The 747 and Daily Rental: Superjets' Challenge to Rent a Car

When it comes to the new superjets, everyone is an expert with an opinion. Some claim they are too big, are not economical to operate, and pose new threats fo air and noise pollution. Others see them as a boon to increased economical air travel, comment on their luxurious facilities, and see them as a logical answer to the transportation needs of an ever-shrinking world.

We of Automotive Fleet are in no position at this early date to comment on the pros and cons of the new maxi-planes. But, we do feel that they are bound to have a profound impact on the rent-a-car segment of our industry. Consequently, we contacted a number of leading daily rental companies to discover how they view the advent of this new market and what, if any, plans they have for meeting the challenge of meeting an increased demand for their product.--Editor

The advent of the era of the super jets represents a gamble by aircraft manufacturers and airlines on the future of aviation. The size of the risk is in the billions of dollars, with success linked to and dependent upon support from hundreds of cities and communities around the world.

In this article we are going to consider the impact of the new large jets on the rent a car industry. The rent a car industry is an integral part of the essential ground transportation system in support of airline/airport operations.

As such, to achieve a feel of the impact we need to understand the relative size and importance of rent a car at airports. Rent a car is normally the number two concession revenue producer on the airport (public parking being number one). In some instances, rent a car fee payments even exceed those of scheduled airlines using the airport.

The Challenge of the Super Jets

Rent a car activity at airports generally follows the pattern of airline passenger traffic. Passenger traffic during the past year, 1969, grew at a slower rate (12.6% increase over 1968) than in the average of the four previous years (18%). The rate of growth has slowed more in 1970 (down to an expected 1.5% increase) even after the introduction of the super jets. The increase for 1971 is anticipated to be 7.2%. It is expected that this trend will improve, materially, when the economy turns upward. This is the case since airline passenger traffic fluctuates up or down in relation to the economy and disposable income.

In spite of our troubled times currently with the contradictory forces of inflation and a tight money market, the future for the travel industry in general shows many bright spots. The Federal Aviation Administration forecast an improving passenger traffic increase of 12% per year for 1972-1981. In addition, recent demographic studies in the United States have developed some very impressive figures regarding the next decade.

• Our U.S. population will increase by 22%.
• Those with college educations will increase by 72%.
• Those with annual incomes over $10,000 will increase by 105%.
• Those under 34 years of age and who will be earning more than $10,000 will increase by 156%.
• Air travel by U.S. citizens will increase by 10,000,000 people.

This young, educated group with increased income are children of the air age. They accept air travel as my generation accepted the train. The old fear of language barriers have practically disappeared. Inter-country and inter-continental travel are accepted as commonplace.

Another obvious fact is the ever increasing amount of leisure time. The present trend of shifting holidays to create three and four day weekends will shortly be joined by shorter work weeks and longer vacations. One major economist estimates that leisure time will increase by an average of 200,000,000,000 hours per decade.

This combination of education, sophistication, income and leisure time offers untold opportunities for the travel industry and all its component parts.

A recent poll conducted in the U.S. showed that the cost of travel is not the major deterrent you might expect. The "uncertainty" of travel is a significant factor. We must demonstrate to this new market that travel is a pleasure.

Convenience, punctuality and adequate accommodations in all phases of the trip must be provided. All of us in this business-airports, airlines, hotels, tour operator and car rental companies have a common interest in the attainment of the goal.

Congestion-The Major Problem

The lack of space is the biggest problem facing rent a car companies at major airports. This problem is compounded by the new high capacity super jets. Land is often not available in the quantity needed to accommodate the facilities and related parking areas required. This problem is not exclusive with rent a car companies; it plagues most concessionaires and airlines.

This problem has grown and intensified parallel to the growth of air travel. If this major dilemma is to be solved, it will require realistic planning and cooperation between airport management, concessionaires, airlines and the community where the airport is located. Congestion, if excessive at an airport and if not corrected, will ultimately have adverse economic effects upon the community involved. Air traffic and travelers will gravitate to the less congested airports when choice exists.

Rent A Car's Answer- The Quick Turn-Around Facility

"Rent A Car" is a service business and service implies speed and convenience. The only way an airport rental operator, with his high operating overhead, can effectively maintain the standards and quality of service needed at airports is to have a strategy to provide faster and more convenient service, in spite of the increase in number of passengers. To do this he must have close-in, adequate facilities from which to operate.

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The handling of the ever-increasing number of rental cars in the terminal area is being erased by the construction of what we term a "quick turn-around facility". This consists of an area large enough to provide between 300 and 1,500 spaces in the terminal area (depending on the size of the airport and volume of traffic) which is allocated to the car rental operators.

On this site each operator constructs a one bay wash facility with adjoining gas pumps and tanks. Where all parking is ground level, such a site is located close to the terminal building within convenient walking distance for the passenger. Where multi-level garage structures are involved, a floor of the building or that portion needed is sometimes allocated for this function.

Two such structures are currently under construction in Seattle, Washington, and in Tampa, Florida; others are on the planning boards in several major U.S. airports and should be under construction soon. Since such areas are in prime space, we recognize the need for high aesthetic values in building design and attractive screening from the public of the more utilitarian aspects of the operation.

Such a concept may cause you to ask: "Doesn't this add to terminal area clutter and congestion?"

The answer to this question is no: such a plan will decrease congestion. You must appreciate that the average rental car enters and leaves the terminal area four times per transaction: (1) the returning renter brings the car to the terminal; (2) the service agent removes the car to the service area for washing and gassing; (3) the service agent returns the car to the terminal rental area, and (4) the renting customer drives from the terminal area off the airport.

A quick turn-around facility such as proposed cuts these movements by 50%. The customer returns the car, it is gassed and washed on the site and rented from there by the next customer. When you recognize that an airport such as Los Angeles or Miami will have a total fleet of 7,000 or 8,000 rental cars in season, it's easy to visualize such vehicles completely tying up the terminal roadway system unless rapid relief is provided.

This arrangement also drastically cuts the customer's waiting time involved in bringing rental vehicles from remote service areas during peak traffic periods.

A New Idea-Fly Avis Non Stop

We are aware that the time is fast approaching when heretofore conventional methods of operation will be obsolete. The car rental industry is painfully aware of this fact and has been diligently applying itself to solutions for the seventies.

At Avis, we have been testing one such method in selected areas. It's called "Fly Avis Non Stop Service". This service makes it possible for our customers to walk directly from the plane to an awaiting car without stopping at the rental counter in the terminal. This savings in time for the customer is accomplished by having him complete the rental agreement at the Avis counter in the departure terminal before boarding the plane. An Avis employee assigned to this program is waiting for each Fly Avis Non Stop customer outside the arrival terminal with the keys to his car. The customer only has to identify himself with his completed rental agreement to receive the keys and drive away.

As we increase the speed and convenience of renting an Avis car, our customers benefit from better quality service. This service is currently being tested between major airports in the greater Los Angeles-San Francisco areas and between any combination of Boston-New York's La Guardia Airport-and Washington's National Airport. As airline passenger loads increase, "Fly Avis Non Stop Service" will be expanded to include other cities, provided the tests prove successful.

An Idea Being Developed-Computerized Rent A Car

Computers which are already heavily used for our accounting work and fleet control are being applied to the rental transaction. The day will come when rental transactions will be computerized and completed in seconds. Suffice it for the moment to say that we are not only trying to make rentals at Avis more convenient, but faster. We will keep trying harder to meet the challenge of an ever increasing number of people to be served in less and less time the challenge of the super jets.

IMPACT OF THE 747 ON DAILY RENTAL

By Patrick W. Zilliacus

The airports now equipped to handle the 747 and other "jumbo jets" include LAX, JFK, SFO, Orly in Paris, and Heathrow in London. Other airports are rebuilding rapidly to accept this huge aircraft. While the 747 will relieve the air controller problem (more passengers will be handled in one air plane with fewer airplanes to control) it will create enormous problems in the handling of these passengers on the ground.

"Boa Constrictor" Problem

Evolving then is the classic "boa constrictor eating a calf" problem; that is, passengers will arrive in a large group that have to be "digested" suddenly by the airport facilities and discharged into the adjacent community. After that, a period of relative calm will set in until the next 747 arrives.

During the discharge process of the 747, all the facilities of the airport terminals will be strained, including baggage handling, telephones and, of course, car rentals. Lines at the in-airport car rental desks will be long and tempers will become short among those waiting. The in-airport auto rental companies are rapidly finding that their cars will have to be stored away from the airport; probably as far away as the locations of the off-airport rental companies. Since Airways is both an in-airport and off-airport company, having locations in the terminals in airports in Denver, Oklahoma City, Tulsa, Portland, Hollywood-Burbank, Spokane, and Edmonton, Alberta, we can view the problem from two vantage points.

The Airways Solution

In the majority of cities, we are located near, but not in the airport, and we believe that these locations will benefit from the 747. The reasons for these are the following:

1. The delay and long lines at the airport rental offices,

2. The fact that cars will not be stored in the immediate airport area by anyone. Thus, the "Big Three" will have to use a pickup vehicle like the off-airport operators do.

3. The fact that the jumbo jets will stimulate travel by those paying their own expenses rather than those on an expense account, making low rates-particularly our no mileage rates-attractive.

4. The pressure to curtail expenses by corporate controllers and others who approve expense accounts. These people now realize the service offered to their traveling employees by major car rental systems featuring "off-airport rates" can be closely equivalent to that offered by the "Big Three", and the savings are considerable.

5. The increased sophistication of the travelers themselves who want to make maximum use of their travel money and know the various ways to do so.

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In our case, we, at Airways, are gearing up to handle this change in traveling habits of the American public by emphasizing our free mileage rates in our advertising, by opening our new offices in convenient locations near airports, and by making it known through mass media that Airways will accept and confirm instantly computer-handled reservations in all our 200 offices from coast to coast in the United States and Canada as well as through travel agencies, AAA, and directly through our toll-free telephone numbers.

We feel that the next few years will be most rewarding for us and expect to see spectacular growth for Airways in North America as well as overseas.

 

NO PROBLEMS AS YET FROM 747

By Morris Belzberg

In my humble opinion the increase in car rental business will not vary a great deal as a result of the 747, but will increase in a normal 15 to 25% pattern as a result of air travel as a whole. The rate structure of air travel has not been decreased as was anticipated in the past, and as a result people are flying in a normal increasing pattern. Therefore, the industry should not be affected, one way or the other, due to the 747.

As for the problems involved, the advent of the 747 only - tends to disgorge larger numbers of passengers at one time, thus complicating counter procedures, but this can be handled simply by adding more counter personnel in large get ready areas.

In Budget's case, we are outside of the airport in most cities so our space problem is not near as critical as the in-airport rental operators.

In the last two months, the deluge of passengers which was contemplated has not materialized, or at least not recognizably so at our counters. Our business has increased, however, at a better than 30% rate over last year and whatever the reasons, we are both thankful and happy.

RELOCATION OF FACILITIES KEY TO SOLUTION

By Paul V. McPeake

I foresee no increase in car rental business as a direct result of the advent of the 747. I do see a multiple translation or transfer of car rental business:

1.To off-airport satellite car rental locations by expedited courtesy transportation.

2.To conveniently located motel/hotel locations for later rental-not on arrival.

The 747. in my view, will concentrate rather than disperse demand, and bring with it problems of highly concentrated demand; at least temporarily causing a slowdown in service at the airport itself.

We plan an expanding network of locations to serve the airports efficiently, both departing and returning.

Obviously, overall air travel will continue its increase, but not simply because of the 747. The business traveler can afford to travel no other way. In increasing numbers, the vacation traveler must take to the air.

We are devoting study and planning to cut down time on paperwork required of the customer. In the service businesses (not restricted to rent-a-car, the attitude of, "hurry up and wait", must be reversed.