SOUTHFIELD, Mich. – Avis Budget Group Inc. is raising prices twice in June as the car-rental industry prepares to shrink to three companies from four, aiding its ability to charge more.
Avis boosted prices by $30 a week and $5 a day for car rentals starting June 24, which was followed by a $10-a-week jump at about 30 airports, John Barrows, an Avis spokesman, said in an e-mail. The first increase was put in place May 29.
The new prices come as Hertz Global Holdings Inc. awaits final U.S. antitrust approval for its November acquisition of Dollar Thrifty Automotive Group Inc., which would solidify its position as the second-largest car-rental company after Enterprise Holdings Inc. Avis would be third and the trio would control 98 percent of airport car rentals. In the first quarter, Avis raised prices six times and attributed it in part to Hertz's deal for Dollar Thrifty.
Since the transaction, "the basis of competition in our industry has become better balanced between service and price than it has been in recent years," Chief Executive Ron Nelson said on May 2.
This quarter, the Parsippany, N.J.-based company has "continued to aggressively implement pricing increases in North America," David Wyshner, Avis's chief financial officer, said Tuesday at an investment conference.
Also contributing to the need to raise prices is a decline in used-car values. The Manheim Index of used-car values fell 5.5 percent in April, worsening a month-by-month decline for used cars this year.
The Federal Trade Commission has withheld final approval of Hertz's purchase of Dollar Thrifty, which typically would have been granted in December following a 30-day comment period.
The agency continues to investigate the sale of Hertz's Advantage brand along with additional locations designed to re-create a fourth competitor that could maintain price discipline, two people familiar with the matter said April 4.
"This is a real pocketbook issue for everyday people," then-FTC Chairman Jon Leibowitz said in November. "Today's bipartisan action by the FTC will ensure that consumers are not forced to pay higher prices for rental cars when they travel."
