Carnival Sees Full Fleet Sailing by Spring, Later Than Hoped

A Costa Pacifica cruise ship, operated by Carnival Corp., docked at the port of Civitavecchia near Rome, Italy. (Photographer: Alessia Pierdomenico/Bloomberg)

Carnival Sees Full Fleet Sailing by Spring, Later Than Hoped

Carnival Corp. Chief Executive Officer Arnold Donald estimates that the company will have its entire fleet of 91 cruise ships operating by next spring, a bit later than it originally hoped.

The company has already announced return dates for 42 ships by the end of the company’s fiscal year, which concludes on Nov. 30, according to a quarterly business update on Thursday.

Like the rest of the industry, Carnival’s cruise operations have remained mostly shut down, with notable exceptions including Costa Cruises and AIDA Cruises-branded voyages in Europe. But North American cruises are expected to return in the coming weeks.

The Centers for Disease Control and Prevention has been cautious about allowing the industry to return after outbreaks earlier in the pandemic, but in the past couple months it has approved plans for many voyages under certain conditions. At the same time, Florida, home to the world’s largest cruise port, recently got an injunction, effective July 18, that prevents the CDC from enforcing its complex rules on cruise lines at Florida ports. The CDC has until July 2 to propose a narrower order.

The latest estimates on the timing of Carnival’s return suggest the company won’t meet its previous best-case scenario. On an April 7 conference call, Donald said he would like to have the full fleet going “by the end of this year, early next year,” but he portrayed that time frame as an “aspiration.”

Carnival shares slumped as much as 2.7% on Thursday, but they rebounded slightly off their lows, and were trading down about 1.3% as of midday New York time.

Return to Profit

Although restrictions are still in place due to the pandemic, the fleet should be sailing at capacity in the spring 2022 time frame, Donald said on the conference call.

Chief Financial Officer David Bernstein said the recovery will lay the groundwork for a return to profit before interest, taxes, depreciation and amortization shortly afterward.

“If we do get back in the spring of 2022, we have the full fleet back in operation, we’re able to get to more normal type occupancy levels, then we should have significant positive Ebitda, particularly in the summer months of 2022,” Bernstein said. “And we’ll go forward from there.”

The executives were careful to hedge anything that sounded like a forecast, noting that much depends on the trajectory of the pandemic.

“Things are moving in a positive direction,” Donald said. “It’s probably going to be a little choppy around the world.”

The company reported an adjusted net loss for the second quarter of $2.04 billion, near the low end of estimates compiled by Bloomberg, which ranged from $1.14 billion to $2.09 billion.

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