May 23, 2020 - Economy

Car rental pioneer files for bankruptcy as global travel halted

Dan Primack

This Hertz in Paramus, N.J., closed for the pandemic. Photo: Ted Shaffrey/AP

Hertz — which was was heavily indebted, but with its stock at a two-year high before the pandemic — filed for bankruptcy last night after global travel halted.

Why now: The Florida giant's nearly 700,000 vehicles have been largely idled.

Most of the pandemic-era bankruptcies — J. Crew, Nieman Marcus, J.C. Penney and Pier 1 — were for companies that were already on the brink, and the pandemic pushed them over.

Hertz generates a huge percentage of its revenue from rentals at airports, where traveler traffic has fallen dramatically.

318,000 people went through TSA checkpoints on Thursday, heading into Memorial Day weekend.

Last year, that number was nearly 2.7 million.

What to watch: Creditors could push for Hertz to liquidate part of its fleet, resulting in falling prices for used cars.

Remember: Bankruptcy doesn’t necessarily mean the companies disappear. Pier 1 is liquidating, but the others could stick around.

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Car rental pioneer files for bankruptcy as global travel halted

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