tidecat

This is going to get messy for those scheduled to call at Cozumel, Costa Maya, and Progresso around July 4-5.

Any new debt for ship construction would stretch well into next decade. This debt also tends to be cheaper since the ship being built is the collateral and tends to have government support. That would only be $3-$5 billion in additional debt in the case of each company. Getting other debt paid down will free up cash for the interest and principal payments on the newer debt. If Royal takes out $3 billion per year in debt, that's about $180 million per year in interest savings, and if they do that three years in a row you're looking at over a half billion dollars. Carnival might actually see a slightly greater boost to the bottom line as a lot of their debt is between 7% and 8%.

Their additional capacity actually for 2025-28 isn't going to be that much more than Carnival Corporation's. RCI is adding about 17,800 lower berths (Star, Icon 3, Oasis 7) and Celebrity is adding 3,200 (Xcel) for a total of about 21,000. Carnival Cruise Line is adding about 10,700 (Excel 4, Excel 5) and Princess is adding 4,300 (Star) for a total of 15,000. Both companies could justifiably retire some ships if demand softens.

Just looking at the past performance without any context can be misleading. No other industry was hit as hard by governments response to the pandemic. Now if you think there's a reasonable chance of that happening again, then yes you would be better off investing in a broad based index fund. The stock was also trading at irrationally high prices before sailings had even resumed - including a nice bump when the vaccine was announced - that also makes comparison wonky. Also, $29 billion of Carnival's remaining $32 billion in debt is priced below 10% - some of it as low as 1%. The next 36 months are still critical to righting the balance sheet - but if profitability returns to or exceeds 2019 levels, it would not be unreasonable to see $4-$5 billion of debt paid down each year. Whether you feel that will result in a higher returns for $CCL than the market as a whole is the decision you have to make. No one talks about Royal Caribbean's debt, but their debut burden for the last three quarters of 2024 and all of 2025-26 is pretty similar to Carnival's ($7.3 billion for Carnival vs. $7.0 billion for Royal). Royal had EBDA (not EBITDA - interest and taxes use cash) of over $3 billion for 2023 so I'm not worried about them paying it off, but Royal probably isn't going to have as many opportunities to pay ahead like Carnival should.

Repayment of debt does not reduce reported profit. The company has not been profitable until recently due to a combination of not being able to sail at full capacity everywhere until 2023 and elevated interest on the debt it took on during the pandemic. The benefit of paying debt off early is to reduce interest expense in future periods, which frees up cash and raises profit. Based on one of the loan agreements in the 10-Q, there doesn't appear to be a way to legally pay a dividend before August 2027 unless if the company is rated investment grade by the major credit rating agencies. Even if the rating threshold is met before then, that is going to fall in the heaviest part of the maturities in 2027-28.

It's actually the data that is the killer, as that is typically priced per megabyte, and you can go through hundreds if not thousands of megabytes in a matter of days. Many plans now are unlimited talk and/or text for a flat fee, but obviously check with your carrier as their international plans will differ.

It's actually not so much the extra cash out for a dividend - even for a $0.50 dividend that would only be about $250 million - it's the dilution is a terrible drag on earnings per share. Carnival would have to make close to $5 billion in profit just to get to $4.00 in per share earnings. In 2019 that would have required less than $3 billion in profit. Given that the interest on the additional debt is a $1.5 billion noose, Carnival really needs to be capable of making $6-$7 billion before interest expense to get to $4.00 in EPS. There is also $5 billion remaining in debt due in FY 2027, and more than $8 billion remaining due in FY 2028. After that the maturities decrease, although FY 2029 is still pretty heavy with at least $3.1 billion in maturities. The $2.03 billion due in May 2028 at 10.4% interest really needs to be paid off in 2025 or 2026. There's also $1 billion due in 2030 at 10.5% interest sitting out there, although don't see a realistic path to pay it off before 2029 given how much is due in 2027 and 2028. I don't see a dividend before 2030.

I'm not sure how many debt covenants are still in effect that prohibit Carnival from issuing a dividend. I don't know if it makes sense to be carrying debt at higher interest rates and paying a dividend. Carnival was operating with about $18 billion in debt at the end of FY 2019, and net interest expense was only about $200 million; interest expense was just over $2 billion (ten times as much) for FY 2023.

One of the analysts on the recent earnings call used Seabourn as an example. That would be more likely than a mainstream brand like Carnival or Costa. The high cost structure of river cruising is easier to deal with when selling it as a luxury product. If Carnival Corp ever decides to enter that space, it could also just create a new brand. Purchasing an existing line could also be an option.

Some phone carriers offer plans that allow you to use your phone while at Sea and/or onshore while outside the US. If you do not purchase such a plan, not putting your phone in airplane mode can be very expensive.

This would be an example of an intercompany item. It may be treated as revenue for the cruise line, but it is an expense (cost of sales) for the casino department. Those would get eliminated at the corporate level as they offset each other.

If she was actually planning legal action, an attorney would be telling her not to discuss this on social media.

If they are going to to the trouble of applying for a passport, get both the book and the card. The cost difference is minimal. They are good for ten years. The card is fine for travel by ship, however it is not permissible for international flights in or out of the US. This could be an issue if there was some disruption to the cruise.

Pacific Adventure has had to cancel some calls to New Zealand due to the country's strict antifouling requirements: https://www.cruisehive.com/cruise-ship-denied-entry-to-new-zealand-passengers-face-itinerary-change/116551

It was actually Carnival Panorama that was supposed to be for P&O Australia. Carnival Splendor was originally ordered as a sister to Costa Concordia.

So why didn't Carnival do this during the shutdown? It would have been seen as perfectly justifiable to consolidate brands as a cost savings measure. Both Adventure and Encounter had renovations as part of their conversion from Princess. Pacific Explorer probably sticks around longer had she become Carnival Explorer.

I know it's been a while, but the entire FunShip 2.0 program was designed to be completed during a two week drydock. If any changes are going happen to staterooms, there may be some rooms that are taken out of service while the ship is still sailing. Carnival did this with the Triumph and Victory before they became Sunrise and Radiance.

Industry wide, demand for cruises is higher than it has ever been, even in spite of all of the new capacity that has been added since cruises resumed. You might be able to get some last minute deals out of Florida, as ports in the Northeast and Mid-Atlantic historically have tended to command higher prices. People are willing to pay more for the convenience of not flying.

At this far out there may not be a buyer, not even a scrapyard. There is still lots of time to execute the sale. I would not be surprised if Ambassador winds up with Explorer, given they have the former Pacific Dawn (Ambience) and Costa neoRiviera (Ambition). I'd also keep an eye on Margaritaville at Sea, who is probably itching to get rid of Paradise (formerly Costa neoClassica). Fred. Olsen could be in play as well if they are looking either to expand or to replace the 1988-built Balmoral (former Crown Odyssey/Norwegian Crown).

The removal of Pacific Explorer will affect a number of homeports: Auckland, Adelaide, Fremantle, and Melbourne. It will be interesting to see if Carnival uses Adventure or Encounter to serve any of those homeports. Luminosa could also be on the move since Encounter sails for Brisbane year-round.

It would be easier to do this with P&O UK as it serves an English-speaking market. It also would keep them from being confused with P&O Ferries (which was a source of some irritation when Ferries ran afoul of British labor laws). Doing this with AIDA and Costa may be more cumbersome because of the language and cultural differences.

Since Carnival is getting Pacific Adventure and Pacific Encounter in 2025, what do you think the ships be named? The path of least resistance would be simply to rename them to Carnival Adventure and Carnival Encounter, but having the shore excursions branded as "Carnival Adventures" is highly problematic. Reusing old ship names may not work here either given that the two Excel class ships scheduled for 2027-2028 will likely pull form the remaining of Carnival's original seven ships (Carnivale, Festivale, Tropicale, Holiday). The Fantasy class will also presumably still exist, but could some of Elation's and Paradise's late sisters be fair game? Ecstasy would probably be out as she briefly returned to service post-shutdown. Fantasy would be out because the class is still in use. Fascination, Sensation, Imagination, and Inspiration might work here. I don't think Destiny, Triumph, or Victory would work here for varying reasons. I also think that Carnival could add a third Fun Italian style ship by renaming Pacific Adventure to Carnival Grandiosa and theming it to Rome. This also serves as a nod to the ship having been built as part of the Grand class. If Grandiosa is problematic from a marketing standpoint, Carnival Vicenza could work here as a nod to the ship having been the Golden Princess, and any theming could be to the Vicenza region. Luminosa could also join the Italian-style fun by being themed to Ostuni, the less famous "City of Light" in Italy, since Venice is already spoken for in the fleet - or you could just copy the Venetian theming on Venezia since few will be likely to sail both Venezia and Luminosa. For Pacific Explorer I'd be more inclined to roll with Carnival Explorer. The Star name will be getting quite the workout in 2025 with both Star Princess and Star of the Seas so Carnival Star likely isn't an option. If you want an outright new name, maybe something like Carnival Solaris? This might also be time to use Carnival Brilliance, which presumably would have been the new name for Costa Magica had she joined the Carnival fleet.

I question whether there's much more left on the table in the US market given that operators are offering discounts this summer given the ongoing issues in the Red Sea: https://finance.yahoo.com/news/cruise-operators-offer-summer-discounts-051026361.html I think this move may be more about cost savings, especially since most of the cruising public in AU/NZ will be aware of the Carnival/P&O relationship. Now Carnival only has to run one advertising campaign in the market, consolidate customer service departments, etc. Both Carnival and Royal Caribbean should be at 31 ships by 2028. Carnival might actually be the largest cruise line in the world again, at least intermittently over the next 4.5 years.

PINs can be compromised too as people tend to use things like birthdates. Requiring two-factor authentication would also be a huge deterrent to something like this happening.

I understand the fee based on the size of the ship fee being divvied up based on an estimated number of passengers, but that doesn't explain the comment from @BlerkOne about port taxes increasing when a fare is being repriced ahead of the actual sailing date.