Carnival Corporation has access to US $7.9-billion in cash and cash equivalents, according to a regulatory filing last week, giving the world’s largest cruise company enough money to remain afloat for another year in total shutdown.
The company, which owns nine cruise lines and operates a fleet of 104 ships, has previously said that it is losing around $650 million per month due to the shutdown of the global cruise industry, making it near impossible to earn any revenue.
While Carnival Corp has taken extreme measures to cut costs and conserve cash flow, from laying off staff to selling some ships and scrapping others, it faces an unprecedented challenge as the coronavirus continues to spread in the United States.
The US is the world’s largest cruise market, and the market upon which the majority of Carnival brands rely for passenger bookings, forcing at least two of its cruise line brands, Holland America Line and Princess Cruises, to cancel all itineraries until mid-December.
If the outlook for the spread of coronavirus in the US does not begin to improve in the coming weeks and months, those cancellations will likely run into 2021.
Several other cruise lines that rely on US passenger bookings have already decided to cancel all cruises for the rest of the year.
It’s a mixed bag for Carnival Corp though, because while its UK and US brands, like Cunard and P&O, and Princess, Holland America, Carnival, and Seabourn, remain in lay-up, it’s Italian and German brands Costa Cruises and AIDA Cruises, are making moves to resume cruising.
It had been hoped that P&O Cruises and Cunard might be able to follow suit earlier this month when the UK looked to be emerging safely from lockdown, until the renewed travel restrictions last week due to rising case numbers ended those expectations.
A growing number of US-based cruise passengers are beginning to cancel all cruise plans until next year and even 2022, in anticipation of the coronavirus pandemic remaining a challenge for the industry well into next year.
Hopefully it’s resolved by August, 2021, though, whether due to better countering of the spread of the virus, the development of a vaccine, or more efficient and accurate rapid testing, or we could see a far greater number of popular cruise ships being sold off en masse.