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Avis to strip $35 million of cost out of Euro arm
Among the cost-saving plans being implemented are a streamlining of the Avis Europe senior management team, moving to a shared service centre, and consolidating its buying power to achieve lower priced fuel, glass repair, tyres and vehicle maintenance. It is also putting in place a Euro 350 million pan-European financing structure to consolidate its fleet buying power.
The rental giant, which bought Avis Europe on October 3, 2011, saw its European arm contribute $327 million in revenue in the first quarter of 2012, making a loss of $7 million before taxes and costs. Avis Budget globally saw revenue grow 31% to $1.6 billion in the quarter, making a $23 million loss due mainly to acquisition costs.
As a result of the integration of Avis Europe, the group expects revenue to rise by up to 29% to $7.6 billion this year.
Ronald L Nelson, chairman and CEO of Avis Budget Group, said: ‘Travel demand across the majority of our markets remains healthy. Our integration of Avis Europe is progressing as expected and we remain confident in our ability to achieve $35 million in annual synergy benefits by the first anniversary of the acquisition.’
15 May 2012 09:48