Car rental business Hertz has filed for bankruptcy, CNN has learned.
The company, which has been renting cars since 1918, filed on Friday night (May 22), becoming the latest victim of the economic crisis spurred by the ongoing COVID-19 (coronavirus) pandemic. Having weathered the Great Depression and the production halt amid World War II, Hertz stated its latest move to declare bankruptcy is intended to prime the business for a stronger and financially healthier comeback.
"The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings," reads a statement from the company. Additionally, because of the impact of the crisis, "uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today's action."
With the company’s massive share in their industry, the filing makes Hertz one of the highest-profile bankruptcies to emerge in the wake of the coronavirus outbreak alongside national retailers like J.Crew, JCPenney, and Neiman Marcus.
Hertz isn’t the only rental car industry to suffer amid today’s economic downturn, as travel industries across the country rely on two-thirds of its income from rentals at airport locations, according to CNN.
Since the beginning of April, the news outlet reports 94 percent less people have frequented TSA checkpoints at airports across the United States compared to last years’ numbers — no doubt due to the rising impact of coronavirus and state-wide lockdown guidelines impacting businesses both small and large.
In closing, Hertz maintained bankruptcy process will give the company "a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery."
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