Car rental company Hertz will continue operating in Asia Pacific, amidst recent news that certain of its US and Canadian subsidiaries have filed for bankruptcy protection in US Bankruptcy Court. Eoin MacNeill, Hertz's VP, Asia Pacific said that it is business as usual for the company in Asia.
He explained that the decision by Hertz Global Holdings and certain of its US and Canadian subsidiaries to voluntarily file for reorganisation under Chapter 11 in the United States Courts "has no material impact on Hertz operations in Asia which each operate under franchise arrangements". The company will continue operating as normal in Asia, including countries such as Singapore, Guam, Saipan, Thailand, Malaysia, Taiwan, Hong Kong, Brunei, Pakistan, Cambodia, Vietnam, Macao, Japan, Philippines, Korea, India and Mainland China.
"It is business as usual for Hertz in Asia. Hertz locations are open across the Asia Pacific region and ready to help customers with their rental needs – whether for business or leisure purposes. All Hertz reservation, loyalty and customer programs continue to operate, including Hertz Gold Plus Rewards as well as our rewards, coupon and voucher programs," he added.
MacNeill also said that Hertz loyalty programme points and rewards are not affected. "Since the pandemic began, we have undertaken a range of measures to reduce costs and ensure we keep the business as robust as possible in both markets. We have cut all discretionary spending, reduced labour costs and sought new rental agreements with landlords. We have also been de-fleeting our network, and de-registering unused vehicles," he explained.
Separately, Hertz also explained that the financial reorganisation will offer it a path toward a more "robust financial structure" that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery. As of the filing date on 22 May, Hertz said it had more than US$1 billion in cash on hand to support its ongoing operations. Depending upon the length of the COVID-19 induced crisis and its impact on revenue, the company may seek access to additional cash, including through new borrowings, as the reorganisation progresses.
In response to COVID-19, Hertz has taken action to align expenses with significantly lower demand levels by closely managing overhead and operating costs. These include deferring capital expenditures and cutting marketing spend, implementing furloughs and layoffs of 20,000 employees, or approximately 50% of its global workforce, as well as reducing planned fleet levels through vehicle sales and by canceling fleet orders.
Hertz added that it is actively engaged with many of its largest creditors to temporarily reduce the required payments under the company's vehicle operating lease. "Although Hertz negotiated short-term relief with such creditors, it was unable to secure longer-term agreements. Additionally, the company sought assistance from the US government, but access to funding for the rental car industry did not become available," the company said. Hertz witnessed a leadership change recently when Paul Stone took over the role of CEO after Kathryn Marinello resigned.