Carnival Corporation CEO Arnold Donald said he was “very disappointed” in the CDC’s guidance released last week on the company’s business update call on Tuesday morning.
Donald mentioned the company has 30 ships in U.S. waters that have achieved “green status” per CDC guidelines, and that the company was continuing to work with the agency and current administration to find practical approaches to resume cruising in a way that is in the best interest of public health.
He said he aimed to have all nine Carnival Corp. brands sailing this summer and that ships will come back on a staggered basis with occupancy rates ramping up over time.
Donald noted an acceleration of booking trends globally, with an AIDA ship sailing the Canaries and restarts set in the UK and Italy shortly.
Donald was also quick to note 59 of 90 of the company’s ships were outside of the Conditional Sail Order, and restarts were being worked on in Asia and Australia.
“At this time, we have every reason to be optimistic we will be sailing in the U.S. before year’s end,” said Arnold Donald, president and CEO of Carnival Corporation, on today’s third-quarter earnings call.
The company’s Costa Cruises brand has already returned to service with two ships in the Mediterranean, soon to be joined by a third ship, the Costa Smeralda, according to Donald. They are sailing weeklong cruises from different Italian homeports. The sister brand, AIDA, is set to launch service later this month, also in the Mediterranean, with German passengers.
Donald explained that the ships are sailing with lower occupancy levels enabling the cruise lines to test and assess their health and safety protocols.
With national brands, Donald said Carnival is ideally positioned for a phased-in return to service, as each brand can be restarted independently, and in most cases with ready access to drive-to markets.
Also, with a small percentage of the fleet entering service, for now, he said, there will be less reliance on new-to-cruise, compared to all previous growth cycles that required the brands to tap more new passengers.
In addition, as Carnival is disposing of some 18 older ships and right-sizing its shoreside organization, Donald said a leaner and more efficient company would emerge.
“All initiatives going forward will be focused on maximizing cash generation and creating shareholder value. The delivery schedules of new ships have been stretched out and there is only one new ship on order for 2024 and one for 2025. This will further reduce our capital expenditures and allow us to repay debt,” he added.
Added David Bernstein, CFO and chief accounting officer: “We are focused on assets that are cash generative, so we can pay down debt, rebuild our balance sheet and get back to investment-grade rating.
“We are working through a number of different financial scenarios, but there is a lot of uncertainty involved so it is difficult to give (financial) guidance. (However), we expect over time to build occupancy up to generate positive cash flow and reduce the cash burn. The start-up occupancy level is less than 50 per cent. Over time, once we know we have things right, we will increase occupancy, while keeping social distancing in mind as well.”
Bernstein noted that the break-even point ranges from 30 to 50 per cent occupancy for different ships.
AIDA Cruises will expand its range of cruises this fall with new voyages visiting the highlights of Italy, starting on Oct. 17, 2020.
Carnival’s German brand is thus moving up its restart from November to October.
The new seven-day itinerary departs from Civitavecchia near Rome and travels to Palermo and Catania in Sicily, Naples and La Spezia. In Rome, an overnight stay is planned. AIDA did not say what ship will be put into service first.
The voyages will be offered weekly until Nov. 28, 2020.
Bookings open Monday, Sept. 21.
AIDA had previously announced its fall and winter program for 2020 and 2021, sending the AIDAmar to the Canary Islands, starting Nov. 1, 2020, followed by the AIDAperla Nov. 7, taking over the program originally intended for the AIDAnova.
The AIDAmar will sail from Las Palmas, while the AIDAperla will use Tenerife in addition to Las Palmas for turnarounds.
AIDA also plans to launch service in the Western Mediterranean with the AIDAstella on Dec. 12, 2020, sailing seven-day cruises from Palma, Mallorca.
Wetravel2u's Weblog 