consolidation it sowed in the rental-car industry. Its acquisition of Dollar Thrifty shrank the number of major rental- car firms in the U.S. to three from four. Those four, including closely held Enterprise Holdings Inc., controlled about 98 percent of airport car rentals in the U.S., the Federal Trade Commission said in 2012 when reviewing the combination.
To contact the reporter on this story: Mark Clothier in Southfield, Michigan, at firstname.lastname@example.org To contact the editors responsible for this story: Jamie Butters at email@example.com Niamh Ring
This article was written by Mark Clothier from Bloomberg and was legally licensed through the NewsCred publisher network.