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Global car rental company Hertz became the latest economic casualty of the coronavirus pandemic Friday, filing for bankruptcy in the US and Canada after more than a century in business.
"The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the Company's revenue and future bookings," Hertz said in a press release.
Hertz said it took "immediate action" to prioritize the health and safety of employees and customers and eliminate "all non-essential spending".
The longer the economy stagnates, the more we will see these debt loaded corporations filing for bankruptcy. They were borrowing money hand over fist due to low interest rates, in order to buy their owns stocks back in many cases. It worked so well, until it didn't. Boeing is a good example of a company that had big troubles before coronavirus, but used it as an excuse to demand a federal bailout.
That’s unfortunate. Maybe next time I rent a car I’ll get the one I ordered instead of being told the expensive, gas-guzzling monster truck is the only one available despite a lot full of prius cars.
With the airline industry shutdown expect airline connected businesses to feel the pain like car rental companies thanks to this 3 month lockdown.
There is no shut down of commercial airlines.
The carriers substantially reduced domestic capacity due to lack of consumer demand.
I can fly out of ORD to nearly everywhere in the US.
International flights between the US and the rest of the world have also reduced capasity.
75% of employed people continue to be employed. How soon will they return to recreational travel?
Given most businesses have relied on Zoom like meetings during the Stay at Home, it is quite possible many businesses are questioning the cost associated with business travel going forward?
How long will it take for the big trade shows to resume in Las Vegas, Chicago and Orlando?
How much time will it take for the major amusement parks and cruising to return to pre- Corona capasity?
The longer the economy stagnates, the more we will see these debt loaded corporations filing for bankruptcy. They were borrowing money hand over fist due to low interest rates, in order to buy their owns stocks back in many cases. It worked so well, until it didn't. Boeing is a good example of a company that had big troubles before coronavirus, but used it as an excuse to demand a federal bailout.
Penny’s, Sears, Macy’s, Pier One, AMC etc have been on death row for a long, long time. They were closing hundreds of under productive stores before the Corona. There are no anchors to replace them.
Looks like coronavirus was a convenient excuse. They were billions in debt even before the crisis, seems like yet another ineptly run corporation.
Quote:
Originally Posted by andywire
The longer the economy stagnates, the more we will see these debt loaded corporations filing for bankruptcy.
No doubt, but that's a good thing in the long-term.
Quote:
Originally Posted by Checkmarkblue
With the airline industry shutdown expect airline connected businesses to feel the pain like car rental companies thanks to this 3 month lockdown.
It isn't just that.
I saw a segment on all these people who mortgaged their homes to buy a second home for the express purpose of listing it on Air-BNB to derive rental income.
For many, reservations were cancelled through August and for quite a few others reservations were cancelled through the end of the year.
So, they aren't going to be deriving the rental income they thought they would, which raises some interesting legal questions under the Act of God Doctrine.
I think those who identified the property on their mortgage documents as a business property for rental income will be safe, but those that didn't might be screwed.
Can't say that I'm surprised. I never chose Hertz when booking a rental car. They were always among the least competitive, price-wise.
Clearly, people did book with them, though.
We'll see how they turn out after restructuring.
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