Carnival Corporation, the world’s largest travel and leisure company operating nine cruise lines and over 100 cruise ships, released an update this morning regarding the COVID-19 pandemic.
Carnival is now selling 13 older cruise ships from their fleet. The company also announced that only five of nine new cruise ships will be delivered by the end of fiscal 2021.
Carnival Corporation expects to resume guest operations, with ongoing collaboration from both government and health authorities, in a phased manner.
Specific cruise lines and cruise ships are expected to return to service over time to provide guests with unmatched joyful vacations in a manner consistent with the company’s highest priorities, which are compliance, environmental protection and the health, safety and well-being of its guests, crew and the communities its ships visit.
Carnival expects future capacity to be moderated by the phased re-entry of its cruise ships, the removal of capacity from its fleet and delays in new ship deliveries. As previously announced, the company intends to accelerate the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years.
Carnival sold one ship during June 2020 and has agreements for the disposal of five ships and preliminary agreements for an additional three ships, all of which are expected to leave the fleet in the next 90 days.
These agreements are in addition to the sale of four ships, which were announced prior to fiscal 2020. In total, the 13 cruise ships expected to leave the fleet represent a nearly nine percent reduction in current capacity.
The company currently expects only five of the nine cruise ships originally scheduled for delivery in fiscal 2020 and fiscal 2021 will be delivered prior to the end of fiscal year 2021. In addition, the company expects later deliveries of ships originally scheduled for fiscal 2022 and 2023.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “We have been transitioning the fleet into a prolonged pause and right sizing our shoreside operations. We have already reduced operating costs by over $7 billion on an annualized basis and reduced capital expenditures also by more than $5 billion over the next 18 months. We have secured over $10 billion of additional liquidity to sustain another full year with additional flexibility remaining. We have aggressively shed assets while actively deferring new ship deliveries. We are working hard to resume operations while serving the best interests of public health with our way forward informed through consultation with medical experts and scientists from around the world.”
Donald added, “We will emerge a leaner, more efficient company to optimize cash generation, pay down debt and position us to return to investment grade credit over time providing strong returns to our shareholders.”
Carnival Corporation owns and operates the following cruise lines: Carnival Cruise Line, Princess Cruises, Holland America Line, Cunard, AIDA Cruises, P&O Cruises, Costa Cruises, Seabourn, and P&O Australia.
