As European holidaymakers return from their travels with horror stories of exorbitant rental car costs, one firm has found the competition to be somewhat of a benefit.

The effects of the global recession have been well documented amongst car firms which are heavily influenced by international air travel – Overall rental car volume declined by almost 10% in the first 6 months of 2009.

For Avis, passenger numbers fell by 6.8% till June, although July strengthened with a more modest drop of only 2.9%. The decline has hit Avis’s key market segment, business travelers, most severely.

However, it is not all doom and gloom as the industry can take heart from higher prices which in turn have led to healthier profit margins. Most hire companies have been forced to raise their rates or offload vehicles due to the fact that they are unable to obtain credit to purchase new cars.

Avis has capitalised on the environment by reducing its fleet by a huge 16%. Whilst smaller operations followed this course of action and ultimately closed down, Avis announced that the utilisation of its vehicles actually rose by 5%.

In addition to its conservative fleet management, Avis also reduced its €1.3 billion (£1.1 billion) debt by closing poorly performing offices and shedding numerous jobs. The fleet management initiatives saw Avis cut its purchase of new vehicles by 30%.

Avis has also recently announced plans to expand into China and grow its UK operation following the recent summer peak season, although the outlook for winter remains suitably chilly.