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Published: Wednesday, 7/6/2011 - Updated: 3 years ago

Dollar Thrifty's fate up in air

Rental-car industry wonders if firm will be acquired

NEW YORK TIMES

For a second summer, the rental car industry has an undercurrent of intrigue as two big brands, Hertz Global Holdings and Avis Budget Group, court Dollar Thrifty Automotive Group.

For now, Hertz is the twice-jilted suitor, while Avis Budget lies in wait, hamstrung by an extended regulatory review.

Travelers, though, are more likely to find suspense in a summer page-turner than this long-running courtship. "All they care about is continuity of the overall value proposition, meaning price and quality of service, and dependability of the brand they have an affinity for," said Neil Abrams, a longtime car industry executive and consultant.

Frequent travelers expressed concern that, with fewer players, rental prices would go up.

A spokesman for the Federal Trade Commission said it did not comment on pending cases. It can challenge mergers and acquisitions that probably would lead to higher prices and fewer choices for consumers.

A spokesman for Avis Budget declined to comment.

Richard D. Broome, a spokesman for Hertz, said, "We of course want to purchase the Dollar Thrifty Group at a fair price," adding, "But at the same time, we have many significant ongoing initiatives to grow the business and provide even better customer service."

Rental car companies vary pricing based on brands and their target customers, according to Mr. Abrams. His consulting firm maintains a pricing index that aggregates rates from the major car rental brands at 10 big airports.

He said a traveler who booked a midsize car a week in advance at those airports for use on June 13 would have paid $85.61 at Hertz, $80.39 at Avis, $86.78 at National, $63.10 at Budget, and $57.39 at Dollar.

A traveler who reserved a compact car for a week would have paid $299.37 at Hertz, $286.49 at Avis, $296.81 at National, $226.56 at Budget, and $212.81 at Dollar. The prices exclude taxes, fees and surcharges, which can add 25 percent or more to the base rate in some markets.

Mr. Abrams said any consolidation at the top would not change those variations significantly. Over 30 years, with many ownership changes, the competitive price positioning of the brands has not changed much.

According to a 2010 market ranking based on fleet, locations, and revenue, Enterprise, made up of Alamo, Enterprise, and National, was the dominant car rental company.

Hertz, Avis Budget, and Dollar Thrifty follow. A combination of Hertz and Dollar Thrifty or Avis Budget and Dollar Thrifty would close the gap with Enterprise, said Chris Brown, executive editor of Bobit Business Media, publisher of Auto Rental News.



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