Avis Budget Group Inc. CAR announced that it has entered into a new multi-year partnership marketing deal with Southwest Airlines Company LUV, expanding upon their existing alliance. The agreement will allow Avis Budget to offer products and services of its Avis Car Rental, Budget Car Rental and Payless Car Rental brands to Southwest Airlines’ customers with money-saving offers.
As per the deal, Avis Budget will get the opportunity to advertise rental services of its Avis, Budget and Payless brands on the Southwest Airlines website. Additionally, it can offer its products through the entire online reservation process, including airline confirmation pages and pre-trip emails. Moreover, the deal will enable customers to avail special discounts like the Rapid Rewards credits for completed rentals.
This transaction is a win-win for both Avis and Southwest Airlines. Avis Budget will benefit from its appearance on Southwest Airlines’ website as this will help attract more rental bookings. As for Southwest Airlines, the easy rental facility will enhance customer experience while enabling them to earn more points upon using Avis Budget’s rental services.
We note that last year, Zipcar Inc., a wholly-owned subsidiary of Avis Budget, entered into a partnership agreement with Southwest Airlines. Per the deal, Zipcar membership was offered to the airlines’ crew and its subsidiary AirTran’s employees.
Avis Budget’s expansion strategy has been in full swing via alliances, acquisitions and joint ventures. Last week, the company entered into marketing deal of similar kind with JetBlue Airways Corporation JBLU. We believe the collaborations with both JetBlue Airways and Southwest Airlines will provide Avis Budget with the opportunity to expand its customer base, thereby boosting its top line.
Avis Budget, which competes with Hertz Global Holdings, Inc. HTZ, currently carries a Zacks Rank #3 (Hold).
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