History of Avis Rent A Car
Avis Rent A Car History - 1946 - 1970s
Avis Rent A Car was founded in 1946 by Warren E. Avis as Avis Airlines Rent-A-Car System, with savings, dealership profits from his Detroit car dealership, and a $75,000 loan.
Being founded by a former Army Air Corps flyer and with the backdrop of anticipation in the growth of aviation travel, he initially opened the company in two locations, at Willow Run Airport near Detroit and at Miami Airport in Florida.
The company was the first to operate airport based car rentals in the U.S.
Soon after, airports in New York, Chicago, Dallas, Washington, Los Angeles, and Houston had Avis car rental locations.
By 1948, the company, in a push to expand operations beyond airports, dropped "airlines" from the official name.
During the period to 1954, Avis started a rapid international expansion, initially to Canada and Mexico, as well as with affiliation deals with rental agencies in Europe.
Mr. Avis sold the company in 1954 to Richard S. Robie, who had a car rental company in New England.
With the new ownership expansion continued, both in terms of locations and new services.
Robie introduced a one-way car-rental system and a company charge card.
The expansion program came with cash flow problems, and Robie was forced to sell the company in 1956 to the Amoskeag Company and other investors.
The new owners created a new wholly owned subsidiary, Avis Rent A Car System, Inc.
New ownership also expanded licensee system to include markets in Austria, Belgium, Norway, and Spain.
By 1962, Avis had a rental car fleet of 7,500 vehicles generating annual revenue of $25 million.
That year, the company was purchased by Lazard Freres and Company, an investment banking firm.
The new owners moved the corporate headquarters of Avis to Garden City, New York.
Another novelty was the introduction of the slogan "We're only No. 2. We try harder".
Ownership changed againg in 1965, this time by International Telephone and Telegraph Corporation (IT&T).
IT&T also encouraged the company's international expansion throughout Europe and Africa, making in the progress the leading car-rental company in Europe within eight years.
IT&T sold shares of Avis to the public in an 1972 public offering of 48% of the company.
Ownership changed again in 1977, as Norton Simon, Incorporated bought the company for $174 million, taking it private.
Overall, 1970s was a decade of growth for Avis both domestically and internationally.
The growth was fueled by several factors, which included greater airline use, airline deregulation, and Avis's European, African, and Middle Eastern operations strength.
Avis Rent A Car History - 1980s - 1990s
Early to mid 1980s were financially difficult for all the rental car companies, partly due to increased price competition among all the major rental car operators.
Avis made several technological improvements to its systems during the 80s.
As an example of this, in 1984, Avis introduced Rapid Return, an automated self-service check-in device, to its U.S. franchises.
Another one, called Rapid Rental, which was a credit-card prompted, computer-assisted transaction, followed in the United Kingdom and France.
1980s was also testing times for Avis in terms of ownership.
First, in 1983, the company was purchased by Esmark, Inc. Then, the following year, Esmark (and alongside Avis) was acquired by Beatrice Companies.
Then, Kohlberg, Kravis, Roberts & Company (KKR) acquired Beatrice Companies and Avis in 1985 in a leveraged buyout.
In another leveraged buyout in 1986, KKR sold Avis to Wesray Corporation, a New Jersey-based investment company.
Wesray then sold Avis's domestic leasing fleet to PHH Group of Hunt Valley, Maryland, for approximately $134 million.
During 1986, Avis also sold 65 percent of its European operations (Avis Europe PLC) in a public offering for approximately $290 million.
Ownership changes did not stop there.
Avis was sold once again in 1987, this time to an employee stock ownership plan (ESOP) for $750 million.
Under this deal, the employees of the company became its owners, with Wesray retaining a 29 percent stake.
This move boosted not only employee morale, but also bottom line, and profits improved significantly the following years.
In 1988, Avis purchased the company's licensee in New Zealand, broadening the company's influence in the Pacific.
In another developments, Avis Europe became private in 1989, when it was purchased by Cilva Holdings PLC, which had Avis, Inc., as a 8.8 percent owner of the shares.
Also in 1989, General Motors bought out Wesray's 29 percent stake in Avis, Inc.
Avis became known more and more for innovation during the 1990s.
Avis was also an early mover in green rental cars, as in 1992, Avis introduced to its Sacramento, California, market 20 Chevrolet Luminas that would operate on either M85 (combination fuel of 85 percent methanol and 15 percent unleaded gasoline) or on unleaded gasoline, or a mixture of both.
After nine years of employee ownership Avis changed ownership again.
This time, the new owner was HFS Inc, the largest hotel franchiser in the United States, which purchased the company for $800 million in October 1996 for full control.
A new company called Avis Rent A Car, Inc. (ARAC) was created, which only had the company-owned car rental operations.
HFS also set up a subsidiary, HFS Car Rental, which had the rights to the Avis name and which became the franchiser of the worldwide Avis rental system.
In August 1997 ARAC purchased First Gray Line Corporation, the second-largest Avis franchisee in North America, for $195 million in cash.
The same year, Avis Rent A Car went public in an about 75 percent of the company sold to the public and the remaining 25 percent remaining with HFS.
In 1998 Avis purchases Hayes Leasing Company, Inc, a major franchisee in Texas, and also makes six other smaller acquisitions.
Avis Rent A Car History - 2000 - present
In 2001 Cendant corporation purchases all of the outstanding shares of Avis Group Holdings valued at $937 million.
The new company, Avis Rent A Car System, Inc. becomes in the process a wholly owned subsidiary of Cendant.
Following the ownership change, the company’s world headquarters moves from Garden City, NY to Parsippany, NJ.
In 2006, Cendant restructures its operations, and the company is separated into four independent companies, Realogy, Wyndham Worldwide, Travelport and Avis Budget Group, Inc., which is now the parent company of Avis Rent A Car System, LLC.
Today, the company has a range of services at more than 2,000 locations in the United States, Canada, Australia, New Zealand, Latin America and the Caribbean region.
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