Sign of the times: A major cruise line is scrapping a ship that's just 23 years old
The Great Scrapping of the Cruise Ships has begun.
The mayor of Piombino, Italy, on Tuesday, revealed that a Costa Cruises vessel that arrived in the city this week, the 1,928-passenger Costa Victoria, would be dismantled.
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"This morning I went to welcome this sea colossus [Costa Victoria] and his captain, Gianfranco La Fauci, to the city before the ship is embarked on the process of preparing for demolition," Francesco Ferrari said in a Facebook post originally written in Italian.
The post showed Ferrari visiting the ship after it arrived in Piombino, which is along the Italian coast north of Rome.
"The port of Piombino and its industries represent an enormous potential for the development and relaunch of the city economy, and the arrival of this ship is another important confirmation," Ferrari said in the post, according to a Facebook translation of the original Italian.
Unveiled in 1996 and not quite 24 years old, Costa Victoria is the first cruise ship from a major line to head to a scrapper in the wake of the coronavirus-caused cruising shutdown. But it is unlikely to be the last.
Costa Cruises is owned by cruise giant Carnival Corporation, which last week announced it had preliminary agreements to dispose of six of its vessels in the next 90 days as it cuts costs. The company said it also was working to remove additional ships from its fleet.
Carnival Corporation didn't name any of the ships that are on the way out, or the brands that operate them. But, clearly, Costa Victoria is one of the six.
In addition to Costa Cruises, Carnival Corporation is the parent company of eight more brands including its namesake Carnival Cruise Line, Princess Cruises, Holland America and Seabourn. The company operates about 100 ships in all.
Related: Carnival fans dealt blow as line cancels sailings into fall
In announcing that it would be removing ships from its fleet, Carnival Corporation didn't say whether they would be scrapped or sold to another line for continued service. But just days before the announcement, in an exclusive, hourlong interview with TPG, Carnival Corporation CEO Arnold Donald hinted that at least some of the ships were headed for dismantling.
"There will be an acceleration of retirement of ships, there's no question about that," Donald told TPG founder and CEO Brian Kelly. "I'd go so far as to say it's highly probable that you are going to see some ships actually scrapped as opposed to just moving to secondary or tertiary markets."
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The CEO of the world's third-largest cruise company, Norwegian Cruise Line Holdings, also recently told TPG that ship retirements in the industry were likely.
That a ship as young as Costa Victoria is heading to a scrapper is notable. It's a sign of the seriousness of the financial crisis at play in the cruise industry. In recent decades, cruise ships typically haven't been scrapped until they were much older.
Often, major cruise companies such as Carnival Corporation will sell a ship that is just 20 or 25 years old to a less prominent cruise company operating in a secondary market. The ship then will have a second life of many years before ultimately being scrapped.
Indeed, less prominent cruise brands such as U.K.-based Cruise & Maritime Voyages and Spain's Pullmantur have fleets that are full of older ships that once sailed for major lines such as Carnival, Holland America and Royal Caribbean. In normal times, these brands would be the logical outlet for ships that a big cruise company such as Carnival Corporation wanted to remove from its fleet. But these less prominent brands are having issues of their own during the coronavirus-caused cruise shutdown and aren't in a position to add to their fleets.
Just Monday, Pullmantur announced it was reorganizing under Spanish insolvency laws. The U.K.'s Maritime and Coastguard Agency recently detained five Cruise & Maritime Voyages vessels for issues such as late payment of wages to crew.
Costa Victoria was one of 23 cruise vessels that TPG listed earlier this week as the most likely to be laid-up, sold or scrapped in the coming months as a result of the coronavirus-caused cruise shutdown.
Related: 23 classic vessels that could be laid-up, sold or scrapped
The TPG list of ships that are most likely to disappear from various brands also included vessels from Carnival, Holland America, Royal Caribbean, Princess Cruises and several other lines.
Cruise companies across the world have been hit hard financially by the extended shutdown to cruising that began in March and appears unlikely to end anytime soon. While a handful of small cruise ships in Europe -- mostly river vessels -- have resumed sailings on a localized basis in recent days, many major cruise companies around the world now have canceled all or most sailings well into September or even October or November.
Costa Victoria debuted on July 28, 1996. It was one of the last ships in the Costa Cruises fleet that dated to the days before Carnival Corporation took a 50% stake in the company in 1997. Carnival Corporation has owned Costa Cruises outright since 2000.
Related: How to book a cruise with points and miles
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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