Avis Budget Group saw “strong earnings driven by robust demand” from both the corporate and leisure segments in the Americas and “seasonally increased demand” from its international segment during the second quarter, ABG CEO Joe Ferraro said on a Tuesday earnings call.
“We have a lot of commercial business that has been coming in,” Ferraro said. “People, commercial companies are getting back to travel. We’ve seen outsized demand in aerospace and defense, professional and financial service companies, tech. So, we see domestic travel [as] pretty good.”
Ferraro also reiterated a comment from the company’s first-quarter call—that the industry appears to have returned to “normal seasonal trends.” Demand strengthened during the second quarter in each consecutive month, he added.
Following traditional patterns, corporate business was solid in April and May, Ferraro said. While leisure dominates the summer season, “October is largely about commercial business,” and the first quarter also typically features corporate travel, he explained. “As you go out, you’ll see this more normalization of the seasonality trends we’ve been talking about.”
Avis Budget Q2 Metrics
ABG reported $3.1 billion in second-quarter revenue, down 4 percent year over year. Net income was $436 million, a 44 percent decline from a year prior.
The Americas reported more than $2.4 billion in second-quarter revenue, down 5 percent year over year. International revenue was up 3 percent to $695 million.
The company had more than 42.5 million rental days in the second quarter, up 4 percent year over year. Revenue per day was down 7 percent to $76.18. ABG reported an average rental fleet of nearly 689,500 for the second quarter, up 3 percent from a year prior. Vehicle utilization remained steady at 70 percent.
Ferraro explained some of the declines as comparisons to levels that were elevated in Q2 2022 because of pent-up demand following the Covid-19 omicron variant, and it was “at a time where fleets were at their lowest,” he said. “The second quarter of last year represented the highest RPD we saw in all of 2022, and there was no doubt that RPDs in the second quarter of 2023 would come down.”
