Car rental demand has held steady even as the Covid-19 delta variant has spread, Hertz Global Holdings president and CEO Paul Stone noted in pre-recorded commentary released Monday.
"While uncertainty remains due to new Covid variants, the rental car industry was among the first to see signs of the rebound, as people felt more comfortable traveling in a rental car where they had more control over their experience," Stone said in the commentary, released in conjunction with Hertz's second-quarter earnings report.
Last week, Avis similarly reported in its earnings call that the variant had not handicapped its quarterly bookings.
For second quarter of 2021, Hertz generated revenue of $1.9 billion, up 62 percent from the first quarter, the company reported. The quarter over quarter uptick reflected strong leisure travel demand coupled with tighter fleet inventory management, according to the company.
Like Avis, Hertz is doing its best to maintain fleet availability amid a global chip shortage affecting rental car availability, which it expects to continue into next year. "We are working closely with our valued [auto manufacturer] partners to navigate the ongoing chip shortage that we expect will continue into 2022," said Stone. "We anticipate headwinds such as continued fleet capacity constraints and higher maintenance costs. On the flip side, as tailwinds we anticipate sustained and improved industry yields and strong residual market values."
Adjusted second-quarter corporate earnings before interest, taxes, depreciation and amortization amounted to $639 million, a 34 percent margin. Hertz attributed the improvement to strong revenue, efficient fleet management and over $400 million of structural and recurring cost reduction. Net loss totaled $168 million, which includes $633 million in reorganization expenses.
Hertz completed the Chapter 11 restructuring process on June 30. The car rental company anticipates a public offering, including an investor roadshow and relisting on a major exchange by the end of 2021.
"Hertz delivered an outstanding second quarter as travel continued to rebound," said Stone. "With resurgent demand and tight supply across the industry, we remained agile in managing our fleet to meet customers' needs. At the same time, we benefited from the important operational and financial improvements we made through our restructuring process."
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