Carnival ‘Hopeful’ About Sailing In The US Again In 2020

Carnival Corp. (CCL) gave an update on its U.S. sailings on Thursday as it released details on its business operations. The cruise line, which has suspended some sailings into March 2021, said that it hopes to resume part of its U.S. cruise ship schedule by the end of 2020.

The company did resume some sailings in September under its Costa Cruises brand. Costa set two ships on voyages with limited passengers, which it said were “successful.” Carnival also said it will begin sailing AIDA Cruises starting next week using its gradual phased-in strategy.

Both brands will operate at a reduced passenger capacity and will implement a series of enhanced safety protocols, which Carnival has developed in conjunction with government and health authorities as well as with a team of medical and scientific experts.

Carnival said that its other brands’ ships will return to service over time.

The news of Carnival’s expected sailing return comes as the Centers for Disease Control and Prevention issued a no-sail order in the U.S. through Oct. 31. This aligns with the same date the Cruise Lines International Association said its members would suspend operations until.

Carnival said in its business update that it is “hopeful” the cruise industry will resume cruising in the U.S. this year.

“For many months, cruise lines have worked with experts worldwide to develop unprecedented public health protocols and are hopeful these measures will lead to a gradual, phased resumption of cruising by the end of the year,” Carnival said in a statement.

To reduce its losses, Carnival has accelerated the removal of ships from its fleet for the fiscal year that were expected to be sold over the next few years. The company plans to dispose of 18 ships total, 10 of which have already been removed from the fleet. Carnival said the ships represent 12% of its pre-pause capacity and 3% of its 2019 operating income.

New ship deliveries will move forward with five out of nine ships expected to arrive by the end of fiscal 2021 and nine cruise ships out of 13 to be delivered by the end of fiscal 2022. The company took delivery of the Enchanted Princess on Oct. 1.

“We have come full circle from initiating a suspension in the early days of the pandemic, to transitioning the fleet into a pause status, right sizing our organization and, now, embarking on the phased resumption of guest operations, underway in two of our world leading cruise brands, Costa in Italy and AIDA in Germany,” Arnold Donald, president and CEO at Carnival, said in a statement.

“We have accelerated the sale of less efficient ships, enabling us to capitalize on pent up demand on reduced capacity and structurally lower our cost base, while retaining our most cash generating assets. We are taking aggressive actions managing the balance sheet and reducing capacity to position us to weather this disruption and also emerge a leaner, more efficient company, reinforcing our industry leading position.”

Shares of Carnival were trading at $15.69 as of 3:30 p.m. EDT on Thursday, down 31 cents or 1.97%.

Carnival Cruise In this photo, escorted by water-squirting tugs, the new Carnival Glory arrives in Cape Canaveral, Florida, on July 11, 2003. Photo: Getty Images/Andy Newman

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