Carnival Provides Insight On Company’s Future

cozumel mexico cruise ships multiple

Contents Show

Carnival Corporation (CCL), the world’s largest cruise company, provided a financial update on Friday morning to its shareholders.

The company said that they have $7.9 billion dollars on hand as of July 31, 2020.

Costa Fortuna Panoramic View on Nagasaki Port
(Photo via Carnival Corporation)

Previously, the company disclosed that they are spending approximately $650 million per month to keep the company operational during the suspension of cruising, that number is down from $1 billion when the company first suspended operations globally.

In the past few months, the company has taken numerous steps to add liquidity, including issuing bonds, selling over a dozen cruise ships, issuing common stock, and laying off both shoreside employees and onboard crew.

When the current health crisis is behind them, the company’s intent is to implement a measured return while continuing to work to keep overhead as low as possible.

READ MORE: Carnival Fantasy Beached, Officially Done [VIDEO]

“We will be leaner,” Carnival Corporation CEO Arnold Donald told Cruise Radio in a recent interview. “There is no question about it. And we’ll be stronger.”

Even burning through $650 million per month, the company’s current liquidity gives it the ability to continue operating, with little-to-no incoming revenue, for a year.

READ MORE: Carnival Corp. Shows $4B Loss in Q2

But if everything goes according to plan, the company hopes to begin generating cash flow via two of its European brands, Costa Cruise and AIDA.

Although the second quarter saw Carnival Corporation’s entire fleet continuing to be benched, two of the company’s brands are planning to resume service next month. This should ultimately impact Carnival’s bottom line in the third quarter and moving forward.

LAST LOOK: Remembering Carnival Fantasy

Currently, the plan is for Costa Cruises to begin sailing limited itineraries beginning on September 6, 2020. Although the original itinerary saw the ship calling on Valletta, Malta the plans have now changed.

Instead, the ship will do a domestic voyage, operating within Italy. These sailings will also only be open to Italian citizens.

German-brand AIDA Cruises has received final approval from its flag state of Italy. The first sailings from Keil, Germany will start on September 6, followed by sailings from Hamburg on September 12.

Currently, all ships in North America remain under a no-sail order from the Centers for Disease Control and Prevention until September 30, 2020.

Several of the lines sailing under the Carnival Corporate umbrella have extended their suspensions well beyond that date.

For example, Holland America Line recently announced it would not return to service until mid-December of 2020, while P&O Cruises suspended sailings through mid-November.

Despite these developments, Carnival has repeatedly said that sales are relatively strong for 2021, indicating that there is a pent-up desire among cruise fans to return to the seas.

Share this post