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Shutdown Chaos at Airports Sends Hertz, Avis Shares Higher
Traffic Spikes on Hertz Website, While Avis Is on Track for Best Month Since Ober 2022
As travelers across the U.S. endure hourslong security lines at airports due to the partial government shutdown, investors are piling into car-rental companies on bets the disruption will push more people onto the road.
Hertz Global Holdings shares rose about8.6%on March 26, while Avis Budget Group surged17%for its biggest one-day gain since June, as chaos at U.S. airports drove optimism that more travelers would rent cars instead. Traffic to Hertz’s website jumped about 15% this week as customers looked for ways around air-travel disruptions. The company has been promoting discounts on last-minute reservations and one-way rentals.
“As check-in lines grow at airports, car rental companies should see a bump as travelers look for alternatives to air travel,” said Dec Mullarkey, managing director at SLC Management.
If TSA funding is restored and airport delays ease, those gains “may get unwound,” he said. “But anything that’s booked will likely stay in place.”
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The rally capped an already strong month for Avis. The stock has climbed almost 50% in March, putting it on track for its best month since October 2022. Hertz has gained 4.4% over the same period, even as the war in the Middle East weighed on the S&P 500, sending the index down 5.6%.
