Carnival CEO Says U.S. Cruises Could Happen in 2020, But ‘It’s Early’

(Bloomberg) -- Carnival Corp. could resume U.S. cruises this year, but Chief Executive Officer Arnold Donald said it’s too early to make a determination with public-health restrictions still in place.

Speaking in a radio and TV interview with Bloomberg’s Carol Massar, Donald noted that many parts of the U.S. are experiencing significant spread of Covid-19 and have major public-health restrictions.

“As long as we’re not just comfortably socially gathering, then we shouldn’t be talking about cruise,” Donald said Monday.

Since the pandemic started, Carnival has raised about $12 billion to withstand months without customers, while maintaining ships and preparing for an eventual return to the seas. The company plans to start sailing in a limited capacity with ships leaving from Germany and Italy next month.

Donald sees “a lot of pent-up demand” among customers eager to cruise again.

Separately, Carnival said in a filing late Monday that it’s investigating an Aug. 15 ransomware attack that accessed and encrypted part of one brand’s information-technology systems. The company said the incursion gained unauthorized access to personal data of guests and employees, which may result in potential claims. It doesn’t expect the incident to have a material impact on financial results.

The shares fell as much as 4.6% in early London trading on Tuesday.

Learning Curve

The cruise industry shut down on March 13 after a series of Covid-19 outbreaks at sea. Carnival, the industry giant, has had the most known cases and fatalities, dating back to the Diamond Princess off Yokohama, Japan, in February.

Even healthy passengers have suffered, as many ports turned ships away for fear of seeding new shore-side outbreaks. Tens of thousands of crew members were trapped on vessels for months.

Donald said the world and the industry have learned a lot over the intervening months, and that operators would no longer put passengers in a position where they could find themselves trapped.

Cruises will incorporate mask wearing and some physical distancing, but beyond that there are a “plethora of possibilities,” Donald said. “It depends on the destination” and other factors, he said, adding it’s especially “premature” to outline a strategy for the U.S.

The Centers for Disease Control and Prevention -- which has issued a “no-sail” order -- hasn’t yet given clear guidance on how cruise lines could return to U.S. waters, Donald said. Cruise Lines International Association -- a group representing the industry’s biggest companies, including Carnival and Royal Caribbean Cruises Ltd. -- has suspended U.S. operations until at least the end of October. The CDC’s no-sail order is in effect through September.

Carnival’s German line Aida and its Italian Costa fleet will restart in those two countries. But that revenue won’t come close to offsetting the massive costs of fleet upkeep and other operational expenses.

Riskier Environment

In its recent extension of the no-sail order, the CDC said cruise ships are riskier for Covid-19 transmission than other settings, citing current scientific evidence.

The agency specifically cited a study in the Journal of Travel Medicine that showed the basic reproduction rate for Covid-19 on Carnival’s Diamond Princess was quadruple the rate in Wuhan, China, early in the pandemic.

Asked if he would change how he handled the pandemic, Donald said the company has complied with world regulatory bodies.

“You can only operate in the time that you’re in with the information you have,” he said.

©2020 Bloomberg L.P.