13 cruise ships to be scrapped or sold as Carnival Corp. manages COVID fallout
Get ready for the Great Shrinking of the Fleets in the cruise world.
The CEO of Carnival Corporation -- the world's biggest cruise company -- on Friday revealed that its nine brands would remove 13 ships from their fleets in the coming months as they cut costs and reorganize in anticipation of a slow restart to cruising.
"To reduce our cash burn and have a more efficient fleet once we do resume cruising, we have aggressively shed less efficient ships," Carnival Corporation CEO Arnold Donald said during a conference call with Wall Street analysts to discuss quarterly earnings.
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 September or October. It's a shutdown that is unprecedented in the history of modern cruising, and it's causing the company great financial hardship.
Just a few weeks ago, Carnival Corporation said in a regulatory filing that it would dispose of six ships within 90 days and maybe more. Friday's announcement more than doubles the confirmed number of vessels that will leave Carnival Corporation brands.
Related: How to book a cruise with points and miles
The departure of 13 vessels at once is unprecedented in the company's history. Donald said it would amount to a nearly 9% reduction of capacity at the combined brands.
Donald didn't specify which ships would leave the company's fleets. But several of the vessels already are known. The company's U.K.-focused brand, P&O Cruises, announced this week that its 2,016-passenger Oceana would be departing. The news came just days after the company's Europe-focused Costa Cruises brand said its 1,928-passenger Costa Victoria had sailed its last voyage for the line.
Related: A major cruise line is scrapping a ship that's just 23 years old
The list also includes several ships that the company already had agreed to sell before the coronavirus crisis hit, including the 1,546-passenger Pacific Dawn and the 1,260-passenger Pacific Aria. Both ships currently sail for Carnival Corporation's P&O Cruises Australia brand.
Donald suggested the ships leaving the various fleets will be their older, less-efficient vessels, which is in keeping with recent speculation that such older ships as Costa Cruises' neoRomantica and Holland America's Maasdam could be on the shortlist for retirement.
TPG recently published a list of 23 ships that we thought were most likely to be laid-up, sold or scrapped in the wake of the coronavirus pandemic that included Costa Victoria, Pacific Dawn, Pacific Aria, neoRomantica and Maasdam as well as several ships from Carnival Corporation's Carnival Cruise Line and Princess Cruises brands.
Asked by an analyst whether the ships leaving the Carnival Corporation fleets would be scrapped or sold to entities that might reuse them, Donald suggested that most appeared headed for reuse, though a few would be "recycled."
Donald objected to the analyst's use of the word "scrapped," which is a common term used in the shipping industry for what happens when a ship is taken apart after its useful life.
In addition to shedding older ships, Donald said Carnival Corporation would add new ships at a slower pace over the next couple of years. The company has 16 vessels on order for its nine brands that it said would roll out more slowly than originally planned.
Related: Is cruising done until 2021? This cruise line thinks so
Nine of the ships had been scheduled to start service by the end of 2021, but Donald said the company now would only take delivery of five of the vessels from shipyards by that date.
Donald said no ship orders have been or would be canceled. They'll just be delayed, on average by about five months. The company would rather keep the new ships and eliminate its older ships if it needs to cut capacity, he suggested.
"The new ships are just far more efficient," Donald said. "We would regulate (capacity) by disposing of less efficient ships rather than trying to avoid bringing on the new ships."
Earlier this week, the company's Carnival Cruise Line brand announced that the debut of its much-awaited, 180,000-ton Mardi Gras -- its biggest ship ever -- would push back until early next year. Also already officially delayed is a new ship from Princess Cruises, Enchanted Princess.
Donald said the company's ship capacity would not return to the levels of early this year until 2022 at the earliest.
Still, Donald said the company would return to growth mode soon enough. Cruisers, he noted, were itching to get back out on the water, and bookings for 2021 remained solid.
"Our long-term prospects are especially bright," Donald said. "We've shed less-efficient vessels and lowered our overall cost basis, we reduced near-term capacity, and going forward will introduce newer, far more efficient vessels over time in line with demand generation."
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
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.