Rental car giant Hertz has filed for Chapter 11 bankruptcy protection in the US, citing “an abrupt decline in the company’s revenue and future bookings” due to the ongoing coronavirus shutdown in travel.
The company stressed its businesses including Hertz, Dollar and Thrifty rental car subsidiaries “are open and serving customers.” The move affects US-based Hertz Global Holdings, and certain US and Canadian subsidiaries, but the group’s international operating regions including Europe, Australia and New Zealand are not included in the filing, nor are its franchised locations.
In addition, the group said, “All reservations, promotional offers, vouchers, and customer and loyalty programs, including rewards points, are expected to continue as usual.”
In a statement, the company said, “Customers can count on the same high level of service and reliability, including new initiatives such as ‘Hertz Gold Standard Clean’ sanitization protocols to provide additional safety in response to the COVID-19 pandemic.”
Prior to the Chapter 11 filing, the group had taken several cost-saving steps including reducing planned fleet levels, consolidating off-airport rental locations, and implementing furloughs and layoffs of around 50 percent of its global workforce. The company also said it has $1 billion in cash on hand to support continuing operations.
“With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery,” said Hertz’ recently-appointed president and CEO Paul Stone.
“Today’s action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future.”