We operate two of the most recognized brands in the global vehicle rental industry
through Avis and Budget. Avis is a leading rental car supplier to the premium
commercial and leisure segments of the travel industry and Budget is a leading
rental car supplier to the price-conscious segments of the industry. We believe
we are the largest general-use vehicle rental operator in each of North America,
Australia, New Zealand and certain other regions we serve, based on total revenue.
We maintain the leading share of airport car rental revenue and we believe we
operate the second largest consumer truck rental business in the United States
based on available information.
Our car rental operations generate significant benefits from operating two
distinctive brands that target different industry segments but share the same
fleet, maintenance facilities, systems, technology and administrative infrastructure.
We believe that Avis and Budget both enjoy complementary demand patterns with
mid-week commercial demand balanced by weekend leisure demand.
Our operations have an extended global reach that includes approximately 6,700
car and truck rental locations in the United States, Canada, Australia, New
Zealand, Latin America, the Caribbean and parts of the Pacific region. On average,
our rental fleet totaled more than 410,000 vehicles. We rent our fleet of approximately
30,500 Budget trucks through a network of approximately 2,400 dealer operated,
210 company operated and 100 franchisee operated locations throughout the continental
United States. We also license the use of the Avis and Budget trademarks to
multiple licensees in areas in which we do not operate. The Avis and/or Budget
vehicle rental systems in Europe, Africa, the Middle East and parts of Asia
are operated at approximately 3,700 locations by subsidiaries and sub-licensees
of an independent third party primarily under virtually royalty-free trademark
license agreements.
In general, concession fees for on-airport locations are based on a percentage
of total commissionable revenue (as defined by each airport authority), subject
to minimum annual guaranteed amounts. Concessions are typically awarded by airport
authorities every three to five years based upon competitive bids. Our concession
agreements with the various airport authorities generally impose certain minimum
operating requirements, provide for relocation in the event of future construction
and provide for abatement of the minimum annual guarantee in the event of extended
low passenger volume.
Competition
The car rental industry is characterized by intense price and service competition.
Competition in the U.S. vehicle rental operations business is based primarily
upon price, reliability, vehicle availability, national distribution, usability
of booking systems, ease of rental and return and other elements of customer
service. In addition, competition is influenced strongly by advertising, marketing
and brand reputation. We compete primarily with the following car rental companies:
Hertz Global Holdings, Inc., Vanguard Car Rental USA Group, which operates the
National Car Rental and Alamo brands, Dollar Thrifty Automotive Group and Enterprise
Rent-A-Car Company.
The truck rental industry is characterized by intense price and service competition.
We compete with a large number of truck rental companies throughout the country,
including U-Haul International, Inc., Penske Truck Leasing Corporation, Ryder
System, Inc., Enterprise Rent-A-Car Company and many others.
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