Dec. 27—CHEYENNE — After filing for bankruptcy in May, the Hertz rental car company will close its location at the Cheyenne Regional Airport, as well as locations in Laramie and Riverton.
With Hertz closing in Cheyenne on Jan. 7, that leaves Avis as the only car rental available at the airport. Still, Airport Director Tim Barth remained cautiously optimistic about Avis' ability to endure the COVID-19 crisis while keeping CRA's car rental shop open.
Unfortunately for Cheyenne, Barth said small airports will be the ones hit the hardest by COVID-19-related bankruptcies and closures.
"The thing that is so disappointing for us is even though we're still in COVID, we started the passenger service up again, and our numbers are actually increasing. From a flying perspective, we're pretty happy with it," Barth said. "But now we've got no rental cars. So just when we're finally seeing a positive, another negative comes in."
At first, Hertz attempted to restructure its operations to save the company, but those efforts haven't been enough. The Florida-based company laid off or furloughed 25% of its workforce in March and liquidated almost 200,000 rental cars in August in a deal with lenders.
The company originally offered to extend its lease at CRA for five months, during which time the airport wouldn't receive rent payments, just commissions. Barth said the company needed to decide to stick with bankruptcy reorganization or go a different route by Dec. 21, and on Monday, CRA was notified they'd stop service completely instead of trying to hold out.
With the loss in rent payments and commission, the closure will have a financial impact on CRA's bottom line. Barth said they'll have more specific financial data by next week, though he expects the hit to be "significant."
"Now, we are just an unsecured creditor at the bottom of the pile," Barth said.
The effects of the closure may reach even further than the airport. For Cheyenne's Hertz location, the majority of customers were local, getting rentals for vacations or if a car broke down.
"The majority of the car rental business doesn't come from airport passengers; it comes from the community. So all those people that need to rent a car in the community are really going to have limited options," Barth said.
Still, a number of analysts project that Avis will be able to weather the COVID-19 storm, having taken even more significant steps that Hertz did not early on. Avis' revenue still plummeted 67% from last year during the pandemic, but executives cut 60% of the workforce and 26% of the rental car fleet by June.
Avis has also been able to issue high-yield bonds since May, which Hertz was unable to accomplish. But with services like car rentals maintaining their focus on bigger markets, only time will tell what's going to happen at Cheyenne Regional Airport.
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