The car rental company Hertz filed for bankruptcy on Friday, becoming the latest victim of the sudden economic downturn caused by the Covid-1
The company had missed a payment on April 27 due to a group of lenders renting vehicles in Hertz’s daily US rental fleet. The lenders extended a payment period for the payment only until May 22.
By declaring bankruptcy, Hertz says it intends to stay in business while restructuring its debts and creating a financially healthier company.
Little background: The company rents cars under the Hertz, Dollar, Thrifty and Firefly brands, a discount brand outside the United States.
Hertz has been devastated by the depth of travel since the pandemic hit earlier this year. Nearly two-thirds of their revenues come from airport rents and air travel has fallen sharply.
The company has already made deep cuts to prevent losses. Hertz cut 12,000 of its 38,000 employees in North America, while another 4,000 are in furloughs.
Hertz has rented cars since 1918, when it first rented a dozen Ford Model Ts, and has survived the Great Depression, the virtual halt to US car production during World War II, and many oil price shocks.