Thrifty’s chief officer discusses car rental challenges

Jay Foley was recently appointed as Dollar Thrifty’s new chief operational officer (COO). Soon after his appointment, Foley offered a very candid interview to Business Week on the difficulties and challenges that the car hire industry faces as it enters into uncertain economic times. Thrifty has endured many of these difficulties over the course of the past several months, and Foley was asked to speak about the company’s poor financial showing in the last quarter of 2007, a drop in demand, over-fleeting and how the firm plans to improve its position in the corporate rental market.

When asked about 2008 prospects, Foley predicted that the number of businesspeople travelling and renting cars is likely to remain steady, so no decline in traffic is expected on that front. It is, however, very likely that just like leisurely clients, businesspeople will also increasingly look for deals and lower rates when they book their cars. As such, the budget sector offers opportunities for growth. Foley observed that many people have the impression that Thrifty bases its business almost exclusively on leisurely travelers and has few business and corporate clients. Yet this is essentially a misconception, since Thrifty signs numerous corporate contracts each year and has a department that deals exclusively with business and corporate sales. The firm does, however, want to expand its corporate clientele in the near future.

Foley also addressed the issue of poor fourth quarter earnings, noting that it may have been the worst performance in Thrifty’s history. The main causes include the economic downturn, an oversupply of rental cars and a drop in the price that could be charged for the sale of used cars. Despite these figures, Foley remains confident that Thrifty’s fortunes will rise in the coming months, after fleet optimization kicks in.

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