In its latest corporate filing, cruise giant Carnival Corporation has revealed that it will be removing 18 ships from its fleet.
The parent company of P&O Cruises UK and Australia, Princess, Costa, Cunard, Holland America Line, Seabourn and AIDA had already announced that it would be reducing its fleet size by six ships shortly after the outbreak of coronavirus (Covid-19). Carnival followed this up in July by confirming that 13 ships would be removed.
The preliminary financial information for the cruise company’s third quarter outlined how 18 less-efficient ships had left or are expected to leave the fleet, equating to 12 per cent of pre-shutdown capacity and 3 per cent of operating income in 2019.
Carnival Corporation revealed its GAAP net loss for the third quarter of 2020 was $2.9 billion, adjusted to $1.7 billion, and said average monthly cash burn was $770 million, in line with previous projections.
The company has $8.2 billion of cash and cash equivalents and “expects to further enhance future liquidity, opportunistically”.
In a statement, Carnival Corporation chief executive Arnold Donald praised Costa Cruises’ successful resumption of cruise operations this September and the cumulative advanced bookings for the second half of 2021, with “capacity currently available for sale” being at the “higher end of the historical range, despite minimal advertising or marketing”.
Donald said: “Our business relies solely on leisure travel which we believe has historically proven to be far more resilient than business travel and cannot be easily replaced with video conferencing and other means of technology. Our portfolio includes many regional brands which clearly position us well for a staggered return to service in the current environment.
“We continue to take aggressive action to emerge a leaner more efficient company. We are accelerating the exit of 18 less efficient ships from our fleet. This will generate a 12 per cent reduction in capacity and a structurally lower cost base, while retaining the most cash generative assets in our portfolio.”
He added: “With two-thirds of our guests repeat cruisers each year, we believe the reduction in capacity leaves us well-positioned to take advantage of the proven resiliency of, and the pent up demand for cruise travel – as evidenced by our being at the higher end of historical booking curves for the second half of 2021.
“We will emerge with a more efficient fleet, with a stretched out newbuild order book and having paused new ship orders, leaving us with no deliveries in 2024 and only one delivery in 2025, allowing us to pay down debt and create increasing value for our shareholders.”
Visit carnivalcorp.com for more information.