The CDC’s “no sail order” has left about 100 cruise ships within the Atlantic, Pacific or Gulf of Mexico idle, both in port or wallowing at anchor.


Norwegian Cruise Line warned that its upcoming monetary statements will carry an announcement detailing “substantial doubt” about its means to proceed as a “going concern” within the wake of the coronavirus pandemic, one other signal of how the disaster is affecting the cruise industry.

“The present, and unsure future, affect of the COVID-19 outbreak, together with its impact on the flexibility or want of individuals to journey (together with on cruises), is anticipated to proceed to affect our outcomes, operations, outlook, plans, targets, progress, status, money flows, liquidity, demand for voyages and share value,” the corporate mentioned in an SEC filing on Tuesday.

The corporate warned it might must reorganize, presumably by way of chapter proceedings.

This comes after the CDC prolonged a “no sail order” final month that it imposed in March to assist quell the unfold of the coronavirus. Carnival Cruise Line will resume a few of its North American cruise service this summer time starting Aug. 1.

According to its investor calendar, Norwegian is scheduled to launch its month-to-month site visitors report on Thursday and its first quarter outcomes on Could 28.

Anchors aweigh? Carnival Cruise Line to resume some North American cruises in August amid coronavirus

Norwegian bookings for the remainder of 2020 had been “meaningfully decrease” than final 12 months, as of April 24.  Waiting for 2021, reserving tendencies present that cruise demand is barely down in comparison with the identical time final 12 months, with pricing down mid-single digits.

“Through the non permanent suspension of our cruise voyages, we count on to be required to pay money refunds of superior ticket gross sales with respect to a portion of our canceled cruises,” the submitting mentioned.

The corporate’s manufacturers have instituted visitor packages for canceled sailings, which embrace value-add future cruise credit in lieu of cash refunds. The corporate had $1.eight billion in superior ticket gross sales as of March 31, although this consists of beforehand introduced voyage cancellations by way of June 30 that add as much as about $850 million. In these instances, visitors have the selection of a cruise credit score or refund.

It has about $350 million from voyages scheduled for the remainder of this 12 months.

The corporate is taking numerous measures to mitigate the monetary results of the disaster, by way of price saving and money conservation measures.

These embrace plans to scale back ship working prices (suppose meals, gasoline, port prices and lowered crew) and administrative bills.

Whereas the cruise business has managed to disembark passengers from ships, it has struggled with how one can take away hundreds of crew members.

For Norwegian, advertising spending has seen a “important discount or deferral” for the primary half of 2020 and there was a company-wide hiring freeze. The corporate has launched a shortened work week and lowered hours, leading to a 20% wage discount for shoreside staff and a pause in 401(okay) match.

Norwegian instructed its staff on April 29 that about 20% of them could be furloughed, typically starting on Could 1 and anticipated to final by way of July 31. This date could change to earlier or later. Staff will nonetheless obtain well being advantages if they’ve them by way of the corporate. These not furloughed  could have this shortened work week and lowered hours by way of not less than June 22.

Cruise ship operators registered in international international locations, as Norwegian is (it is included in Bermuda), had been shut out of the CARES stimulus package signed into legislation by President Donald Trump in late March, which was supposed to profit U.S. firms solely.

One other survival technique could embrace looking for further financing from the private and non-private markets by way of fairness or debt securities.

Contributing: Chris Woodyard, Daybreak Gilbertson


Present Thumbnails

Present Captions

Learn or Share this story: