The coronavirus crisis just claimed another cruise line
How long can a cruise line survive without revenue coming in from sailings? For Birka Cruises, the answer turned out to be about three-and-a-half months.
The Sweden-based cruise operator on Friday announced it was shutting down due to the financial pressure caused by not being able to operate trips during the coronavirus pandemic. Like many other lines around the world, Birka Cruises hasn't offered any departures since mid-March.
"The financial impact of the COVID-19 pandemic's track ... has hit us hard," the line said in a statement posted on its website. "The uncertainty about how travel will develop has also contributed to our having to make this decision after evaluating all possible alternatives."
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Relatively unknown in North America, Birka Cruises offered two- to four-night Baltic cruises out of Stockholm, Sweden, as well as day trips around the Stockholm archipelago.
The line operated a single ship, the 1,430-passenger Birka Stockholm. Birka Cruises didn't say what would happen to the vessel, which is only 16 years old.
Founded in 1971 and originally called the Birka Line, Birka Cruises initially offered trips between Sweden and Finland's Aland Islands but expanded its offerings over the years.
The shutdown of Birka Cruises comes just 11 days after Spain-based Pullmantur Cruises announced that it was insolvent and had filed for reorganization under Spanish insolvency laws. The line blamed headwinds from the coronavirus pandemic that were “too strong … to overcome.”
Related: 23 classic cruise ships that may never return to service
On Friday, reports emerged that Pullmantur, which is partly owned by Royal Caribbean Cruises, may be sending all three of its ships to the scrappers.
Cruise lines around the world halted departures in mid-March as the coronavirus outbreak spread, and nearly all remain in full shutdown mode -- a situation that is resulting in large financial losses.
In part due to a write-down of its Pullmantur assets, Royal Caribbean Cruises in May reported a $1.4 billion loss for the first quarter of the year. That compares to a profit of $249.7 million during the same period a year earlier.
Royal Caribbean Cruises is the parent company of Royal Caribbean, Celebrity Cruises, Azamara and Silversea. It owns a 49% stake in Pullmantur through a joint venture with Cruise Investment Holding.
The reorganization of Pullmantur does not affect Royal Caribbean Cruises’ fully-owned brands such as Royal Caribbean. Wall Street analysts in recent weeks have suggested that a recent bond sale by the publicly traded company should allow it to remain solvent for well over a year even if cruising doesn’t resume.
Wall Street analysts also have said the two other big publicly traded cruise companies -- Carnival Corporation and Norwegian Cruise Line Holdings -- have enough liquidity to survive into early next year or beyond without cruising resuming.
Related: How to book a cruise with points and miles
Carnival Corporation is the parent company of Carnival Cruise Line, Princess Cruises, Holland America and six other lines. Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.
Birka Cruises is part of the Eckero Group, which also owns ferry services in the Baltic. The line said customers booked on upcoming trips would automatically receive a full refund.
"All of us who have worked at Birka Cruises want to take the opportunity to thank you for all the happy laughs and encouraging comments over the years," the line said in its notice of shutdown on its website, according to a Google translation. "It is said that the guest does the party, and you as our guest really did. Big thanks for everything!"
Related: Is cruising done for 2021? This cruise line thinks so
Additional resources for cruisers during the coronavirus outbreak:
- When will cruising resume? A line-by-line guide
- Why you shouldn't expect bargain-basement cruise deals anytime soon
- How to cancel or postpone a cruise due to coronavirus
- Expecting a refund for a canceled cruise? Here's how long it will take
- Some of the year's hottest new ships could be delayed
- Stream these 13 movies, television shows to get your cruise ship fix
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.