Cruising and COVID-19: Carnival Corp, owner of Ruby Princess, to sell off 18 cruise ships amid bans

Carnival Corp - the parent company of nine cruise brands, including Princess, Costa, and Carnival - announced in a third-quarter earnings filing that it plans to sell 18 cruise ships in 2020, which amounts to 17 per cent of the company's ships.

The move comes amid a halt in cruising since March, when the lines stopped sailing the day before a no-sail order went into effect in the United States.

Carnival Corp has already sold eight older-model cruise ships. It has not disclosed which cruise lines the ships are from or to whom they are being sold. The company also will delay delivery of new scheduled for 2021 as a cost-saving measure.

Carnival Corp is the owner of Ruby Princess, which had a COVID-19 outbreak on board in March while based in Sydney, which was then linked to 900 cases around the country after health authorities allowed ill passengers to disembark.

"We are in the process of removing 18 ships from our global fleet with several ships already removed," said Carnival's chief communications officer, Roger Frizzell, in an email. "Given our pause in cruising, we recently moved up the timetable to remove our older, less efficient ships from our fleet. We have already sold several ships and we [are] currently in negotiations on others."

Carnival Corp lines account for 45 per cent of the world's cruise industry, according to the travel-focused site The Points Guy. Fifty-five passengers died of COVID-19, the illness caused by the novel coronavirus, on Carnival-operated ships during the early days of the pandemic, according to the US Centres for Disease Control and Prevention (CDC).

The CDC has implemented a ban through September and is expected to extend it, preventing cruise ships with a capacity of 250 passengers or more from operating in US waters. Carnival Corp chief executive Arnold Donald said in the filing that the sales "will generate a 12 per cent reduction in capacity and a structurally lower cost base, while retaining the most cash-generative assets in our portfolio."

The Australian government has banned international cruise ships since March, extending the ban twice, most recently from September 17 to December 17. 

Ships that are retired from cruising typically get sold to other lines, according to cruising website Cruise Critic - or they can be sent to junkyards for scrapping.


According to the Cruise Industry News website, ships to be sold include the ships Pacific Dawn and Pacific Aria, which usually sail Australian waters over summer. The ships were reportedly sold to UK-based Cruise and Maritime Voyages, which went into administration in July.

The company said it has raised $US12 billion ($A16 billion) since March, despite being out of operation, but had a net loss of $US2.9 billion for the third quarter of 2020. The $US12 billion was raised "through a series of financing transactions," including borrowed amounts and deferred debt repayments. Carnival is also offering stock sales to increase revenue.

"Currently, the company is unable to predict when the entire fleet will return to normal operations, and as a result, unable to provide an earnings forecast," the filing said. "The pause in guest operations continues to have a material negative impact on all aspects of the company's business, including the company's liquidity, financial position and results of operations."

The move comes as a return to cruising has begun in some parts of the world. Two Carnival brands have plans to restart or have already returned to operations outside the United States, according to the filing. Costa Cruises resumed sailings from Italy on Sept. 6, and Germany-based AIDA Cruises is preparing for departures in the fall.

The Washington Post

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