The Payless-Sixt Alliance

If Sixt management had any lingering doubts about Payless’ commitment to the companies’ new partnership, Payless President and COO Mike Harley did his best to squelch those in December. In the midst of the holiday season, Harley left behind the mild temperatures of his company’s St. Petersburg, Fla., headquarters to attend a Sixt franchisee meeting near Munich. With temperatures well below zero, Harley’s Sixt hosts also persuaded him to take part in a local tradition: drinking hot wine.

“The weather was brutally cold and the hot wine was the only way to stay warm,” Harley recalls with a laugh.

In addition to touring Sixt’s corporate headquarters in Pullach, Harley spoke with some of the company’s major franchisees about their hopes for the new alliance. And the exchange wasn’t merely ceremonial. After fielding their inquiries about tour business, Harley decided it was time for Payless to further investigate this segment.

“I was asked whether Payless in the U.S. was going to be prepared to handle tour business from Europe, the Middle East and Africa,” Harley says. “In the past, we haven’t been in the tour side of business. But that’s something we’re going to take a serious look at in 2004. We’ll work together with Sixt on that. We’ll need to be trained on how to handle that clientele.”

Harley also used the opportunity to invite Sixt franchisees to Payless’ next franchisee meeting, scheduled for October in Las Vegas.

This collaborative spirit and give-and-take flexibility are assets that helped Payless seal the partnership with Sixt last September. The agreement creates a global network of more than 1,400 car rental locations in more than 60 countries, with a fleet of approximately 110,000 vehicles.

Under what’s officially known as a “cooperation agreement,” Sixt and Payless exchange reservations in an exclusive arrangement and accept each other’s methods of payment. The two companies have also agreed to the common use of booking channels for Internet, travel agency and call center reservations. What’s more, Payless’ U.S. call center now handles all referral calls from Sixt’s 29 hotel and airline partners whenever a U.S. customer requests a rental car in one of Sixt’s markets.

Under the agreement, Sixt is responsible for rentals in Europe, the Middle East and Africa. Payless covers rentals in North America, Central America, South America and Australia. Both companies will continue to operate under their own brand names, but some signage in airport locations and promotional materials will feature partner logos.

Sixt’s partnership with Payless replaces a similar agreement Sixt reached with Dollar Rent A Car in 1999. Before the affiliation with Dollar, Sixt had been a longtime Budget licensee in Germany and accessed U.S. business through Budget. But in the mid-’90s, after Sixt began expanding its own operations internationally, Budget opted to terminate the license agreement.

CONTINUED:  The Payless-Sixt Alliance
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