Avis Budget Group's strategy to reduce fleet and focus on longer-term rentals helped boost third-quarter utilization, but weaker demand left third-quarter earnings before interest, taxes, depreciation and amortization about $50 million below the company's expectations, executives stated on a Wednesday morning earnings call.
"Our transaction mix also affected revenue," Avis Budget CEO Brian Choi said of the strategy, first announced a quarter ago. "With fleet constrained, we continued prioritizing longer-duration rentals while also serving our contractually committed commercial customers. Those dynamics weighed on reported [revenue per day] and limited our ability to fully offset lower rental days through pricing. So, we fell short of our revenue expectations on both volume and mix."
Longer rentals reduced third-quarter Americas revenue per day by about 1 percent year over year, ABG CFO Daniel Cunha said, adding that a heavier commercial mix reduced it by another 0.4 percent.
In the international segment, the shift toward leisure increased commissions and customer acquisition costs, Cunha said. Still, "we remain committed to the shift toward higher-return leisure customers, but a better revenue mix has to come with better control over the cost of acquiring and serving that business."
Avis Budget "made significant changes to how we build our reservation book," Choi said. "We've constrained certain channels." He added that he believes the company made the right decision to reduce fleet, and "September already saw meaningful benefits from the work that we've been doing."
When asked by an analyst whether higher airfare pricing was good or bad for Avis Budget's business, Choi said that "high prices in airfares are typically coming from business customers. And in our business, commercial actually carries a discount to leisure rates. So, that's one thing to consider."
Avis Budget Q3 Metrics
Avis Budget reported third-quarter revenue of more than $3.4 billion, down 2 percent year over year. Americas revenue declined 3 percent to less than $2.6 billion. International revenue was $884 million, down from the $898 million reported a year prior.
Third-quarter net income was $183 million, down from $359 million reported in Q3 2025.
Americas third-quarter rental days were down 3 percent to 34.8 million. Revenue per day for the segment increased to $73.30 from $73.19 a year prior. The average rental fleet shrunk 6 percent to about 510,800. Vehicle utilization was 74.1 percent compared with 71.3 percent in Q3 2025.
International third-quarter rental days were down 2 percent to 13.3 million. Revenue per day was up to $66.49 compared with $66.03 a year prior. The average rental fleet for the segment declined 2 percent to 195,900. Vehicle utilization was down 0.2 percentage points to 73.7 percent.
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