Car rental pioneer files for bankruptcy as global travel halted
- Dan Primack, author of Axios Pro Rata
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.