‘We expect to sail sometime in 2020’
Norwegian Cruise Line hopes to resume sea trips this year, despite a global coronavirus pandemic that has rocked the industry.
CEO Frank Del Rio on Thursday told CNBC’s Jim Cramer that his cruise company is consulting with government officials and public health experts to ensure its fleet is safe for crew and passengers to board.
“We expect to sail sometime in 2020,” he said in a “Mad Money” interview. “It would be irresponsible for me to give you a specific date because we still have to gain clearance from the CDC and other government agencies, but we’re working hard shoulder-to-shoulder with them to develop an enhanced protocol of every kind you can think of.”
Apart from the Centers for Disease Control, former U.S. Food and Drug Administration Commissioner Scott Gottlieb is advising Norwegian on developing health safety measures.
Norwegian could resume cruise operations as soon as July 1, according to information a spokeswoman shared with The New York Times earlier this week. Rival Carnival Corp., who was highly scrutinized for its response to Covid-19 outbreaks on its ships going back to January, plans to resume services in August. Royal Caribbean has not indicated when it would relaunch.
Congress opened up an investigation into Carnival’s handling of the health crisis on its ships at sea after more than 1,500 people fell ill and dozens died from complications of the fast-spreading virus. An industry-wide “no sail” order from the U.S. is set to expire in July.
“[W]e believe that together we’ll be able to demonstrate to the CDC and other government officials that cruising is indeed safe and not all cruise lines are created equal,” Del Rio said looking to separate his company from Carnival’s woes. “We had a stellar performance when the outbreak first came out.”
The comments came in the same week that Norwegian sounded the alarm about its solvency and subsequently announced that it raised $2 billion in a mix of stock and debt, which the company said gave it enough liquidity to weather at least 18 months of no revenues. Cruise operations have been halted, due to the deadly Covid-19 outbreak that has now infected 3.8 million worldwide, according to data from Johns Hopkins University.
The liquidity gave Norwegian the “encouragement and confidence to go forward,” Del Rio said. The company also reports positive booking data.
“We’ve got the youngest fleet in the marketplace. Customers are still booking,” he explained. “It’s hard to believe … but today we are only slightly below in load factors compared to where we were at this time last year for … 2021 sailings. So our loyal guests are still behind us, pricing remains strong and it’s a question of how soon we can get back to doing what we do best.”
Shares of Norwegian jumped nearly 8% to $12 during the session. The stock remains almost 80% in the red from the start of the trading year.