UPDATE 2-Avis Budget Q1 net loss widens; shares fall

* Q1 loss $0.48/shr vs $0.11/shr

* Q1 rev 17 pct to $1.19 bln

* Sees continued weak demand for vehicle rentals in Q2

* Shares down 18 pct after the bell

(Adds details, updates share movement)

May 6 (Reuters) - Car rental company Avis Budget Group Inc (CAR.N) posted a wider quarterly loss, as rentals declined across the board, and said that it expects demand for vehicle rentals to continue to be challenging in second quarter 2009.

"Demand for car rental services has been weaker than we anticipated, with declines outpacing those recorded in first quarter 2002 (following 9/11)," the company said in a statement.

Rental car companies, like Dollar Thrifty (DTG.N), Hertz Global Holdings Inc (HTZ.N) and Avis Budget, have been hurt by the slowing economy as customers cut their discretionary spending on travel, translating to lower rentals.

The company, which expects to continue to adjust its fleet levels to reflect car rental demand, said it reduced headcount by another 1,000 positions in the quarter.

In the first quarter, Avis took a restructuring charge of $6 million primarily related to the job cuts in the fourth quarter of 2008 and first quarter of 2009.

As of March 31, the company said it remained in compliance with its financial covenant requirements under its senior credit facility.

For the quarter, net loss was $49 million, or 48 cents a share, compared with $12 millon, or 11 cents a share, a year ago.

Excluding items, the company lost 44 cents a share.

Revenue fell 17 percent to $1.19 billion.

Domestic car rental revenue fell 15 percent, while international car rental dropped 29 percent. Truck rental was down 10 percent, the Parsippany, New Jersey-based company said.

Earlier in the day, Dollar Thrifty posted a narrower quarterly loss, helped by lower expenses, but said it expects fleet costs to remain challenging on a year-over-year basis.