Scrumps

https://www.miamiherald.com/news/business/tourism-cruises/article242380421.html

The lawsuits are only just beginning. On Friday there were over 770 covid related filings. Some asking for class action status. Everything against cruise lines, airlines, gyms, retail stores.. It is going to be a blood bath in the courts over the next few years.

15 hours ago, mattylew said:

My wife and I booked a cruise with RC for June 21 on the Harmony of the Seas. With cruising being halted until Jun 11, does anyone know the likelihood of this cruise actually happening? 

I would give it a 98% chance of it not happening. I doubt the CDC is going to be allowing ships to dock and offload passengers anytime soon. Last I read, RCL & CCL can't even get their crews offloaded.  Getting fresh crews back on is going to be a nightmare.

On 4/27/2020 at 9:19 PM, RCIfan1912 said:

The idea that there has to be a vaccine for cruises to start is absurd. I don't know why people keep spreading that BS.

Cruising will likely start without a vaccine, the question will be, where can you cruise too?  If countries get this under control, do we really believe a port is going to open up and allow several thousand people to scatter across their country?  or the next port will be welcoming a ship that just left a country which has active covid cases?  Or that a US port will allow a ship to dock that just visited several countries that had active cases?   and what happens if a ship gets an active case of covid, will the US port allow it to dock as normal?

Personally, I adore cruising, but I will not cruise until I can be 100% sure I can get off the ship at the planned port on the expected day and not end up roaming the oceans looking for a port.

In a situation where cash is everything and survival = cash.. then I can't see them cruising if the result is a net loss.  Considering the logistics of getting a ship up and running, I very much doubt there will be any cruises until they are sure all is well.

I still don't know how cruising can start until ports open and remain open.. I have yet to hear anyone detail how it is possible as long as there are active cases of covid.

In a chapter 11 filing, all common stock becomes worthless and shareholders are wiped out. Generally, they reissue new shares later to the creditors.

Not sure if it was this video or another, but they looked at how much cash they have from customer deposits and future cruise fare. It was nearly 3 times what they normally have on hand in cash.  So if everyone asked for their money back, it would be like a run on the banks, they would run out of money very quickly.  RCL has a much lower burn rate than CCL.

My concern centers around how does cruising start.  What does that look like?

The US may open ports, but what if few others do?  
Will RC stop at ports where there are active covid cases?   and send thousands out on excursions?
A cruise coming from Miami for example will have thousands of people from all over the world, will ports really open up for all those people to get off the ship at the port?
If one person gets sick, will ports start closing to that ship?
If a cruise visits a country with active cases, will the US allow the ship back?
The crew is going to be coming from all over the world, you will need to test everyone of them or isolate them on board for 2 weeks before any passengers get on.

I just struggle to see how cruising is going to return anytime soon and what it looks like..  I still believe that the only way forward is reliable instant testing every time someone boards the ship. 

I was told that if you paid for part of a cancelled cruise with an FCC, you will get the original FCC back and dated to the original FCC issue.  We asked for a refund but told that the FCC we had applied will be coming back as the original FCC, not as a refund.  I have not received it yet so not sure what the date will be.  It can't be the original date since it would make it unusable.  

I have said a few times that this will be one of the ways that cruising could start up..  

Adjust for the delays it causes and test everyone, every time they go onto the ship.

7 hours ago, KWofPerth said:

This might be an unpopular opinion, but I don't see how cruising resumes before 2021, unfortunately. And even then, not until the latter end.

I think they will try, end up with a scare or outbreak and then that will set things back even more. That is why they need a comprehensive testing process in place before they start. If they can get to a point of mass instant testing, cruising can resume. If I was RC, that would be my number one goal right now. Working with some company to product such a test.

The other downside to cruising is I do not believe companies will relax the 2 week self isolation after returning from a cruise any time soon.. so your 7 day vacation is going to turn into using at least 15 days of PTO if you can't work from home. 

12 hours ago, KWofPerth said:

This does not make pleasant reading I'm afraid. There's a lot of animosity towards cruise lines out there, not totally unjustified.

https://www.abc.net.au/news/2020-04-13/coronavirus-spells-the-end-of-the-line-for-cruise-ships/12141140

This is why, although some cruises may start later this year, I believe my NZ cruise in January is not going to happen. I really can't see NZ opening up their ports for the 2020/21 season.

23 hours ago, DunkelBierJay said:

Judging by the effect on stock prices today, Wall Street doesn't seem concerned...RCL is priced about as high as it has been since all this started...my take is to remain calm and hopeful people will stop taking the CDC so seriously given how much their modeling has been off.

The stock market is just ridiculous at the moment. It is now only 13% down and yet the economy is shutdown, many companies have zero sales, thousands will go out of business, we will hit over 20 million unemployed by the end of the month, there is going to be credit and mortgage issues to come, companies will be posting quarterly results showing <20% of forecasts.. No one really understand what the market is going to do, but we all do know the economy is in the shitter right now.

If you have cash on hand and are patient, there is money to be made in the stock market at least. If you brought RCL under $30, I would sell as soon as possible. That stock will be going down again, as will the market.

The issue with the virus on cruise ships is similar to a plane crash with 100 dead vs 500 dead in car accidents or heart disease on the same day.

2 hours ago, YOLO said:

Based on this, I am now a bit more worried the Cruise Industry.  If each company is burning through about $1B per month, how many months can they withstand?   

CCL says until November under a zero sail.  After that they default on loans and start losing ships. I can't imagine someone is going to loan them money to pay a loan that would be the first to seize the ships in a default. What will likely happen is the Saudis group that purchased 8.2% of shares will purchase more at dirt prices to keep them afloat.  

I would guess they are not buying anything right now as I do not think they have any idea when they might sail again. They just took out a huge loan at 10 times the normal cost and put their ships up as collateral. One missed payment and they could end up losing ships. If they are anything like my company right now, they are not spending cash on anything they don't have to, even if it might save them money in the future. Just my opinion.

The key bit is the 1 billion a month. There was an article yesterday that based on zero cruises, CCL can last until November. The key question is, what happens if they have zero cruises through November.. borrow more?  It's not like there will be a market to sell ships for top dollar. 

One thing that might open cruising sooner is those instant test result kits.  I was watching a segment on what they did in Taiwan and how they were testing people as they got off the aircraft...   Since these tests can get results in 15 mins, imagine everyone checking in having to be tested, then having to wait the 15 minutes for the results before they are allowed to board. Do that for every port of call for everyone. Yes, delays things, but might be a temporary solution.  I am sure it will not be long before those tests are down to a minute or less.

If it is this difficult to get them home, imagine getting them back. I doubt Aus, USA etc are going to be allowing flights in anytime soon.

I personally do not see cruising taking off again much until a cure is found. It will take just 1 passenger coming down with covid on 1 ship to stall the entire industry.  Many countries will not be opening ports for a long time and any ship that does announce an inflection will be stuck at sea with governments and the public screaming how stupid people are for going back on a cruise ship.

We have a cruise to NZ in January and even though Delta has some great prices on flights to SYD, we are holding off because I just can't see AUS or NZ opening up until covid is cured.

Just my 2c.

Interesting tip-bit in the news this morning about "Saudi Arabia’s sovereign wealth fund recently took an 8.2% stake in the company."

Quote

 

Meanwhile, Carnival has enough liquidity to keep the company afloat through November under a “Zero Sail” scenario.

However, under a more optimistic scenario, which assumes that some sailings resume in the summer, the company’s prospects would improve—though profitability would still take a big hit this year. Under that scenario ,the company’s operating cash flow would fall to around minus $2.2 billion this fiscal year from $5.7 billion last year. The Wells Fargo analysts see it rebounding to about $1.4 billion next year.

 

Not sure if this has been posted about, but remember when cancelling cruises that you may have purchased travel insurance. Some places are allowing you to cancel the insurance and get a refund providing you can prove that RC cancelled the cruise and you have not made any claims on the policy.

Quote

 

Thank you for contacting Allianz Global Assistance regarding your travel insurance policy. 

For a temporary period, we are offering refunds for the cost of your travel protection plan to customers who wish to cancel their policy if the customer’s travel supplier canceled the customer’s trip due to COVID-19, so long as no payable claim has been filed under the plan. Please send us your request in writing, including any supporting documentation that your trip was cancelled. You may email the request and documentation to: [email protected] or mail to: Allianz Global Assistance, Sales Support Department, P.O. Box 72031, Richmond, VA 23255. You may also fax your request to 1-804-673-1598.

Please mark your correspondence, "Attention Sales Support," including your name and policy number. Please allow 7-10 business days for review.

 

3 hours ago, tonyfsu21 said:

Agree. The stigma attached to this will most likely bankrupt the cruise industry. With that being said in the unlikely event that RC declares bankruptcy what will happen to everyone’s money which is likely in the form of FCC right now? Personally we have $xx,xxx.xx tied up in FCC’s just awaiting the outlook over the next 2-3 months. 

That is why we decided to take the refund instead of the 125% FCC..  

3 minutes ago, Dimension said:

I am personally waiting on Carnival to report their earnings later this week before I decide if I want to jump in or not. CCL's ER will definitely tell us more on what is taking place.

Isn't that earnings for the time before all this started? up until end of Feb.. I think the next potential turning point for CCL will be if they can secure loans to get them through this.

1 hour ago, mook1525 said:

I bought them at $21  now I need to decide when to sell!

Now..  then buy them back when they drop back to $20.

2 hours ago, twangster said:

That's the problem with AA.  Try another airline.  

Which one?  Delta, Jetblue, United all do the same.