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March 14, 2022

Steering a car leasing business through a Ukraine war zone

By Alejandro Gonzalez

What happens when your adopted country is suddenly plunged into war and you have to try and keep your business going as bombs rain down and people flee? Alejandro Gonzalez contacted Avis Ukraine to find out how they are coping.

Running a leasing and car rental operation in the middle of a full-scale war is not a problem that most Avis country managers have had to contend with, but for Haim Kapelnikov, the chief executive of Avis Ukraine, this is now the reality he and his colleagues have to deal with.

Kapelnikov, who has been CEO since 2010, describes his main concerns as “keeping my employees safe, giving them options, keeping the business running and making sure the assets [3,600 vehicles] are operational.”  

Haim Kapelnikov, CEO of Avis Ukraine

Since February 24, when Russian President Vladimir Putin launched a military invasion of Ukraine, Kapelnikov has been busy implementing a plan he hoped would never come to pass, the evacuation of his workforce, spread across 12 car rental locations, to the western part of the country.  

“We thought this might happen and we were prepared,” he says. “This difficult and challenging situation for everyone in Ukraine” has seen 85% of his workforce take up his offer to relocate.  

“Within three days of the war beginning, employees who wanted to be relocated were moved to Lviv, where we’ve located a temporary head office,” says Kapelnikov. Meanwhile, those with extended family in other parts of western Ukraine, have moved there.  

Everyone who can work remotely is doing so, and the business continues to pay all its employees their salaries and their accommodation costs if they have nowhere to go. “No one is a refugee,” says Kapelnikov.  

But not everyone has taken up the offer. “Many of our employees wanted to leave the towns where they live, but often their elderly parents didn’t want to leave, so they have stayed behind not wanting to leave their parents alone,” he says.   

Out of a total workforce of 120, only 20 of 70 remain in the Kyiv office, which still opens daily for several hours. One employee remains in Kharkiv and another in Dnipro, while three remain in Odessa, all of which are either under siege or are experiencing Russian bombardment on the doorstep. “We’re monitoring the situation and if any of our employees decide to be evacuated with their parents we’ve got plans in place,” he says.   

Kapelnikov, who like most Avis representatives in Eastern Europe, runs the business under a franchise arrangement, says he counts on plenty of reliable advice from the American Chamber of Commerce and the European Business Association, as well as support from Avis franchise colleagues in Poland, Hungary, Romania and Slovakia. 

Most of his customers are mainly international corporate clients and local blue-chip companies seeking long-term lease contracts, while short-term vehicle hire is only 10% of the business, he says.

Approval by the Ukraine parliament of President Zelenskyy’s 30-day Martial Law decree on 24 February, was accompanied by business relief measures when the National Bank of Ukraine granted a 30-day nationwide payment deferral and debt forbearance.  

Despite this, most of Kapelnikov’s clients are continuing to meet their lease obligations with only a few asking for payment deferrals due to the war.  

“We continue to pay our taxes as we want to support the government at this time,” says Kapelnikov, an Israeli national who lived in Ukraine with his wife and two children up until 2012.  

“I spend two weekends a month with the family in Tel Aviv and the rest of the time travelling around Ukraine, but most recently also travelling to Poland, where we will evacuate all our employees, including their children and families, should the war develop and spread,” he says.

Avis Ukraine, a member of the Ukrainian Union of Lessors, is among the country’s top 10 leasing companies and has been operating in Ukraine since 1997.

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