Travel has been a victim of the virus restrictions….
It will continue to operate…..
But as a much smaller company ….maybe….
“Today’s action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future,” Paul E. Stone, its chief executive, said in a statement.
The bankruptcy filing excludes operations in Australia, Europe and New Zealand as well as the company’s franchisee locations. Hertz also said that it had sought aid from the federal government, but that funding for its industry “did not become available.”
Though it had piled up $17 billion in debt, Hertz, which also owns the Dollar and Thrifty brands, was reporting healthy sales at the start 2020. The company’s revenue rose 6 percent in January and February.
But the pandemic dealt what the company has described as “a rapid, sudden and dramatic” blow. Sales dried up in March as much of the world started to shelter at home. Airports, where Hertz and its competitor Avis Budget Group earn most of their revenue, turned into ghost towns.
By late March, the company started to cut back on spending, sold some of its cars, furloughed workers and combined nearby outposts. Hertz management suggested that they had some room to maneuver, including access to $1 billion in cash.
“Hertz is a resilient company, with resilient brands and resilient people,” its chief executive, Kathryn Marinello, said in a statement at the time.
But Ms. Marinello resigned last week, and Hertz has since laid off or furloughed 20,000 employees, half of its work force. The company had cut pay for senior leaders in March, too, but reversed that decision recently.
The company’s march to bankruptcy began in late April when it missed a payment on a lease for some of its fleet, which includes about 667,000 cars, sport utility vehicles and other vehicles worldwide. It persuaded lenders to give it until midnight on Friday to put together a financial plan that they could accept. But in a filing this month, Hertz acknowledged the enormity of the task.
“If our business does not recover quickly and we are unable to successfully restructure our substantial indebtedness, obtain further waivers or forbearance or raise additional capital, there is substantial doubt that we will be able to continue as a going concern,” the company said….