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.
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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:
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- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees