Car rental company Hertz is filing for bankruptcy, citing the sudden and dramatic impact of COVID-19 on travel demand.
The company recently announced that it and some of its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court after the pandemic caused an abrupt decline in its revenue and future bookings.
“Hertz has over a century of industry leadership,” said Hertz President and CEO Paul Stone, who says the company entered 2020 with strong momentum.
“With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery.”
The company intends to stay in business, taking this opportunity to restructure its finances. At this time, all of Hertz’s global businesses (including its Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries) are open and serving customers.
Hertz says its customers can continue to rely on the same level of service, with initiatives currently in place to respond to the pandemic such as new sanitization protocols.
“Today’s action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future,” said Stone.
Hertz was founded in the U.S. in 1918 and currently operates in approximately 150 countries.
As of the filing date, the company reportedly had more than $1 billion in cash on hand to support its ongoing operations, and says it may seek access to additional funds depending on the length of the COVID-19 crisis.