Car rental companies appeal for support as “95% of fleet parked up”

The Association of Car Rental Companies in the Algarve (ARA) is calling for more government support at a time when 95% of their vehicles are not being rented out due to the effects of the coronavirus pandemic, which has stalled virtually all tourism activity in the region.

“We have sent the government some measures which we feel are essential for the sector, such as the extension of the lay-off scheme and the suspension of the circulation tax (IUC) and charges at airport car parks,” ARA president Armando Santana told Lusa news agency.

Says Santana, the rent-a-car sector is facing an “unprecedented crisis in the Algarve” with the region’s 46 companies having seen nearly all their cars stopped for the last two months.

“Currently, only 5% to 6% of their cars are being rented due to contracts with other companies and entities,” he said.

The ARA boss estimates that the pandemic may be costing companies “millions of euros” in losses although he said it is still too early to determine exact numbers.

He told Lusa that companies were emerging from the low season with “good prospects” and had even increased their fleet by buying new vehicles; however, now they are faced with a crisis that has taken away virtually all their income.

Thus, Santana is urging the government to extend the lay-off scheme for more months in order to safeguard the jobs of the 1,500 people employed by car rental companies in the Algarve.

But this measure alone won’t be enough to keep companies afloat, he said.

The companies also want to be spared having to pay the IUC circulation tax, “at least for now”. As Santana explains, they hope payment of IUC can be deferred until rental cars are back on the road.

The sector is also calling for the suspension of payment on account and special payment on account – advanced payments towards tax bills – as companies are not expected to make profits this year.

Lastly, Santana is also asking the government to suspend car parking charges at Faro Airport as most companies do not have enough space at their own private car parks for all their vehicles, which are not allowed to be parked on public roads.

He added that the proposed measures are “feasible and would help companies overcome this crisis”.

There are currently 46 car rental companies in the Algarve, not including the multinational companies also operating in the region.

Santana told Lusa that companies feel uncertain about the future and the recovery of the tourism sector in Portugal and in the Algarve in particular.

“I believe that the tourism sector will be able to recover somewhat this year, especially in terms of the national market, but not the foreign market, our main clients,” he said.

michael.bruxo@algarveresident.com