Sat, May 18, 2024

How the Largest Cruise Company Plans to Stay Afloat

Cruise industry and ongoing crisis

Once-thriving cruise industry came to a standstill due to the coronavirus pandemic. Moreover, even the largest cruise company in the world has to deal with various problems.

According to the Carnival’s CEO, Arnold Donald customers are already booking for 2021. Hopefully, Donald said the cruise industry will get back along with the rest of the travel industry.

However, even the world’s largest cruise company is scrambling for cash. This month company stated it was raising about $6 billion by issuing a mix of debt and equity.

It won’t be easy for the cruise company to attract additional financing. Credit rating agencies S&P and Moodys’ continue to review the company for a downgrade. Moreover, credit rating agencies may downgrade the Carnival Corp. to junk status.

As a reminder, shares of Carnival gained more than 8% on Tuesday. Nevertheless, as of April 14, shares of the largest cruise company dropped more than 75% since January 1.

Cruise company Carnival Corp. and its operationsShares of Carnival Corp. and NYSE

It is important to mention that, Carnival Corp. is the largest cruise company in the world. However, even for the Carnival, the coronavirus is a major problem. Moreover, the coronavirus pandemic has roiled the travel industry across the globe.

Unfortunately, some of the cruise ships became outbreak sites. Furthermore, ports across the world have denied vessels entry, and some of the cruise ships spent days finding a port willing to accept their passengers and crews.

However, this is not the end of the story, travelers canceled trips and most companies in the world suspended operations. The cruise ship Diamond Princess that belongs to Carnival Corp spent some time at a Japanese port in one of the first major outbreaks outside of China.

Last week the Center for Disease Control and Prevention extended the “No Sail Order” originally issued on March 14 for up to 100 days. Carnival Corp is incorporated in Panama voluntarily extended its pause of operation.

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