Stelios lowers prices in yet another industry for consumers. This time it's Avis that suffers!

Avis, Europe's largest car rental company, has just announced a continued decline in profitability and that earnings will remain under pressure for 2005. This pressure, according to many independent analysts and the CEO of Avis himself, is coming from online brokers like easyCar (or Holiday Autos, part of lastminute.com). easyCar offers low cost, best value car hire throughout the UK and Europe in more than 500 locations.

Avis’ Chief Executive Murray Hennessy admitted that his company was losing out to easyCar. “We are seeing structural change in the market place,' said Hennessy. “Volume continues to grow, albeit slowly, but there is pressure on pricing and profit margins' from car-rental brokers and higher online car bookings. (Source: Bloomberg.com).

"What we are seeing in the car hire industry is what happened in the aviation sector a few years ago," said Stelios the serial entrepreneur and easyGroup chairman who founded easyJet in 1995. "easyCar has a leaner and more efficient business model than Avis so prices are coming down and the consumer is the big winner," he continued.

95% of easyCar customers book direct online in order to take advantage of the low prices on offer (Holiday Autos has a more expensive business model that uses travel agents). easyCar now has a number of brokerage agreements throughout Europe whereby easyCar sells car hire to customers and the vehicle itself is supplied by reputable, mid-sized locally based car hire companies on the continent. Local management of car fleets allows for increased efficiencies at site level resulting in lower prices for consumers.

During 2004 easyCar has grown from offering low cost car hire in some 50 locations to more than 500, by adapting it’s own business model. This business model will continue to expand through more and more countries in the world which will continue to erode the Avis business by offering lower prices for car hire to more people in more countries.