Car rental firm Hertz has filed for bankruptcy protection in the US after the coronavirus pandemic caused demand to collapse.
The firm, whose largest shareholder is billionaire investor Carl Icahn, said the “sudden and dramatic” impact of coronavirus on travel demand had caused a “abrupt decline” in revenue and future bookings.
A large portion of Hertz’s revenue comes from car rentals at airports, which have disappeared as airlines ground planes amid restrictions on international travel.
It announced on Friday that its board had approved the company seeking Chapter 11 protection in Delaware.
Hertz’s international operations in Europe, Australia and New Zealand are not included in the US bankruptcy proceedings.
“The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the Company’s revenue and future bookings,” the firm said.
“Hertz took immediate actions to prioritise the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity.
“However, 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.
“The financial reorganisation will provide Hertz a path toward 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.”