Avis Budget Q3: Limiting Fleet, Seeking 'Higher-Margin Business'
Avis Budget Group executives during a Friday earnings call focused on lowering its fleet size, increasing utilization and prioritizing "higher-margin business."
Aliver
Avis Budget Group executives during a Friday earnings call focused on lowering its fleet size, increasing utilization and prioritizing "higher-margin business."
"Our primary goal has always been to adjust our fleet size throughout the year, which allowed us to continue to improve utilization with this quarter finishing nearly two points above our prior year," Avis Budget CEO Joe Ferraro said. "We are on track to start 2025 with substantially fewer cars than we started [with] in 2024."
The average size of ABG's third-quarter rental fleet was 735,841, down about 2.5 percent from Q3 2023. Vehicle utilization increased to 72.1 percent from 70.4 percent. For the Americas, fleet size decreased 3.7 percent to 531,261, while vehicle utilization increased to 71.5 percent from 70.3 percent. Though the average rental fleet for the international segment increased to 204,580 from 202,700, vehicle utilization also increased to 73.7 percent from 70.6 percent.
"We will continue to improve as we implement further operational enhancements and remain laser-focused on our fleet discipline," Ferraro said. "We anticipate strong vehicle utilization in the fourth quarter that surpasses any fourth quarter in our history."
As to what defines "higher-margin business," executives didn't elaborate.
"We took the measured approach to volume and focused on higher-margin business," Ferraro said. "In doing so, we elected to forego lower-margin business. In times like this, with fleet costs or outliers through our historic norms, it makes more sense for us to pass on lower-price business, especially from brand-agnostic customers."
Avis Budget Q3 Metrics
Avis Budget reported third-quarter revenue of $3.48 billion, down 2 percent year over year. Americas revenue was down 4 percent to $2.64 billion, while international was up 1 percent to $840 million. Net income was $238 million compared with $627 million one year prior.
Total third-quarter rental days remained relatively steady at nearly 48.8 million. Revenue per day decreased to $71.32 from $72.97. Americas rental days decreased 2 percent year over year to 34.9 million. That segment's revenue per day decreased to $75.61 from $76.70. International rental days increased 5 percent compared with Q3 2023 to nearly 13.9 million, while that segment's RPD declined to $60.52 from $62.86.
