Carnival Corp. (NYSE: CCL) reported a preliminary quarterly loss of $4.4 billion (£3.6 billion). With the COVID-19 pandemic idling ships, the cruise operator warned that it could breach a loan agreement in a prolonged sailing pause.
Revenues dropped to $700 million from $4.8 billion for the March-May period in 2019. The drop is attributed to bookings drying up and the corporation’s cruise lines suspending sailings after severe outbreaks onboard its ships.
Even though many lines have said they would pause operations until autumn, Carnival hopes some business will resume from late summer. The operator has $475 million banked in bookings for 2020 sailings.
With restrictions imposed by governments, Carnival has around 21,000 employees still on its ships. However, it expected to return most of them home by the end of June.
The company warned of facing ongoing operating and administrative costs to the tune of $250 million per month once all its ships are in paused status. Moreover, only 61 of more than 100 ships in the fleet have so far managed to reach the harbour.
The group stated its plans to sell six cruise ships, which typically cost between $500 million and $1 billion, as it seeks to adjust to an uncertain future. Carnival reiterated that it could not predict when business would resume. However, it expected to resume guest operations, in a phased manner. It added the business would resume after collaboration with both government and health authorities, with specific ships and brands returning to service over time.
The group said it had raised more than $6.6 billion this year in bonds and share issues to boost its liquidity. The cruise operator, which had to repatriate passengers at a massive cost, faces lawsuits from passengers on coronavirus-hit ships.
In light of the industry’s struggles, the British cruise line company Cruise and Maritime Voyages said, recently, that it was in emergency discussions with prospective investors and lenders after a potential loan deal collapsed.