After taking a beating in the fourth quarter, the car rental market is looking up-at least among the top tier names-thanks to a rapid reduction in rental car inventory, a faster than expected recovery for the travel industry after Sept. 11, and an economy that is slowly but surely shaking off its first recession in a decade.

The car rental industry, which expected revenues to decline by as much as 15% year-over-year in the first quarter, was down only half that much, according to data provided by car rental companies to Moody's Investors Service. Indeed, the Travel Business Roundtable Index has posted five consecutive months of increases since the lows of September. That, combined with a rapid fleet reduction of about 20% across the industry last fall, has allowed companies to raise pricing, amounting to about $5 more per car per day.

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