After a slow start to Avis Budget Group's first quarter because of the effects of the Covid-19 omicron variant, as other travel suppliers have reported, demand picked up around Presidents' Day and continued into March and the second quarter, company executives said during a Tuesday earnings call.
"We reported our best-ever first-quarter results in our company's history," Avis Budget CEO Joe Ferraro said. "We generated $810 million of adjusted [earnings before interest, taxes, depreciation and amortization] in the first quarter. That's higher than the full-year adjusted EBITDA of 2019. And we delivered this in what is typically the seasonally lowest quarter of year."
In January, leisure demand softened significantly and corporate demand was "nonexistent," according to Ferraro. But in the latter part of the first quarter, corporate demand improved "to points above 2019 levels during the same period that quarter," he added. "As I said on the last call, I believe strongly that commercial business is good for our company. It gives you a midweek peak on how to utilize the fleet more effectively. … I think going forward you will see a good mix especially in the second quarter of both commercial and leisure."
Corporate clients also are keeping their cars longer, and "prices have become elevated for us for commercial business," said Ferraro, adding that there's also been "tremendous growth for bleisure. … Our split-bill technology allows us to have the consumer use their corporate card for midweek, then put it on their private card for the weekend."
Avis Budget reported $2.4 billion in revenue for the first quarter of 2022, a 77 percent increase from the same period in 2021 and a 27 percent increase from Q1 2019. Net income was $527 million, up from last year's loss of $170 million. The Americas reported $2 billion in revenue, an 85 percent year-over-year increase, and international reported $432 million, up nearly 50 percent from the year prior.
The company also reported an average rental fleet of more than 594,000 vehicles for the quarter, up from just over 412,000 in 2021. Vehicle utilization stayed steady at about 67 percent. Rental days increased to just over 36 million from just under 25 million in Q1 2021.
Further, due to strong consumer feedback and "efficiencies we've seen in our workflow," Avis Budget is dedicating additional resources to expand its Avis QuickPass offering, Ferraro said, which enables preferred customers a contactless experience from arrival to completion of their rental. "Our goal is to have QuickPass deployed at the majority of our key airports by the summer travel season," Ferraro said.
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