Trump's TSA payroll order causes Avis and Hertz stock prices to fall

Investing.com – Avis Budget Group (NASDAQ:CAR) shares fell 5% on Friday, while Hertz Global Holdings (NASDAQ:HTZ) dropped 4%, after President Donald Trump announced plans to sign an emergency order directing the Secretary of Homeland Security to immediately pay Transportation Security Administration (TSA) staff.

This move aims to address the budget deadlock that has caused chaos at airports and left federal workers unable to receive paychecks. The statement reversed the earlier gains made by rental car stocks due to the airport turmoil.

On Thursday, Hertz shares rose 9%, while Avis soared 13%, marking the largest single-day increase since June. This surge was driven by investor expectations that the long lines at airport security caused by the partial government shutdown would lead more travelers to choose car rentals instead of flying.

This week, traffic to Hertz’s website surged about 15% as customers sought alternatives to air travel. The company has been promoting last-minute booking and one-way rental discounts to take advantage of the chaotic situation.

The reversal of rental car stocks occurred after Trump’s announcement, indicating that the TSA staffing crisis involving federal workers may be resolved, which is what caused the bottleneck at airports. Congress has been working to reach an agreement to end the budget deadlock that led to the chaos.

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