Road & Rail

Hertz files for bankruptcy protection following CEO’s resignation

Car rental company Hertz has taken further action to try and soften the blow from the coronavirus pandemic.

Hertz Global Holdings, along with some of its North American and Canadian subsidiaries, filed voluntary petitions for reorganisation under Chapter 11 in the US Bankruptcy Court late last week.

“The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings,” Hertz said in a statement.

“Hertz took immediate actions to prioritise the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity.

“However, uncertainty remains as to when revenue will return and when the used-car market will fully reopen for sales, which necessitated today’s action.

“The financial reorganisation will provide Hertz a path toward a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery.”

Hertz’s principal international operating regions including Europe, Australia and New Zealand are not included in the bankruptcy protection proceedings. The company’s franchised locations also are not included.

All of Hertz’s businesses globally, including its Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries, are open and serving customers.

Kathryn Marinello

Furthermore, all reservations, promotional offers, vouchers, and customer and loyalty programs, including rewards points offered by the company and its subsidiaries are expected to continue as usual.

As of the filing date, the company had more than US$1 billion ($1.5 billion) in cash on hand to support its ongoing operations.

Depending upon the length of the COVID-19 induced crisis and its impact on revenue, Hertz said it may seek access to additional cash, including through new borrowings, as the reorganisation progresses.

Hertz had already taken a number of other actions to help it stay afloat prior to filing for bankruptcy protection.

These included reducing planned fleet levels through vehicle sales and by cancelling fleet orders, consolidating off-airport rental locations, deferring capital expenditures and cutting marketing spend, and implementing furloughs and layoffs of 20,000 employees (approximately half of its global workforce).

The bankruptcy protection filing comes not long after Hertz announced the resignation of president and CEO Kathryn Marinello, who plans to continue with the company in a consulting position for up to one year to support a smooth transition.

Replacing Marinello is Paul Stone, who was most recently Hertz’s executive vice president and chief retail operations officer for North America.

Prior to Hertz, Stone served as senior vice president and chief retail officer at Cabela’s, one of North America’s leading outdoor recreation retailers.


Featured image: iStock/tupungato

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Travel Agents

Flight Centre showcases agents’ expertise (and unveils new captains) in first-ever global brand campaign

A new captain and co-captains, a fresh tagline, a new microsite and a TikTok account – Skroo and his team sure didn’t muck around with Flight Centre’s first global campaign.

Share

CommentComments

Tourism

Experience Co expands portfolio with two big acquisitions

After getting its house in order and navigating its way through COVID, the ASX-listed company has made a couple of very big plays.

Share

CommentComments

Cruise

Royal Caribbean names new sales boss for Australia and NZ

After pulling a Michael Jordan and coming out of retirement, the much-loved and well-respected Peter McCormack is once again hanging up his boots at Royal Caribbean.

Share

CommentComments

Aviation

Air Canada introduces new refund policy for COVID-affected flights

And, in good news for agents, you can hold on to your loonies, with the Canadian carrier confirming it won’t recall any sales commissions on refunded tickets that it processes.

Share

CommentComments

Wholesalers

AAT Kings to relaunch #EmptyEsky series with new trips

Travel Weekly’s esky is usually full of beers. However, we’d happily drink them all to be ready for these new trips.

Share

CommentComments

Events

“So disappointing”: Bali-themed festival forced to apologise, issue refunds and offer free entry

Organisers of a festival aiming to quench the thirst of Aussies who would rather be in Bali right now appear to have missed the mark by quite a bit.

Share

CommentComments

Tourism

ScoMo “in no hurry” to reopen Australia’s international borders

It appears the likelihood of more travel bubbles being announced soon is about the same as ScoMo’s beloved Sharkies winning the NRL Premiership this year … not good.

Share

CommentComments

Destinations

YIPPEE! Two-way trans-Tasman bubble finally kicks off

Today is the day, folks! As of midnight last night, the two-way trans-Tasman bubble is FINALLY open! Get the lowdown on NZ flights and tour discounts right here.

Share

CommentComments

Technology

“Do not trust the GPS”: Google Maps places rural town 85km north of its actual location

According to the mayors of a handful of rural Aussie towns, this isn’t the first time the popular travel app has caused problems for them.

Share

CommentComments

Travel Agents

“We call it the triple win”: Global Work & Travel launches new affiliate program

Have you been searching for ways to earn some much-needed moolah ever since JobKeeper ended? Here’s one that doesn’t involve busking on the street or spinning signs.

Share

CommentComments

Cruise

CLIA to welcome 18 new ships with virtual showcase

The association is bringing you all the latest vessel news from the maritime world with this exclusive showcase.

Share

CommentComments

Hotels

GM appointed to lead Best Western’s newest Aussie hotel

Australia’s newest luxe boutique hotel has named its GM who, according to the accompanying press photo, has a strong beard game.

Share

CommentComments