Ryanair has confirmed that they have received a notice from Hertz purporting to terminate Hertz’s exclusive car hire supply agreement with the airline with effect from 12:00 on July 2, 2015.
Hertz allege that Ryanair’s agreement with GDS distribution companies represents a breach of contract, a claim which Ryanair disputes given that the carrier stated that it has been distributing through GDSs since April 2014 with Hertz’s knowledge and support.
Hertz have confirmed in their notice that all existing bookings will be honoured and customers will still be able to modify their bookings on the microsite following its decommissioning at 12:00 on July 2. Ryanair stated its belief that this termination is in breach of its long-term exclusive contract with Hertz, which was recently extended for a five year period to 2020.
Ryanair confirmed that it will now pursue Hertz for breach of contract and damages. In the interim however Ryanair will be unable to offer its customers car hire services through the Ryanair website for a period of approximately three months while Ryanair seeks a suitable replacement supplier.
Separately Ryanair has issued a request for proposals for the provision of car hire services to Ryanair’s 100 million annual customer base. Ryanair would expect to have a replacement supplier linked to the airline’s website by October 2015 which will coincide with the launch of Ryanair’s new and improved personalised website and mobile app.
“We regret Hertz’s decision to end our car hire agreement at such short notice, 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,” commented Michael O’Leary, CEO at Ryanair.
“We have instructed our lawyers to issue proceedings against Hertz for breach of contract. In the meantime we look forward to entering into discussions with other car hire suppliers who wish to offer their services to Ryanair’s largest European customer base via Europe’s largest travel website,” continued O’Leary.
“We apologise sincerely to our customers for the absence of any car hire services on the Ryanair website from 12:00 (July 2), however this decision has regrettably been forced upon us by Hertz’s short notice. We hope it will not cause too much inconvenience to our customers while we take a few months to identify and agree a suitable replacement provider who wishes to partner with Ryanair during the coming five year period of rapid traffic growth for Europe’s lowest fare airline.
“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.”
Meanwhile, Hertz has said that despite lengthy discussions regarding the contractual dispute it regrets that it had to end its car hire agreement with Ryanair. Hertz has reassured customers that existing bookings will be fully honoured and that future bookings can be made directly at the Hertz, Thrifty and Firefly websites.
“We have enjoyed many years of a successful relationship with Ryanair, but unfortunately we were not able to reach agreement with the airline over a significant contractual dispute in spite of considerable effort,” added Michel Taride, group president at Hertz International.
“The majority of Ryanair passengers who need car hire from the Hertz brands in July and August are already booked and confirmed. Any customer who wishes to book car rental and enjoy great service at competitive rates can make arrangements directly with us. Customers can also modify existing bookings on the Ryanair website.
“Hertz deeply values all of its partnerships, some which have been going for more than 20 years. We strongly believe in mutually beneficial partnerships and would never take lightly the decision to end a key relationship,” mentioned Taride. “We are confident in our legal position and intend to pursue this matter vigorously through the courts.”