Royal Caribbean managed to decrease its quarterly loss in the third quarter by $100-million thanks to the limited resumption of cruises in Italy and Germany, losing $1.2-billion between July and September instead of the $1.3-billion loss it saw in Q2.
Royal Caribbean, along with the rest of the global cruise industry, suspended cruise operations in March, resulting in record quarterly losses for the second and third quarters, although Q3 results have shown a slightly improvement.
Royal Caribbean’s German cruise brand TUI has resumed limited cruises in Germany, while its flagship Royal Caribbean International brand recently received approval from the government of Singapore to resume cruises aboard Quantum of the Seas.
The permission to resume cruises in select locations is the result of Royal Caribbean’s health and safety protocols for combatting the spread of COVID-19.
They were developed by its Healthy Sail Panel, a joint effort with Norwegian Cruise Line to form a panel of globally recognized medical and scientific experts
“The work of the Healthy Sail Panel has been thorough and comprehensive,” Royal Caribbean said in a statement. “We are grateful for its enormous dedication and passion, which has resulted in what has quickly become the seminal document in this arena.”
“We are also grateful for the time the CDC and their observers have spent on this important topic with the Healthy Sail Panel,” added Richard D. Fain, Chairman and CEO, Royal Caribbean. “We understand the importance of getting this right and are preparing to put these plans to the test with a gradual and methodical return to service in the near future.”
Although Royal Caribbean is hopeful of a return to service before the end of the year (the CDC’s No Sail Order will expire on Saturday), it said in a statement that it continues to shore up its access to liquidity in preparation for an extension of the pause in cruises.
This includes a US $700-million increase in liquidity through a 12-month loan and a US $1.15-billion increase in liquidity through a combination of a convertible bond issuance and a common stock public offering.
Royal Caribbean requires US $250-million to US $290-million every month during the lockdown for ongoing ship operating expenses, administrative expenses, hedging costs, and expected necessary capital expenditures for newbuild orders.