The CEO of the world’s largest cruise company, Carnival Corporation, on Friday (July 10) revealed that its 9 cruise brands would remove 13 ships from their fleets in 2020 to cut operational costs.
During a conference call with Wall Street analysts to discuss 2020-Q2 earnings, Carnival Corporation CEO Arnold Donald said that to reduce their monthly cash burn and have a more efficient fleet after resuming operations, they had "aggressively shed less efficient ships".
All 9 of the Carnival Corp's brands halted passenger shipping operations in mid-March due to the Coronavirus (COVID-19) pandemic. Most subsidiaries have cancelled all cruises through September and early-October.
A few weeks ago, the Corporation said in a regulatory filing that it would dispose of 6 ships within 90 days and perhaps more. Friday’s announcement more than doubles the number of vessels that will leave the brands of Carnival. The departure of 13 cruise liners at once is unprecedented in the history of the company. According to Donald, it would amount to about 9% capacity reduction at the combined brands.
Donald didn't specify which vessels would leave but several are already known. P&O Cruises UK announced earlier this week that MS Oceana (2016-passenger liner) had been sold. In June, Costa Cruises revealed that Costa Victoria (1928-passenger liner) had sailed its last voyage. Later was announced that the vessel was resold for scrapping at Piombino Italy.
The list also includes several vessels that Carnival had agreed to sell before the global crisis hit, including Pacific Aria (1260-passenger) and Pacific Dawn (1546-passenger) - both are still operated by P&O Australia. Arnold Donald suggested that the list of such older liners could include Costa neoRomantica and ms Maasdam (Holland America Line). The Corporation's fleet also leave Costa Atlantica and Costa Mediterranea - both being already sold to the joint-venture Carnival China (CSSC Carnival Cruise Shipping).
Asked whether the ships leaving the Corporation's fleets would be dismantled/scrapped or sold to companies that might reuse them. In addition to selling older vessels, Carnival would add newbuilds at a slower pace over 2021-2022. Carnival Corporation currently has 16 ships on order / under construction for its 9 brands, but they will be delivered later than originally planned. 9 of the liners had been scheduled for inaugurations by 2021-Q4, but Carnival would only take delivery of 5 ships by the end of 2021.
Donald added that no ship orders had been or would be cancelled. They would just be delayed, on average by 5 months. He suggested the company would rather keep the newbuilds and eliminate its older vessels in case it needs to reduce passenger capacity.
Earlier this week, CCL-Carnival Cruise Line announced that the debut of its largest ship ever - Mardi Gras - would be pushed back until February 2021. Also officially delayed is Princess Cruises' liner Enchanted Princess.
Donald said Carnival’s ship capacity would not return to the levels of early 2020 until 2022 at the earliest.