Avis Budget Group has continued to see the return of “normal demand seasonality” and strong corporate demand, CEO Joe Ferraro said on a Tuesday quarterly earnings call.
The fourth quarter for the Americas had the “highest amount of commercial volume we have seen during the fourth quarter in company history and well above levels we achieved in 2019,” Ferraro said. “Our commercial re-signings for the year are approximately at 100 percent and on average coming in at an increased price.”
Following up on a strong September, ABG saw an “abundance of commercial travel that continued into October,” followed by “pretty good” corporate travel in November and December, Ferraro said. Travel remained strong in January, “especially commercial,” and the company is seeing growth from aerospace, defense contracting, health care and tech companies.
Ferrero added that he is seeing more corporate travelers extend their rentals for blended trips. “I think bleisure is much more prominent than it was in the past,” he said. “Someone who goes on a business trip and then decides to stay over a couple more days, I think that has increased, and that is structurally different than what we saw pre-pandemic. And I think that has a heightened effect on demand.”
Q4 and Full-Year Metrics
ABG reported $2.77 billion in 2022 fourth-quarter revenue and net income of $424 million, year-over-year increases of 8 percent and 11 percent, respectively. Full-year net income was up 115 percent to $2.76 billion on revenue of $11.99 billion, which increased 29 percent from a year prior and was the “best full-year revenue in the company’s history,” according to ABG.
The average rental fleet for the quarter was more than 647,600, up 9 percent from a year prior, with 67 percent utilization, down 1.2 percentage points from Q4 2021. Quarterly revenue per day was up 4 percent to $71.43. Full-year RPD was $74.67, representing a 23 percent increase. Rental days for the quarter were up 7 percent to more than 39.9 million, with full-year rental days up 23 percent to more than 165 million.
The company’s Americas segment reported $2.2 billion in fourth-quarter revenue, up 5 percent year over year, and $9.47 billion for the full year, up 25 percent. Quarterly rental days were up 4 percent to 29.2 million with RPD of $75.64 and 68 percent utilization. Full-year rental days increased 22 percent to nearly 122 million, with RPD at $77.85 and 69.6 percent utilization.
International quarterly revenue increased 21 percent to $567 million. For 2022 it was up 44 percent to $2.52 billion. The segment’s rental days increased 15 percent during the quarter to nearly 10.7 million with RPD of $59.89 and 64.4 percent utilization. Full-year international rental days were up 23 percent to 43.1 million, with RPD at $65.65 and 67.6 percent utilization.
ABG in January announced a partnership with EverCharge, an SK Group company and provider of large-scale electric vehicle charging devices and management systems, and has launched “a significant number” of EV charging stations at the George Bush International Airport in Houston. The company plans to use the partnership in Houston as a model for scalable fleet electrification planning at additional airports across the United States this year.
