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Does anyone have any insight into wether it would be feasible for the cruise lines to run their ships at less than full capacity? I've heard a lot about how Royal posted 5 billion in profits in 2019. If this is accurate it would seem to this peon that there would be room in the budget to have ships running at less than capacity and still making money.

It would seem to me that this would be the only option to having cruises resume before a vaccination is in place as social distancing (I hate this term, it makes no sense. Its physical distancing!) is pretty much impossible on a cruise ship at capacity. I wonder what the capacity level would have to be to at least break even to make it worthwhile running the ships.

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1 hour ago, Vancity Cruiser said:

Does anyone have any insight into wether it would be feasible for the cruise lines to run their ships at less than full capacity? I've heard a lot about how Royal posted 5 billion in profits in 2019. If this is accurate it would seem to this peon that there would be room in the budget to have ships running at less than capacity and still making money.

It would seem to me that this would be the only option to having cruises resume before a vaccination is in place as social distancing (I hate this term, it makes no sense. Its physical distancing!) is pretty much impossible on a cruise ship at capacity. I wonder what the capacity level would have to be to at least break even to make it worthwhile running the ships.

That is a good ops research question that Royal and other cruise lines are probably addressing.  I do believe an "expert" blog member reported some cost/revenue data on another thread.  The ships vary in staffing requirements, fuel requirements, and operating costs.  There are certain sunk costs in maintaining the fleet -- costs Royal will incur without cruises.  So the issue is whether the marginal increase in revenue (from a partially full ship) will exceed the marginal cost increases in conducting a particular cruise.   (Royal probably won't cruise if losses increase except to make a public relations statement.) Again, a great question....

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I doubt they could make a profit on half-filled cruises at typical price points.  That suggests either large price increases or running cruises at a loss.  While the latter seems unlikely in the long term, consider that right now their revenue is $0.  They might be willing to run cruises at a loss for a while to start generating some revenue and to show that the improved safety protocols (whatever they are) work.  

The absolute worst thing that could happen is for a cruiseline to start sailing again and then have a COVID-19 outbreak on a cruise.  I don't think the industry could survive the press in that scenario--it would be the end of the industry IMO. 

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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.

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I'm guessing the answer on some level is "yes its possible" ...

Lower guest count, lower staff count, still going to be less profitable because the staff reduction doesnt offset the revenue reduction.

Probably higher prices regardless to try and offset some lost profit.

Big thing will probably be whether they can get concessions on the financing costs of the ships ... do banks want to foreclose on ships that no one else is going to pay for or accept longer payouts/lower profits in order to get something over time rather than owning a bunch of cruise ships.

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Royal has so many older ships in the fleet that I am sure are paid off by now; it's possible they can sail at half capacity to recoup most of the operating costs, and the extra goes to the ships they are still paying for.  I have to believe that sailing at half capacity, while still may be a loss for some ships, will be a smaller loss than not sailing at all?  

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Decades ago airplanes regularly did not fly full   You would often have an empty seat next to you or even an empty row   They were profitable but at some point they realized they could have more   By adjusting routes, aircraft type and making other changes they discovered they could increase revenue and make more money   Once they tasted that success it was hard to go back to old ways with some empty seats.

Can they run ships at lower guest counts?   Sure.  They already do.  The Allure transatlantic had 4,500 guests for example.  The sailing wasn't as profitable as other cruises but did it operate at a loss?

That leads to the question no one here can answer   What is the guest count threshold  between operating at a loss vs. earning a profit? 
 

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1 hour ago, twangster said:

Decades ago airplanes regularly did not fly full   You would often have an empty seat next to you or even an empty row   They were profitable but at some point they realized they could have more   By adjusting routes, aircraft type and making other changes they discovered they could increase revenue and make more money   Once they tasted that success it was hard to go back to old ways with some empty seats.

It was actually the Airline Deregulation Act of 1978 that changed the industry dramatically -- before that the airlines could actually make a profit while flying with empty seats. Prior to the Act, airlines were treated as a public utility. With the removal of federal rules and introduction of the free market concept, both prices AND service went down 😉 

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On 4/25/2020 at 7:08 PM, KathyC said:

Royal has so many older ships in the fleet that I am sure are paid off by now; it's possible they can sail at half capacity to recoup most of the operating costs, and the extra goes to the ships they are still paying for.  I have to believe that sailing at half capacity, while still may be a loss for some ships, will be a smaller loss than not sailing at all?  

Using the Voyager Class as the marker between newer and older ships, RCCL has 15 newer ships plus the Odyssey and Spectrum and 11 older ships with the Legend and Grandeur being subtracted soon if not already.  Their fleet is much newer than Carnival's which has about 7 newer ships and about 19 older.  The Fantasy Class is in need of retirement and the Spirit Class only slightly behind it.  RCCL and Carnival are the extremes of the major lines with all the others falling in between.

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21 hours ago, RCVoyager said:

Using the Voyager Class as the marker between newer and older ships, RCCL has 15 newer ships plus the Odyssey and Spectrum and 11 older ships with the Legend and Grandeur being subtracted soon if not already.  Their fleet is much newer than Carnival's which has about 7 newer ships and about 19 older.  The Fantasy Class is in need of retirement and the Spirit Class only slightly behind it.  RCCL and Carnival are the extremes of the major lines with all the others falling in between.

Legend?  She's been long gone!! LOL 

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