It’s not unusual for a cruise line to get rid of an older ship as it upgrades the fleet with newer vessels. But to dispose of more than a dozen ships is definitely noteworthy.
Carnival Corporation — parent company of Carnival, Costa Cruises, Princess, Holland America, and other cruise lines — announced plans to remove 13 ships from its fleets in the near future.
In a business update the company released today, it also said that it expects eight of the ships to be removed from fleets in the next three months.
According to the statement:
“The company sold one ship during June 2020 and has agreements for the disposal of five ships and preliminary agreements for an additional three ships, all of which are expected to leave the fleet in the next 90 days. These agreements are in addition to the sale of four ships, which were announced prior to fiscal 2020. In total, the 13 ships expected to leave the fleet represent a nearly nine percent reduction in current capacity.”
At this time, there has been no mention of exactly which ships will be taken out of the fleet, nor which cruise lines they will be from.
While 13 ships isn’t a small number, with more than 100 ships across its many cruise lines, the total number of ships being removed is just a fraction of Carnival Corporation’s vessels. In other words, instead of a “fire sale” to raise funds and shrink the company in tough times, it appears Carnival is doing its best to simply become more efficient coming out of the crisis.
In fact, in a recent conference call, Carnival CEO Arnold Donald mentioned it was shedding “less efficient” vessels. And while he said he doesn’t expect the fleet to return to its capacity of early 2020 until 2022 at the earliest, when it does, it will have more efficient ships and a newer fleet.
In addition to removing these older, less-efficient ships from the fleets, Carnival is planning to still add new ships, but at a slower pace than it expected. Specifically, the company says it expects only five of the nine ships originally planned for delivery in fiscal 2020 or 2021 to be delivered before then end of fiscal 2021. The company also said that deliveries in 2022 and 2023 will be delayed.
If there is good news in this entire health crisis, not only should Carnival Corporation come out of it with a more efficient fleet, but there still seems to be strong demand for cruises despite the uncertainty in cruising.
“We’re very encouraged by the booking patterns right now,” Donald said. He also cited “substantial new bookings” and mentioned “pent-up demand.”
The company has also said that 2021 bookings are within historical ranges, although prices are down slightly.
Carnival plans to return with a staggered fashion, starting slow with a few ships, routes, and lower occupancy. For example, the company announced that AIDA — its Germany-based cruise line — will begin sailing in August with short “trips to nowhere” that won’t dock at any port.
On a conference call, company executives said it saw strong demand for the AIDA trips.
