While they haven’t carried a single U.S. passenger since late March, the cruise industry remains afloat – burning cash at historic levels.
Preliminary earnings reports for the last quarter of 2020 show Carnival Corporation lost $ 2.2 billion in the fourth quarter, or roughly $ 500 million per month. And there is no end in sight to government-imposed limbo as Carnival and the rest of the cruise industry await further advice from the Centers for Disease Control and Prevention.
The agency issued a no-navigation order in March 2020, which prevented ships from leaving US ports. In October – when the number of Covid-19 cases was far lower than they are today – the CDC lifted the order, allowing cruise lines to prepare “trial trips” to assess the effectiveness of the new security measures.
But companies are still waiting to set sail. When asked about next steps with the agency, Carnival President and CEO Arnold Donald objected during this week’s earnings call, saying the return to sailing plan remains a “work in progress.” Classes”.
“Additional guidance for future phases has yet to be released by the CDC. We have weekly, or as often as needed, calls with them, so that remains to be seen, ”Donald said. “What I can tell you is that we are on the right track to be able to do whatever we need to do in a timely manner so that we can ultimately resume cruising.”
It was a decidedly different tone from his last income call in October, when he suggested its ships could be in the water by the end of 2020. Clearly, as the pandemic worsened in the United States, that prediction did not materialize. And unlike airlines, which have seen a slight increase in sales thanks to vacation travel, cruises cannot legally resume operations yet.
“The CDC said in order to issue additional technical instructions and commands, the advice needed to carry them out,” said a spokesperson for Cruise Lines International Association, the industry’s trade group. “They haven’t done it yet.”
The current hang-up? Port agreements.
These agreements create a plan for a ship’s next destination if it discovers a suspected Covid-19 case on board, assesses a port’s hospital and medical capacity, as well as the necessary precautions to minimize contact with people. not infected. The CDC is in the process of determining these guidelines.
“We have not heard from the CDC what their expectations are on what this port agreement would look like and what are the necessary elements to include in this port agreement,” said the spokesperson for CLIA.
According to a spokesperson for the CDC, the cruise lines are still in the testing and capacity building phase of the laboratories: “None have yet crossed this door. Regarding the agreements of the port and the local health authorities, a decision could be taken “probably in the coming weeks”.
“For both sides, the health and well-being of the cruiser passenger is the priority,” the spokesperson said.
Cruises have resumed elsewhere
The edicts of the CDC are only part of the equation. A global company like Carnival doesn’t just care about CDC recommendations, but regulations around the world as well. The company’s Costa and Aida brands are already operating, with limited capacity, in Europe.
“We want the freedom to operate,” said Donald.
For now, Carnival is touting its bookings in the second half of 2021, calling them “in the historic range”, and that the first half of 2022 sees bookings reaching “the high end of historic beaches”, particularly bundled packages the company emphasizes. Carnival traditionally does not share these reservation numbers.