Business Spotlight News Spain News Top News UK News World News

Car-rental company Hertz files for bankrputcy

Court documents reveal that the car-hire company lost all its revenue soon after nations went into lockdown and plunged £15.3bn into debt by the end of March.

The company based out of Estero, Florida said its US and Canadian subsidiaries had filed for bankruptcy after it failed to meet a payment deadline agreed with its lenders.

The court report read: “Management has concluded there is substantial doubt regarding the company’s ability to continue as a going concern within one year from the issuance date of this quarterly report.”

Hertz  also had to cut 12,000 jobs worldwide and put 4,000 more workers on furlough.

They also had to cut a quarter of their United States- based workforce in March, it emerged.

“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.

However, operations in Europe and the UK, Australia and New Zealand are not affected by the court proceedings.

Car-rental companies largely work out of airports with 66% of their revenue derived from international air passengers.

However, with the whole world on lockdown and major US and Canadian airports not getting the flow of tourism and business travel they normally do, companies have had to cease operations and default on payments to creditors.

Hertz were already 19 billion dollars in debt before the corona crisis has they fought competition from newer companies such as Avis and Uber.

Avis has also reported huge losses with a 158 million dollar loss in the first three months this year and an 80% loss in sales.

More RTN News Articles

Read more World News
Read More Spain News

 

 

 

Spread the RTN News!

Leave a Reply

Your email address will not be published. Required fields are marked *