Car rental firm Hertz has announced it and certain of its US and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the US Bankruptcy Court for the District of Delaware.

In a statement the firm said the impact of COVID-19 on travel demand was 'sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings'.

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Hertz says it took immediate actions to prioritize the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity. However, it said uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated the action.

The company said the financial reorganization will provide Hertz a path toward a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery.

Hertz's principal international operating regions including Europe, Australia and New Zealand are not included in the US Chapter 11 proceedings. In addition, Hertz's franchised locations, which are not owned by the company, also are not included in the Chapter 11 proceedings.

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All of Hertz's businesses globally, including its Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries, are open and serving customers, the company says.

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"Hertz has over a century of industry leadership and we entered 2020 with strong revenue and earnings momentum," said Hertz President and CEO Paul Stone. "With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery. Today's action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future. Our loyal customers have made us one of the world's most iconic brands, and we look forward to serving them now and on their future journeys."