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Hertz ended its 18-year partnership with Ryanair with immediate effect on 2 JulyReuters

Ryanair is to open legal proceedings against US car rental company Hertz, which in a surprise move terminated its long-standing contract with the budget airline.

The Irish airline said in a statement that it received a notice on 2 July that Hertz was ending its exclusive car hire supply deal with the low-cost carrier with immediate effect, alleging that the latter's use of global distribution system (GDS) companies to sell air tickets represented a breach of contract.

GDS services such as Amadeus and Travelport allow travel agents and online booking services to sell Ryanair tickets without having to visit the airline's website, where Hertz's car rental services were advertised.

Ryanair, which had a contract with Hertz until 2020, has in turn opened legal proceedings against the car hire firm for breach of contract and damages.

"We regret Hertz's decision to end our car hire agreement at such short notice today, at a time that will cause maximum inconvenience to our customers during the peak travel period," Ryanair CEO Michael O'Leary said.

"We have had a long and successful partnership with Hertz, and it's a pity that this has ended in such an unfortunate and untimely manner.

"We have instructed our lawyers to issue proceedings against Hertz for breach of contract."

All existing bookings at Hertz will be honoured, but Ryanair said it would be unable to offer its customers car hire services for a three-month period while it seeks a new rental car partner.

The Hertz microsite on the Ryanair website has been taken down as a result of the dispute. The two firms had been in a partnership since 1997.

Meanwhile, Ryanair announced that passenger traffic at the low-cost airline grew 14% to 9.5 million, compared to a year earlier in June. The airline's load factor rose five percentage points to 93%.

The company said it's "Always Getting Better" customer experience improvement programme had delivered better than expected load factors during its summer schedule.