National Car Rental ran revenue management and avoided liquidation

In 1993 National Car Rental faced liquidation; parent General Motors took a $744 million charge, and about 7,500 jobs were at risk unless the car-rental arm could show a profit quickly.

The firm launched a comprehensive revenue-management program whose core was a suite of analytic models managing capacity, pricing and reservations, deciding at the network level which rentals to accept and at what price.

The first implementation in July 1993 returned the company to profitability; a fuller system in July 1994 improved revenue by $56 million in its first year, and in April 1995 GM sold National for an estimated $1.2 billion.

Price rental cars like airline seats

Idle rental cars earn nothing until rented, like unsold seats on a flight.

Flat-rate acceptance ignored which customers a car should be saved for.

Network-level capacity and pricing unlocked revenue from the same fleet.

Measured: $56 million added in the first year, and a $1.2 billion sale.

When an asset earns nothing while idle, treat its availability as perishable inventory and price and hold it the way airlines price seats, instead of taking every reservation at a flat rate.

National returned to profitability within months of the 1993 rollout, and the improved revenue stream was a central reason GM could sell the business in 1995 for an estimated $1.2 billion rather than write it off.