Operator: [Operator Instructions] And our next question comes from Chris Woronka with Deutsche Bank. And Chris, your line is now live.
Chris Woronka : Hey, thanks for taking the question. So congratulations on another great quarter. First, and then you know, my first question is really when you think about wheat for 2024, I know you said most of your buys are already done what but what what’s the kind of the macro, very high level macro view that that kind of underpin your decision on sizing. There’s a lot of stuff going on in the world and we don’t know what economics look like next year. So you just talk about kind of, you know, when you say you’re entering next year, with a more cautious view on overall fleet size than you than you did and maybe in view of that some apparent market share gains you’ve had that might make you want to go bigger on fleet. Thanks.
Joe Ferraro : So you know, the way we operate Chris, and you’ve covered us for a long while now. Our peak fleet is in the summer, and we do we do everything we can to make sure that our fleet is in line with demand going into summer anticipating the strong or anticipating the strongest quarter of our year. And I think we did a really good job about that this year. We had our fleet size, you know, when we thought it would be fortunately, we had those Maori wildfires, which, you know, when those occurred, you know, they occurred, you know, without any notice, obviously, and as tragic as they were for the for the people in the communities in Maori. They had a very large effect on our overall utilization and our fleet size. People just stopped going not just to Maori, but everywhere else.
It’s kind of like what’s happened during COVID very quickly. But what normally happens every year is that when we come off the peak we started to deplete and we deplete rapidly you saw in that last year as well. The amount of third quarter peak with the most cars we have in our business and we started taking cars out in a rapid fashion and we have we have done that in the month of September and certainly October and we’ll continue to do that till we get the fleet size down to what we believe is a normal operating size to go into the first quarter and predominately the winter months here in the United States. I think the key word for us for next year is flexibility. Over the years we’ve proven that we can — even during the COVID years we proven that we can get cars and fleet up as demand increases or we take cars out quickly to ensure that we are in line with our demand.
I think if you look historically at our company, you’ll see that we do that we have great experience people we have technology with DFP that gives us some insights into what’s going to happen by certain cities. And so we will continue to do that going into next year. With the uncertainty surrounding geopolitical environments and things of that nature, we will be prudent and if demand goes up bigger than we think will react and if it doesn’t, we will keep our fleets in line. I think the you know with the cost of with the interest cost that we’re seeing now and depreciation or normalizing. I think that’s the most prudent way to attack, you know, wash strategies around the fleet.
Brian Choi: Chris, just add to that on the market share front. I just want to reiterate as we’ve had in the past that we don’t solve to maximize market share here we solve to maximize long term sustainable EBITDA. I think that was shown this quarter as well, where we grew 7.5% in rental days in the Americas that’s well below the 11% that TSA volumes did year over year in the third quarter. You’ll continue to see us like I said fleet slightly below demand.
Chris Woronka: Okay, appreciate that. Thanks, guys. There’s a quick follow up. I think we were pretty impressed with your deal. We margin performance this quarter again and as you’re still growing volume or prove still growing that transaction days in the in the U.S., you know, we normally think about the RPD and prices flowing through to the bottom line and less so on volume given the variable cost but it seems like have you reached a point where you know, whether it’s the utilization level where you know the incremental transactions are perhaps more profitable at the unit level even if pricing is slightly lower, if that makes sense.
Joe Ferraro: You know, this part of that is absolutely true, Chris, if as you know there are certain segments of business that allow us to have a better price opportunity than others. For example, inbound business, it comes with, you know, especially further out it comes with a higher price and a lot of ancillary you know and on revenue that that comes with that type of business. You know, some leisure demand especially on our large company, you know our bigger brand Avis which actually we saw a bus grow at a much significant level more significant level than any of our other brands is for and that comes with a higher price point. So, but to keep pleated back brands or things of that nature that certainly has a benefit on what we see as price.
As far as price as far as you know, operating dynamics, we utilize technology in a differentiated way to look at how we manage our cost lines. And as I said earlier, you know, Brian was running as a CFO and a part time job was to kind of look at how we can better improve our — some of our direct operating costs. And that’s why I moved them out to this role because I think that there’s a future in our ability to keep knocking that down a little bit. But over the past couple of years our efficiencies has improved. Our productivity is in a field especially with our labor in the field is better than it was in 2018. And we’ve been able to improve our NPS. So I think overall, yeah, there are segments of business that promote the best rate and the best profitable outcome as well as you know, dynamics associated with how we manage our direct operating SG&A.
