Avis Follows Hertz In Cutting Commissions

Avis Rent A Car late Friday followed Hertz's lead in eliminating base commissions for travel agents on U.S. and Canadian corporate and government accounts with individual contract agreements. The decision formally went into effect on Saturday. Avis said it lacks a clear savings projection, but said the number clearly will reach into the millions.

As with Hertz, the cut does not affect travel agency override and bonus commissions, nor does it change commissions given for leisure and non-negotiated business rentals. Likewise, Avis' relatively new Club Red program, in which travel agent members earn $5 for each qualifying rental in the United States and Canada that consists of any weekly or weekend rental with a Saturday--including corporate and government booking--will not be affected, Avis said.

"This policy change not only allows us to significantly reduce expenses, but also keeps our cost base level with our primary competition," said Bob Salerno, Avis president and COO. "While we recognize the impact of this move, we believe that its targeted structure means it will have a minimal effect on the majority of our travel agency partners."

Though ANC could not be reached this morning for comment on whether its National Car Rental brand will follow suit, analysts expect bankrupt National parent ANC to match the new policy. Mike Going, ANC senior vice president of worldwide sales, last week said the company is "redefining our financial and operating models to effectively compete in a changed and highly competitive landscape." Calls to Budget Rent a Car also were not immediately returned.