Carnival Corporation has confirmed it is to remove 18 ships from its fleet but said bookings for the second half of 2021 are at the “higher end of historical booking curves” despite minimal advertising or marketing.
The company announced early in the pandemic that it would reduce its fleet size by six ships, before confirming in July that 13 would be removed.
In preliminary financial information on its third quarter results, it said 18 less-efficient ships had left or are expected to leave the fleet, equating to 12% of pre-shutdown capacity and 3% of operating income in 2019.
Carnival said its GAAP net lost for the quarter 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 said it expects to “further enhance future liquidity, opportunistically”. On Tuesday, it also announced that it was to sell up to $1 billion worth of shares to further strengthen its books.
Chief executive Arnold Donald hailed the forward booking figures and the resumption of sailing by Costa Cruises, in addition to the imminent return of Aida Cruises.
He 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% 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.”
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