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14 January, 2021

Carnival to ditch 19 ships, as company posts $2.8 billion quarterly loss

Carnival Corporation has added another ship to the pile of vessels that it will offload in order to stay afloat beyond the COVID-19 pandemic.

Having announced in September that it would ditch 18 vessels, the company now expects to dispose of 19 ships, 15 of which have already left the fleet.

In total, the 19 ships represent approximately 13 per cent of Carnival’s pre-pause capacity and three per cent of operating income in 2019.

Carnival said the sale of “less-efficient” ships will result in future operating expense efficiencies of approximately two per cent per available lower berth day (ALBD) and a reduction in fuel consumption of approximately one per cent per ALBD.

The company recently took delivery of two ships and expects only one more ship to be delivered in the 2021 fiscal year, compared to five vessels that were originally scheduled for delivery.

Based on the actions taken to date and the scheduled newbuild deliveries through 2022, Carnival said its fleet will be more efficient, with a roughly 14 per cent larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each case as compared to 2019.

The company expects future capacity to be moderated by the phased re-entry of its ships, the removal of capacity from its fleet and delays in new ship deliveries.

Carnival’s fleet update came as part of its performance reveal for the final quarter of 2020, with the group posting a US$2.2 billion ($2.8 billion) net loss during the three-month period.

President and CEO Arnold Donald said 2020 proved to be “a true testament” to the company’s resilience.

“We took aggressive actions to implement and optimise a complete pause in our guest cruise operations across all brands globally, and developed protocols to begin our staggered resumption, first in Italy for our Costa brand, then followed by Germany for our AIDA brand,” he explained.

“We are now working diligently towards resuming operations in Asia, Australia, the UK, and the US over the course of 2021.

“With the aggressive actions we have taken, managing the balance sheet and reducing capacity, we are well-positioned to capitalise on pent-up demand and to emerge a leaner, more efficient company, reinforcing our industry-leading position.”

Earlier this month, Carnival Cruise Line announced its latest round of sailings from Sydney, featuring 56 cruises on offer from July 2022 through to June 2023.

Carnival Splendor will be making over 130 port calls to 17 destinations across Australia, New Zealand, New Caledonia, Vanuatu, and Fiji, including calls to Queensland, Tasmania and Victoria.

Carnival Cruise Line’s vice president and general manager for Australia, Jennifer Vandekreeke, said the cruise line’s newest and largest ship homeported year-round in Australia, will offer more opportunities to explore the country by sea than ever before.

“We have refined our sailing schedule to provide more visits to the stunning Australian destinations our guests love, with twice as many visits to the Great Barrier Reef and Tasmania, and 25 per cent more cruises to Moreton Island,” she said.

“We have also increased our New Zealand trips by 50 per cent. Guests sailing from Sydney on Carnival will have more options than ever to discover our beautiful country.”

Featured image source: Costa Cruises

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