Tag Archives: CDC

Cruise Shares Rise as CDC Outlines Quicker Path to Sailing’s Return

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Port of Miami.

Cruise shares advanced after the U.S. Centers for Disease Control and Prevention outlined a new path to the resumption of voyages.

According to the new guidance in a letter to companies on Wednesday, ships can return to U.S. waters with paying customers if 95% of guests and 98% of the crew are vaccinated, bypassing a previous requirement for starting with trial voyages, according to a summary provided by a person with knowledge of the matter, who asked not to be named discussing private communications. The letter was previously reported by USA Today.

Royal Caribbean Cruises Ltd. rose as much as 5.7% to $92.45 in New York trading. Carnival Corp., the industry market-share leader, rose as much as 4.8%, and Norwegian Cruise Line Holdings Ltd. advanced as much as 7.1%.

On Thursday, Royal Caribbean alluded to the letter in its quarterly business update, saying the message had addressed some of the company’s “uncertainties and concerns.” Royal Caribbean said it now sees a pathway to sailing from the U.S. again during the Alaska cruise season, which runs from roughly May to September.

The CDC didn’t immediately respond to a request for comment.

The U.S. cruise industry has been essentially banned from operating via U.S. ports since the beginning of the Covid-19 pandemic in March 2020. The companies have recently ramped up lobbying efforts to win approval for a return, arguing in part that the industry was unfairly singled out for the strictest treatment even as other tourism businesses have returned in some fashion.

CDC Checklist

Technically, the CDC lifted its hard ban on cruising in October, but it replaced it with a checklist for restarting cruises that no operator has yet managed to complete. The industry had previously criticized the conditional sailing order as overly burdensome and out of touch with the new reality since the arrival of Covid inoculations. Florida, where the major cruise companies are headquartered, even sued the federal government to hasten the return of the industry.

But Royal Caribbean said the recent discussions with the CDC have turned more productive.

“They have dealt with many of these items in a constructive manner that takes into account recent advances in vaccines and medical science,” Royal Caribbean said Thursday in its first-quarter business update.

The company reported revenue totalling $42 million, which was slightly better than expected by analysts tracked by Bloomberg.

It said it has started to spend slightly more cash to cover expenses related to restarting the fleet. Royal Caribbean also noted that cumulative advanced bookings for the first half of 2022 are “within historical ranges and at higher prices” to its 2019 pre-pandemic baseline.

Royal Caribbean: U.S. Cruise Service Start By July Realistic

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“We believe we are now seeing a clear way forward to safe cruising in the near future,” said Richard Fain, chairman and CEO of the Royal Caribbean Group, on Thursday’s business update call.

Citing the letter that the U.S. Centers for Disease Control and Prevention (CDC) released last night, modifying its requirements for the industry’s return to service, Fain said it represented a significant improvement in their dialogue with the CDC.

Added Michael Bayley, CEO and president of the Royal Caribbean International brand: “With what (CDC letter) we received last night July looks very realistic (for restarting cruises in North America).”

As for the Alaska season, Fain noted there are uncertainties and that service resumption may require a waiver from the Passenger Vessels Service Act as long as Canada will not allow ship calls. Alternatively, Canada could allow technical calls.

“Given the momentum, there is the reason for optimism,” he added.

“We have had a very constructive dialogue with the CDC and other government agencies over the past few weeks,” Fain continued. “Many elements of the CSO (Conditional Sail Order) were unrealistic. The letter was very encouraging with multiple corrections to the existing CSO, elements that were very challenging. Certainly, vaccinations were a major element of change.”

Fain also pointed out that the company’s brands in Asia and Europe have carried some 125,000 passengers since the shutdown with only 21 COVID-19 cases and that has been without the benefit of vaccinations.

“With cruise ships, we can control the environment and we have already demonstrated that we can do that,” Fain said. 

There are still some uncertainties, however, and Bayley noted that he hopes to see further clarifications in the next few days and weeks.

According to the CDC, ships can reportedly bypass the simulated test voyages it had required before and move to sailings with paying passengers if 98 per cent of the crew and 95 per cent of passengers are fully vaccinated. It will also respond to applications for simulated voyages within five days rather than 60 days as previously suggested.

Commented Bayley: “As soon as we have port plans lined up, we can now apply to the CDC for permission to sail. The process has improved considerably.”

The CDC also stated it will update its testing and quarantine requirements to align with its guidance for fully vaccinated people.

The CDC letter comes as pressure has been mounting on the agency through public opinion, legislative initiatives and lawsuits.

CDC Halts J&J Vaccine Causing Cruise Stocks To Fall

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Cruise Line stocks are under pressure today after the Food and Drug Administration and the Centers for Disease Control announced they will stop using the Johnson & Johnson vaccine at federal sites and urge states to do so as well while they investigate safety issues.

The NY Times reports that the single-dose coronavirus vaccine is being pulled after six recipients in the United States developed a rare disorder involving blood clots within about two weeks of vaccination, officials briefed on the decision said. All six recipients were women between the ages of 18 and 48.

This is particularly bad news for the cruise lines that have been fighting the CDC over the current US cruise ban which some operators consider overly strict. Last week the state of Florida sued President Joe Biden’s administration in federal court seeking to block the Centers for Disease Control and Prevention’s decision to prevent the U.S. cruise industry from immediately resuming operations which have been paused for a year because of the coronavirus pandemic.

Shares of Norwegian Cruise Lines $NCLH, Carnival $CLL, and Royal Caribbean $RCL were all down a few per cent in the premarket this morning immediately after the news was announced.