Higher Rates Boost Avis Budget's Financials

Avis Budget Group saw in 2006 an increase in revenues driven by higher rates, although overall earnings were severely impacted by the company's separation from the other components of what once was Cendant Corp.

The company's revenue was up 5 percent to $5.7 billion, but Avis Budget reported a full-year loss of $677 million because of costs incurred from Cendant's breakup. Last year, Cendant spun off its Realogy real estate segment and Wyndham Worldwide hotel segment and also sold Travelport. With only Avis Budget remaining as its primary operations, the company changed its name to Avis Budget Group.

Without restructuring costs, earnings for the year would have been $405 million, according to Avis Budget.

Car rental revenues were up 8 percent compared with 2005, boosted by a 5 percent increase in time and mileage revenue per day, according to the company. In addition, Avis Budget opened 197 new off-airport locations during the year and increased off-airport revenues by 18 percent. Fleet costs, however, continued to rise, increasing 13 percent year-over-year despite an increase in fleet size of only 3 percent.

In the fourth quarter, revenue was flat at $1.3 billion compared with the same period in 2005. Pretax income for the quarter was an $8 million loss, including $48 million in separation and restructuring costs