Ryanair announced this morning of notification by Hertz that their exclusive partnership to provide car rental services to Ryanair customers was being terminated effective immediately (12:00pm GMT July 2nd). The screenshot above shows the message that Ryanair customers who try to book a car through their website are seeing as of now.
Hertz is blaming breach of contract due to Ryanair's agreement with GDS distribution companies which Ryanair says has been in place since April 2014.
GDS systems allow customers to book Ryanair flights through third parties, bypassing Ryanair's website and thus cutting Hertz out of the chance to attract a car hire booking. Hertz services were heavily promoted on the Ryanair website, particularly at the end of the flight booking process. Until April 2014, the only way to book a Ryanair flight was on their own website which exposed every client to Hertz.
Michael O'Leary, Ryanair Chief Executive said in a statement:
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.
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 (100m passengers p.a.) via Europe's largest travel website www.Ryanair.com.
We apologise sincerely to our customers for the absence of any car services on the Ryanair website from 13:00hrs today, however this decision has regrettably been forced upon us by Hertz's short notice this morning. 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 5 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 hir services will be recovered from our legal proceedings against Hertz, we do not expect this interruption to have a material impact on current earnings.
Even if Ryanair is successful in their action to recover damages from Hertz, in the short term this will be very painful for the airline. Car hire has always been a lucrative source of revenue for the company. Having the plug pulled on them right at the start of peak travel season will not only be an inconvenience to their customers but a hefty hit to revenue until a suitable replacement and technology solution can be implemented.