Cruise giant Carnival Corporation to remove more ships from its fleet
The Great Shrinking of the Cruise Fleets continues.
Cruise giant Carnival Corporation on Tuesday revealed that its nine brands were in the process of removing at least 18 ships from their fleets as they cut costs and reorganize in anticipation of a slow restart to cruising.
That's three more ships than the company had previously disclosed.
In a regulatory filing with the U.S. Securities and Exchange Commission, the company said eight of the ships already had left its fleets. The rest will leave in the coming months.
For more cruise news, reviews and tips, sign up for TPG's new cruise newsletter.
Based in Miami, Carnival Corporation is the parent company of Carnival Cruise Line, Holland America, Princess Cruises, Seabourn and five other brands that went into the coronavirus crisis with a combined fleet of 104 ships.
Together, the nine brands account for about 45% of all cruises taken in the world, and Carnival Corporation is thus seen as a bellwether for the cruise industry.
All nine of the Carnival Corporation brands halted departures in mid-March due to the crisis, and many have canceled all sailings into November or beyond. It's a shutdown that is unlike anything seen in the history of modern cruising, and it's causing the company great financial hardship.
Related: How to book a cruise with points and miles
The departure of 18 vessels at once is unprecedented in the company's history. It amounts to 17% of all Carnival Corporation ships. That said, the vessels that are leaving only account for about 12% of the company's passenger capacity, it said in its regulatory filing.
Carnival Corporation didn't specify which ships were leaving the fleets of its various brands. But many of the vessels already are known. Carnival Corporation's Holland America brand in July announced it would dispose of four vessels -- Maasdam, Veendam, Rotterdam and Amsterdam. The company's Carnival Cruise Line brand also has announced the removal of four ships -- Carnival Fantasy, Carnival Imagination, Carnival Inspiration and Carnival Fascination.
In addition, the company's U.K.-focused brand, P&O Cruises, recently said one of its vessels, Oceana, had left its fleet, and the company's Europe-focused Costa Cruises brand has disposed of three ships since January: Costa Victoria, Costa neoRomantica and Costa Atlantica. A fourth Costa ship, Costa Mediterranea, will be transferred to a new Chinese cruise line in May.
The company's P&O Cruises Australia brand has announced the departure of two of its vessels, Pacific Aria and Pacific Dawn.
In the regulatory filing, Carnival Corporation suggested the vessels that are leaving are its most inefficient ships. While they have represented about 12% of capacity, they only accounted for about 3% of operating income in 2019, the company noted.
Related: Got a deep wallet? You now can own your very own Carnival cruise ship
Carnival Corporation also said new ship deliveries had been delayed. The line now only expects five of the nine ships it had ordered for delivery in 2020 and 2021 to arrive in that time frame.
The disclosures, in an 8-K filing, came as Carnival Corporation offered a preliminary look at its earnings for the third quarter of 2020, a period when it did not have a single ship sailing with passengers. The company said it had lost $2.9 billion during the quarter, which ended on Aug. 31. The number included $900 million in non-cash impairment charges.
The company said it had burned through about $770 million in cash per month during the third quarter. During the fourth quarter, it expects its cash burn to drop to around $530 million per month.
As of Aug. 31, the company had about $8.2 billion in cash and cash equivalents on hand -- enough to keep it solvent for more than a year at the current cash burn rate.
For now, nearly all of Carnival Corporation's ships remain on hiatus.
In early September, one of the company's ships -- the 2,260-passenger Costa Deliziosa -- resumed sailing in the Mediterranean. The vessel is operating seven-night voyages out of Trieste, Italy, to Italian ports for Italians. A second Costa Cruises ship is scheduled to resume operations out of Italy in the coming days.
Shares of Carnival Corporation (CCL) were down around 7% in early trading Tuesday on the news of the line's third quarter loss and additional ship disposals.
Additional resources for cruisers during the coronavirus outbreak:
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | 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. |
| 4X | 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. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
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 $8,000 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.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.