The cruise industry is currently showing little sign of recovery.
Carnival, the world's largest cruise line, lost US$2.2 billion in the fourth quarter of 2020, and its net loss for the year totalled US$10.2 billion due to the New Crown epidemic.
In its preliminary financial results for the quarter released on January 11, Carnival said it had an adjusted loss of US$1.9 billion for the fourth quarter ended November 30. The company had previously disclosed a net loss of US$8 billion for the nine months ended August 31.
And, for Carnival and its enthusiastic customers, there is little sign of recovery in the cruise industry at the moment. business for Carnival and its competitors came to a standstill in March 2020 due to the continued spread of the New Crown epidemic. In the time since, trying to secure loans and selling ships and stock has become the means by which the company has survived. Since March 2020, Carnival has raised a total of US$19 billion by issuing corporate bonds and ceding equity, and ended the year holding US$9.5 billion in cash.
On January 11, executives highlighted the positives and promised that they could still last another year of near-total business stagnation and that the company could still pull through.
At the earnings call, the company's chief financial officer, David Bernstein, said Carnival had "enough liquidity to sustain itself even with zero revenue for all of 2021." But his statement did not fully convince investors, and on the morning of January 11, Carnival shares fell about 4.1 per cent before recovering slightly. By midday, Carnival shares were down about 1.1 per cent.
Of course, Carnival did not want to see this happen. On a conference call on January 11, the company's CEO Arnold Donald told investors and analysts, "We are striving to have all of our cruise ships back in service by the end of this year." However, "the development of low-cost tests, the continued availability of new treatments and the speed of vaccine distribution under the epidemic will inevitably affect the speed of our recovery."
The government's expectations for the cruise industry will also impact us. in spring 2020, several cruise ships received media attention for being a source of superspread. While regulators have allowed Carnival to resume some European operations this fall, this will not be enough to offset the impact of the continued closure of North American operations. Carnival said it consumed as much as US$500 million per month in the fourth quarter ending November 30, 2020, and expects to increase its burn rate to US$600 million per month in the first quarter of this year.
At present, Carnival and its main competitors Royal Caribbean and Norwegian Cruise Line have both said they will not resume sailing around March this year, meaning that the industry as a whole will remain on ice for at least a year as a result of the epidemic. To resume operations in the U.S., cruise lines must meet certain conditions set by the U.S. Centers for Disease Control and Prevention, including a trial cruise with volunteers and a conditional sailing order at least 60 days prior to the start of the cruise. "On 11 January, Donald declined to give the voyage a chance.
On January 11, Donald declined to make a prediction as to when Carnival would begin trial voyages, which would require additional regulatory guidance. He said, "We meet the current regulatory conditions and can subsequently conduct the trial voyage, but to give a specific timeline, we would need additional guidance from the CDC."