Has the Avis Budget Group's activity in recent months lived up to your expectations?
Pierre-Olivier Bard - As soon as the covid restrictions came to an end at the start of the year, we were lucky enough to see the return of North American customers from May onwards, which we hadn't seen for two years, mainly tourists driven by a desire to return to Europe and a favourable dollar-euro exchange rate. The summer was in the same vein with a large number of European tourists in June and July and, in August, a domestic market that performed less well than in previous years, no doubt because the French also wanted to be able to travel again, to Greece for example. As far as business travel is concerned, we are also starting to see a return of long-haul customers after the return of the Europeans.
But are teleworking and videoconferencing still having an impact on the resumption of business travel?
Pierre-Olivier Bard - If you look at our business, it is down overall by around -23% to -24% compared with 2019, mainly due to the fall in business travel. We can see that travel is back on trackbut at much lower levels than before. Will we ever find those 20% lost?I'm not sure. While the duration of journeys is a little longer than before, the frequency is less. Particularly in the Paris region, unlike in the provinces, where travel continues. New working methods mean that, with videoconferencing, fewer meetings need to be held that used to involve travelling to head office.
Has the size of your fleet kept pace with the growth of your business?
Pierre-Olivier Bard - We have achieved the targets that Avis had set itself for 2022, with the number of vehicles planned to be able to serve our customers this summer. This means a fleet 25% smaller than in 2019, but in line with demand. For all that, it hasn't all been easy. On the one hand, we've had to extend the holding periods, while on the other we've had to change our purchasing method and buy individual vehicles to make up the shortfall. In the end, we are fortunate to be a solid group with the necessary financing resources.
We've heard a lot this summer about the high cost of car hire. Is this a major trend for the months ahead?
Pierre-Olivier Bard - The law of supply and demand played out in the summer tourist market. So yes, there has been inflation, but nothing out of the ordinary. Will it continue? When you look at current inflation trends and what we can expect next year, there's no doubt that inflation will continue. too many uncertainties today to tell you what the price trend will be in the future.
Coming back to your fleet, is vehicle availability still as problematic as ever?
Pierre-Olivier Bard - It's still a challenge for us. Semiconductors are still a problem, although this should stabilise in the last quarter of the year with a return to normal production volumes. So this should soon no longer be a problem. But we are starting to see other energy-related concerns. Windscreen production requires a great deal, mainly gas. The same goes for glass and sheet metal production. To this could be added the efforts that the government could ask certain companies to make. In the end, suppliers will either be producing at very high cost, or will be forced to adapt production. We can therefore expect to see further problems with market availability in 2023.
How far have you got with the ongoing greening of your fleet?
Pierre-Olivier Bard - We're moving forward. We continue to have more and more "green" vehicles. Hybrid models now account for a large proportion of our fleet, with a further 400 100% electric vehicles due by the end of the year. The major constraint today remains the recharging infrastructure. This is because vehicle manufacturers have significantly improved the range of their vehicles, even if people still need to be convinced on this point. This limited recharging offer is a real brake on the development of electric vehicles. Whether it's our own infrastructures, which are very heavy investments, or those of car park managers at airports and stations. All this is moving more slowly than the LOM law requires.
So how is demand for electric vehicle hire changing?
Pierre-Olivier Bard - There has been little demand so far. It's still quite low, but on the other hand, customers are showing more interest in testing this solution. It's easier to offer it to them now. We don't have a clear-cut demand, but It will happen gradually. Business travellers, for example, make enquiries, particularly those whose offices are equipped with a recharging solution. On the other hand, when it comes to holiday periods, leisure customers are more reticent, because of the range of the vehicles and the availability of recharging stations. Another aspect that may also influence future demand is the energy prices. Today, we're talking about bills of 1 euro per KW for an ultra-fast charge such as those available on motorways. In other words, unless you recharge your car at home or at the office, filling up an electric car could cost as much as petrol.
Some countries, such as Germany and Spain, are encouraging people to take the train, with discounted offers. Are you seeing passengers choosing between the train and the car?
Pierre-Olivier Bard - We already have the advantage of being a partner of the SNCF. So, if business travellers are encouraged to take the train and not the plane for short journeys, that doesn't have to be a problem. no more impact than that on our businessWe are present in both stations and airports. However, to come back to our activity in the Paris region, this can have a negative impact on our business. an influence on business travel in Paris. While travellers used to be able to take a car from the airport to get into the capital, they no longer need to do so when they arrive in the city centre by train. All the more so as they can then travel to the city centre by public transport. The electric offer could be just the thing to help them get around the city.
