2nd Jul 2015 11:12
LONDON (Alliance News) - Irish budget carrier Ryanair Holdings PLC on Thursday said car rental company Hertz has sent the company notice that it has terminated the car hire supply deal between the company, effective immediately.
Hertz has claimed that Ryanair's deal with GDS distribution companies represents a breach of contract, which Ryanair has disputed given this deal has been in place since April 2014 with, Ryanair claims, Hertz's knowledge and support.
Ryanair said it believes the termination of the contract by Hertz to be in breach of its long-term exclusive contract with Hertz, which was recently extended to 2020. As a result, the carrier is planning to pursue Hertz for breach of contract and damages.
As a result of the move, Ryanair will not be able to offer its customers car hire services via its website for around three months until it finds a suitable replacement for Hertz. Ryanair has issued a request for proposals to tender for the contract and expects to have a replacement in place by October.
"We regret Hertz's decision to end our car hire agreement at such short notice today, at a time that will cause maximum inconvenience to our customers during the peak travel period. We have had a long and successful partnership with Hertz, and it's a pity that this has ended in such an unfortunate and untimely manner," said Michael O'Leary, Ryanair's chief executive.
"Since we expect that any losses arising from this interruption to our car hire services will be recovered from our legal proceedings against Hertz, we do not expect this interruption to have a material impact on current earnings," O'Leary added.
In an earlier statement on Thursday, Ryanair also said its customer traffic and load factor both increased in June.
Ryanair said it carried 9.5 million customers in June, up 14% from the 8.3 million carried a year earlier. On a rolling 12-month basis, the group's traffic to the end of June was 94.3 million customers, up 14% year-on-year.
Ryanair's load factor also improved in June, up five percentage points to 93% from 88%.
Shares in Ryanair were up 0.2% to EUR12.33 just after midday on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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