25 MAY 2020
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Car rental giant Hertz has filed for Chapter 11 bankruptcy protection in the US after 102 years of trading. This does NOT include its international operations, so any pre-paid bookings made for non-US locations should be safe – for now.
It is also important to remember that many smaller Hertz outlets, especially off-airport ones, are franchises. These would not be impacted if the company did disappear for good.
In the past several major American airlines have taken the same route after financial problems including American, Delta and United, all (pre-Covid-19) now profitable airlines.
Hertz also owns Dollar, Thrifty and Firefly brands which are also affected by this filing. Its fleet size was 1.7m last year
Chapter 11, of course, is NOT ‘receivership’ in the UK sense. Chapter 11 is effectively a standstill arrangement, which gives Hertz breathing space to restructure its affairs without the risk of its assets being seized by creditors.
It is difficult to imagine any scenario in which the Hertz brand will disappear. At the end of the day, the brand is the ONLY real asset that the company has. It does not own any of its cars outright and the only ‘assets’ it has are its customer list and leases on prime airport pick-up locations.
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