Avis 2007 Annual Report Download - page 17

Table of Contents
program for our 418 technicians who operate in approximately 100 maintenance and damage repair centers for both Avis and Budget. We use
advanced diagnostic equipment, including General Motors’ “Techline” and “Tech 2” diagnostic computers and Ford’s PDS diagnostic system.
Our technician training department also prepares its own technical service bulletins that can be retrieved electronically at all of our repair
locations. Approximately 89% of our technicians are ASE-certified.
Customer service
Our commitment to delivering a consistently high level of customer service is a critical element of our success and strategy. Each year, our
internal quality auditors conduct approximately 1,000 unannounced reviews of locations to measure service levels by location. We identify
specific areas of achievement and opportunity from these assessments. We address areas of improvement on a system-wide level and develop
standard methods and measures. The major focus areas of these assessments include (i) vehicle condition and availability; (ii) customer
interaction, including helpfulness and courtesy; and (iii) location image. In addition, we utilize a toll-free “800” number and a dedicated
customer service e-mail address to allow customers of both Avis and Budget to report problems directly to our customer relations department.
Location associates and managers also receive training and are empowered to resolve virtually all customer issues at the location level. We
prepare weekly and monthly reports on the types and number of complaints received for use in conjunction with the customer satisfaction
reports by location management as feedback of customer service delivery. Finally, we conduct daily location-specific customer satisfaction
tracking by sending web-based surveys to recent customers of our top volume locations.
Airport concession fees
In general, concession fees for on-airport locations are based on a percentage of total commissionable revenue (as defined by each airport
authority), subject to minimum annual guaranteed amounts. Concessions are typically awarded by airport authorities every three to five years
based upon competitive bids. Our concession agreements with the various airport authorities generally impose certain minimum operating
requirements, provide for relocation in the event of future construction and provide for abatement of the minimum annual guarantee in the
event of extended low passenger volume.
Competition
The car rental industry is characterized by intense price and service competition. Competition in the U.S. vehicle rental operations business is
based primarily upon price, reliability, vehicle availability, national distribution, usability of booking systems, ease of rental and return and
other elements of customer service. In addition, competition is influenced strongly by advertising, marketing and brand reputation. We compete
primarily with the following car rental companies: Hertz Global Holdings, Inc., Dollar Thrifty Automotive Group, and Enterprise Rent-A-Car
Company, which also operates the National Car Rental and Alamo brands.
2007 Acquisitions
On October 23, 2007 we acquired a minority interest in Carey Holdings, Inc., the parent company of Carey International, Inc., a worldwide
provider of chauffeured ground transportation services. In connection with this transaction, we invested approximately $60 million in cash and
acquired approximately 48% percent of Carey’s common stock. We also acquired a one-year option to increase our ownership stake to 80% of
Carey’s common stock, subject to certain conditions, which would likely include the assumption or repayment of Carey’s existing
indebtedness. If we exercise of our option, we expect to expand revenue by offering our customers a full range of ground transportation
products.
In 2007, we also purchased the car and truck rental operating rights and/or assets from approximately 13 of our former Avis and Budget
domestic franchisees for approximately $10 million in cash. Such acquisitions were not significant individually or in the aggregate to our
business.
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