The coronavirus pandemic has claimed its first cruise line
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The possibility of a cruise line becoming insolvent due to the cruise industry’s widespread, coronavirus-caused shutdown is no longer theoretical.
Spanish cruise operator Pullmantur Cruises, which is partly owned by Royal Caribbean Cruises, has filed for reorganization under Spanish insolvency laws, Royal Caribbean Cruises said Monday.
Royal Caribbean Cruises owns 49% of the three-ship company, which caters to Spanish speaking vacationers from Spain and Latin America.
“Despite the great progress the company made to achieve a turnaround in 2019 and its huge engagement and best efforts of its dedicated employees, the headwinds caused by the pandemic are too strong for Pullmantur to overcome without a reorganization,” Pullmantur’s board of directors said in a statement.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
In announcing the restructuring, Royal Caribbean Cruises said Pullmantur management notified employees of the decision after filings were made with Spanish authorities.
For now, Pullmantur has canceled all sailings through Nov. 15. Royal Caribbean Cruises said passengers booked on affected sailings would be offered the option to sail on ships operated by other Royal Caribbean Cruises brands.
Royal Caribbean Cruises is the parent company of its namesake Royal Caribbean brand as well as Celebrity Cruises and Azamara. It also is a part owner of German brand TUI Cruises through a joint venture.
While Pullmantur is little known to most Americans, its three ships are well-known to cruise fans. They include the former Celebrity Cruises ship Celebrity Horizon and former Royal Caribbean vessels Monarch of the Seas and Sovereign of the Seas. The ships have sailed for Pullmantur under the names Horizon, Monarch and Sovereign.
Pullmantur removed a fourth ship from its fleet, Zenith, in January. The vessel was the former Celebrity Zenith.
Royal Caribbean Cruises didn’t say whether Pullmantur would try to bring back all three of its ships as part of its reorganization. But the Cruise Law News blog is reporting that workers in Italy are in the process of stripping valuables off two of the vessels. The blog cited crew members.
A spokesperson for Royal Caribbean Cruises did not immediately respond to our questions about the report and the future of the vessels.
In its announcement of the Pullmantur reorganization, Royal Caribbean said Pullmantur’s ships currently are staffed with crew at a minimum maintenance level, and “the company will take care of their safe return home.”
Royal Caribbean Cruises said all its assets related to Pullmantur were included in a non-cash asset impairment charge reported in its first-quarter results. In part due to the write-down of Pullmantur assets, Royal Caribbean Cruises reported a $1.4 billion loss, or $6.91 per share, for the first quarter. That compares to a profit of $249.7 million, or $1.19 per share, during the same period a year earlier.
Royal Caribbean Cruises owns 49% of 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 days have suggested that a recent bond sale by Royal Caribbean Cruises should allow the company to remain solvent for well over a year even if cruising doesn’t resume.
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
Feature image of Pullmantur’s recently retired Zenith by Val Traveller/Adobe Stock
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,600
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
- 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.