Spirit Airlines CFO Haralson Joins Struggling Hertz To Lead Car Rental Firm's Cost-Cutting Efforts
Car rental service Hertz Global Holdings Inc (NASDAQ:HTZ) has named Scott Haralson, the CFO of Spirit Airlines Inc. (NYSE:SAVE), as its new finance chief.
What Happened: Haralson will leave Spirit to join Hertz by the end of June, succeeding Alexandra Brooks. Haralson has previously worked with Dish Network, Frontier Airlines, Swift Aviation Group, and U.S. Airways.
“His deep expertise in finance and leveraging the capital markets to drive business transformation will be invaluable to Hertz as we rotate our fleet, deliver operational excellence, build greater cost discipline and undertake other key initiatives to improve our financial performance,” Hertz CEO Gil West said about Haralson.
Hertz added that its COO, Justin Keppy, had resigned on Monday.
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Spirit, meanwhile, said Brian McMenamy would take over as interim CFO from June 14, as the ultra-low-cost airline also struggles to survive in the wake of regulators scrapping a merger deal with JetBlue Airways. Spirit also anticipates its cost-cutting initiatives to generate over $75 million in benefits this year, with projected annual savings exceeding $100 million going forward.
Why It Matters: For the first quarter, Hertz reported an adjusted loss of $1.28 per share, much higher than the analyst consensus estimate of a loss of 44 cents.
The company is now looking to remove 30,000 electric vehicles from its fleet, significantly higher than the number announced earlier this year, as their maintenance and operating costs proved too high to eke out profits.
“We’re tackling both issues – getting to the right supply of vehicles at an acceptable capital cost while at the same time driving productivity up and operating costs down,” Hertz CEO Gil West said in April.
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