Hertz files for bankruptcy protection after pandemic halts travel

Business

There’s been a lot of talk about the hard-hit airline industry during the coronavirus pandemic, but the decision by the United States’ no. 2 car rental firm Hertz to file for bankruptcy protection Friday is just another example of how much the travel industry as a whole is reeling.

Hertz, which was founded in 1918, has struggled since the pandemic severely reduced global travel, and its lenders were unwilling to grant another extension on its auto lease debt payments past Friday’s deadline. The Associated Press notes the filing wasn’t much of a surprise as the company warned in its first-quarter report that it may not be able to repay or refinance debt or have enough cash to keep operating (though it will continue to do so, along with its subsidiaries, during the process.)

By the end of March, the company accrued more than $24 billion in debt and was unable to generate revenue after travel largely shut down. Around that time, Hertz laid off 12,000 workers, furloughed 4,000, cut vehicle acquisitions by 90 percent, and stopped all nonessential spending, but the moves proved too late. Read more at The Associated Press and Reuters.

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Source:: The Week – Business

      

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