| Another five Carnival Corp ships to go

CARNIVAL Corporation has released a financial update for the three months to 31 Aug, confirming that a total of 18 “less efficient ships” have left or are expected to leave the fleet – five more than had been previously announced (CW 13 Jul).

The company said the vessel divestments represent about 12% of pre-COVID-19 capacity, but just 3% of its 2019 operating income.

CEO Arnold Donald said “we continue to take aggressive action to emerge a leaner, more efficient company,” with the smaller fleet also leading to a “structurally lower cost base while retaining the most cash generative assets in our portfolio”.

“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.”

Donald said Carnival would emerge from the pandemic with a more efficient fleet, along with a stretched-out newbuild order book which has been paused, with no deliveries scheduled for 2024 and only one in 2025, allowing the company to pay down debt.

Carnival did not provide details of which ships would be leaving the fleet, with previously revealed sales and scrappings include ships from various Carnival brands such as Carnival Cruise Line, Costa, Holland America and P&O Cruises UK.

The update also confirmed the ongoing impact of COVID-19, with Carnival reporting a quarterly net loss of US$1.7b.

Donald highlighted the recent resumption of Costa in Italy, with the company’s German brand AIDA Cruises also set to restart in the coming weeks.

“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,” the Carnival Corp chief said.

“Our portfolio includes many regional brands which clearly position us well for a staggered return to service in the current environment,” he added.

Cumulative advance bookings are at the “higher end of the historical range,” with Donald saying Carnival believes this demonstrates the long-term potential for cruising, with the company continuing to take bookings for both 2021 and 2022.

Carnival has also overnight filed an “at market” equity offering seeking to raise up to US$1 billion from investors.