Posted on 05/16/2020 11:59:17 AM PDT by Capt. Tom
Cruise lines are burning anywhere from $100 million to $1 billion a month as they wait on cruises to resume. Carnival Corporation, Royal Caribbean Cruises, and Norwegian Cruise Line Holdings have all raised money to stay afloat during this unprecedented shutdown due to the COVID-19 pandemic.
It’s been over two months since the last cruise ship departed from Miami on a revenue sailing. When Navigator of the Seas left Miami for a three night cruise to the Bahamas on March 13, the pause in cruises was originally scheduled to last for 30 days.
Although cruise lines have given tentative start dates, no one knows for sure when cruises will start back up as the dates keep getting pushed back. It’s important to note that these start up dates are not set in stone and will likely continue to change. How much cash and liquidity do each of the major cruise lines have and how long can they go without cruises starting back up?
None of the cruise lines are in danger of filing for bankruptcy anytime soon. Norwegian Cruise Line Holdings is now in the best shape of the major three cruise lines after raising over $2 billion last week. Norwegian is currently burning $70-$110 million each month. The company now has enough cash to last until late 2021, even after refunding $67 million to passengers each month from canceled cruises.
Royal Caribbean has roughly one year worth of liquidity. The world’s second largest cruise company is currently burning a little over $300 million a month and they have just under $3.5 billion in capital. Royal Caribbean Cruises sent out a press release earlier this week stating that they are offering 28 of their cruise ships as collateral to secure additional liquidity to make it through this tough time.
Carnival Corporation, the world’s largest travel leisure company with nine cruise lines and over 100 cruise ships, was burning roughly $1 billion a month. In a recent call, Carnival stated that they have enough cash to last through the end of 2020 without cruises resuming. However, the company took additional action this week announcing a combination of layoffs, furloughs, reduced work weeks and salary reductions across Carnival Corporation, including senior management. These moves will contribute hundreds of millions of dollars in cash conservation on an annualized basis.
As you can see, none of the major cruise lines are in danger of filing for bankruptcy anytime in the near future. If one did have to file in 2021, they will likely file for Chapter 11, allowing them to stay in business and reorganize. The cruise industry is a significant contributor to the U.S. and global tourism sectors, according to the Cruise Lines International Association (CLIA), with economic impact in the U.S. exceeding well over $50 billion in total contributions.
On a global scale, the economic output due to the cruise industry continues to produce new jobs and income, generating a total global output of over $150 billion and supporting over 1.2 million total jobs.
Carnival Corporation’s cruise lines: Carnival Cruise Line, Princess Cruises, Holland America Line, Cunard, Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises, & P&O Australia.
Royal Caribbean’s cruise lines: Royal Caribbean, Celebrity Cruises, Azamara, and Silversea Cruises. The company is also a 50% owner of TUI Cruises and a 49% shareholder in Pullmantur Cruises.
Norwegian Cruise Line Holdings’ cruise lines: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises.
Your comment is really enraging. Excusing foreign flags, foreign ownership, foreign employees, dissing America. And you spend your money on these companies? You think it is okay? And maybe even want them to get American bailout?
And go bankrupt before the year is out. The only way the cruise lines make money is through inexpensive crew.
Useful goods manufactured by Americans in the U.S.A. will do well, though, and outdoor exercise in the neighborhood is back. :)
Ultimately it may be trial lawyers that end it. If the cruise lines can’t protect themselves from law suits they could be finished
Once they begin sailing, they’ll get PLENTY of people to go on their cruises.
...and then the media reports will resume.
“In a competitive business you don’t want to have to deal with American unions, American employees, American regulations and American politicians. Also we want the ships built here in this country.”
There have been cruises for DECADES, but the vast majority people were only able to afford it in the past already had enough money to charter yachts. Until today’s model, where the ships and crew are from other countries...at that point they became accessible to the masses. Take away that model (i.e., go back to USA,USA,USA), and cruises go back to the Uber-Wealthy, only.
Right now Carnival is still selling inside and OV and what will they do about the passengers who booked for Jan 2021 and on with inside cabins ???
Right now the start up date with 8 ships from just 3 ports is Aug 1st and all the rest just from US mainland US ports is Sept 1st but that could change to the end of the year...
No Alaska or California till the end of the year...
I would expect our press to cover the cruises on every overboard, murder, Norovirus, suicide, flu, rape, deaths, missing persons, wave damage ,food poisoning, collisions etc. with vim and vigor to hurt the cruise industry.-Tom
“I predict ships will be opened with balcony only rooms sold. Nothing sealed from outside air at first. Oceanview to me is as useless in this environment as inside cabins.”
As they restart prematurely (out of desperation) and the inevitable news stories make the wires, the cruise companies will find that the ONLY CHOICE to keep people healthy is what you are saying (i.e., a few squirts of hand ‘sanitizer’ just doesn’t cut it with Coronavirus) - the cruise companies will realize that they really need to give their customers FRESH AIR...but, by then, they’ll then be out of business.
The question the ex-CEOs will keep asking themselves is whether reconfiguring their ships and updating the ventilation systems, DURING their 2020 downtime, could have kept them in business. But they were too busy screwing their customers, so none of that matters.
Ive always found that the service is very American...all the crew have to speak good English and many have had a good education...whether or not they have ever lived in the US the young people are very Americanized...
“You are wrong...we are booked Sept 12th ...inside cabins are available.”
Take some advice, don’t start packing yet.
Have you ever been on a cruise?
Yeah, a couple. I like them fine, but giving one damned cent to a company that isn’t flagged here- hell no. At least the ship we did Barcelona to Istanbul in was only 700 people and mostly Aussies and South Afrikaners
It’s just like your food or your tools- if you can’t or won’t BUY AMERICAN, then you deserve any injury or illness that results (I mean the generic ‘you’, not you, Tom). Made in USA or I’ll laugh while you’re dying of norovirus or your Chinese chainsaw comes apart and takes your arm off.
The sole business of our government is the safety and prosperity of its citizens, period.
My daughter and her family live in CA. during the school year and come home to MA. for the summer. This year they rented an RV and they’ll explore the US on the way home. They plan to stop at some colleges along the way so grandson #2 can get a look.
Norwegian tried that in Hawaii and it was a dismal failure
We also love cruising and have over 30 cruises since 2003
They pay a lot in taxes and the dividends in the USA are taxed, they just don’t pay income taxes
Watch out for this curveball:
The cruise gets cancelled or moved, but the airline refuses to refund your money because they are flying as scheduled, and it was you who did the cancellation, not the airline.-Tom
I’m glad Jc penny’s and other places are getting kicked to the curb. Selling junk from China. I applauded this weeks news on them. At least cruise companies are transparent in their business.
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