Carnival CEO On bailout

[john91498]

Now that Carnival knows that they are not going to get any stimulus money, they are asking for $7 billion in loans:

 

https://finance.yahoo.com/news/carnival-seeks-7-billion-debt-173429187.html

[LaRue1975]

20 minutes ago, Liljo22 said:

The whole market is tanking.  Travel companies are tanking a little more but as a whole everyone is taking.  

The CEO of United said the stimulus money is not enough and they are still laying off workers, I think that is when the sell off started. 

[Thebosn1]

1 hour ago, Chief Vette said:

So why is the stock price tanking?

It already tanked.  They screwed up the Mardi Gras delivery, they had other cruise ships with the virus and they stopped sailing.  There are going to be virtually no dividends for like 2 years.  I bought the stock anyway, when it was at $13, but I never would have guessed they would be talking about blowing off a whole year of sailings.  I'm as loyal as they come, but they can't do that unless ALL lines do it.  If another line starts sailing sooner, and Carnival just cancels millions of people's cruises, I'm finally going to have to be done with them. 

[jimbo5544]

1 hour ago, john91498 said:

Now that Carnival knows that they are not going to get any stimulus money, they are asking for $7 billion in loans:

 

https://finance.yahoo.com/news/carnival-seeks-7-billion-debt-173429187.html

Did they ask for 7, or 3 to 7?  What’s 4 billion between friends....😎  

Edited March 27, 2020 by jimbo5544

[tidecat]

I believe the $3 billion was an existing facility they chose to max out.

[DryCreek]

19 hours ago, john91498 said:

Why would the feds help a company that skirts US tax laws by flagging their ships in 3rd world countries?

It's not the tax laws they are skirting, it's cabotage laws they are "working around".

 

Jones Act.

[CI66774]

5 hours ago, LaRue1975 said:

The CEO of United said the stimulus money is not enough and they are still laying off workers, I think that is when the sell off started. 

That's not what he said. He said chance of layoffs after September.

[LaRue1975]

16 minutes ago, CI66774 said:

That's not what he said. He said chance of layoffs after September.

I just saw a quick synopsis on the news, thank you for the clarification. I should have known to check for myself before going with the “headline”.

[xDisconnections]

1 hour ago, DryCreek said:

It's not the tax laws they are skirting, it's cabotage laws they are "working around".

 

Jones Act.

Jones Act refers only to cargo.

 

You must be confusing it with the PVSA.

[jimbo5544]

8 minutes ago, xDisconnections said:

Jones Act refers only to cargo.

 

You must be confusing it with the PVSA.

Easy to confuse these two

[chengkp75]

5 hours ago, DryCreek said:

It's not the tax laws they are skirting, it's cabotage laws they are "working around".

 

Jones Act.

How is flagging a ship in a foreign country skirting cabotage laws?  Cabotage only applies to coastwise trade, and the cruise ships do not participate in coastwise trade.  It is very much tax laws that drive the vast majority of the world's ships, not just cruise ships, to use flags of convenience.  In this particular instance, the Section 883 of the IRS Code allows that foreign corporations that operate vessels or airplanes in the US do not have to pay corporate taxes on the US earnings of those vessels or planes.

[chengkp75]

19 hours ago, Illbcruzn4life said:

 

They cannot flag their ships in the U.S. unless the ships are built in the U.S.




Sent from my iPad using Forums

 

This is not correct.  A ship may be built overseas, but if it is owned by a US entity, it may be flagged as a US vessel.  However, that US vessel is not eligible for PVSA (passenger) or Jones Act (cargo) compliance, since it is not built in the US.  There are quite a few ships out there flying the Stars and Stripes that were never built in the US.  I remember when I was on a ship that called in Bremerhaven, Germany, years ago, and there was a small Baltic coasting ship (the type that would never venture across the Atlantic) that was flying the US flag.  I went aboard her one day and asked the Captain/owner about his ship, and he said he bought the ship in Germany, flagged it US so that he could carry US preference cargoes around the Baltic.  I've worked about a half dozen ships in my time that were built overseas and flagged US.

[ontheweb]

5 hours ago, chengkp75 said:

This is not correct.  A ship may be built overseas, but if it is owned by a US entity, it may be flagged as a US vessel.  However, that US vessel is not eligible for PVSA (passenger) or Jones Act (cargo) compliance, since it is not built in the US.  There are quite a few ships out there flying the Stars and Stripes that were never built in the US.  I remember when I was on a ship that called in Bremerhaven, Germany, years ago, and there was a small Baltic coasting ship (the type that would never venture across the Atlantic) that was flying the US flag.  I went aboard her one day and asked the Captain/owner about his ship, and he said he bought the ship in Germany, flagged it US so that he could carry US preference cargoes around the Baltic.  I've worked about a half dozen ships in my time that were built overseas and flagged US.

Kind of ironic that it is disadvantageous to fly the US flag on ships in the US while it can be an advantage to fly the US flag on ships in non-US ports.

[HxFx]

7 hours ago, LaRue1975 said:

Ok, that’s my two cents, might be worth a penny, lol! I hope it all works out and the cruise industry survives in hopefully something resembling what it was a month or so ago. It is going to change and adapt, hopefully for the better. 
 

 

Thanks, very well thought out. There does seem to be a lot of snobbery on the whole cruise thing, even among cruisers! Lots of judgement about when to try to cruise again…Everyone has different circumstances. Many are very limited in the time of year they can take a vacation (like me) and when you’ve just come off of a work schedule that had you working 7 days a week for several months, losing sleep from the stress; maybe you’re a little anxious. Add to that a winter without any real sun, a much planned celebration, lack of human contact…taking a vacation seems like it would do a lot for one’s health. Most are just being optimistic and not looking to endanger anyone. Things can change quickly and nothing wrong with hope (and planning is my happy place!)

 

I am new to cruising but one thing I can’t deny is your point about the affordability. As someone nearing retirement, the cost compared to my trips to Turks and Caicos, Grand Cayman, or even St. Pete Beach is probably about half, and that’s with a balcony! Some of us just want to stretch our retirement dollars (especially after watching years of savings plummet over the last few weeks). Although at this point it seems we can’t even take a calm vacation to anywhere.

[chengkp75]

2 hours ago, ontheweb said:

Kind of ironic that it is disadvantageous to fly the US flag on ships in the US while it can be an advantage to fly the US flag on ships in non-US ports.

Not sure how it is disadvantageous to be a US flag vessel in US ports.  If you know the real reasons and the history prior to enacting of the PVSA, rather than the drivel that Wikipedia gives, you would know why it requires coastwise ships to be built in the US.  And, rather than being a disadvantage to be US flagged in domestic trade, it is the ultimate advantage, in that you are the only ones allowed to do it.

Edited March 28, 2020 by chengkp75

[miataman19]

On 3/27/2020 at 6:40 AM, RWolver672 said:

 

This is just my opinion.  The cruise industry is more than the cruise ships.  It's people flying in to a cruise.  It's people driving into a cruise using gas and staying at a hotel on the way to a cruise.  It's shop owners at the ports that cater to cruisers.  It's Uber drivers that take people from their hotels to the port or picking them up at the airport.  It's hotels that cater to cruisers coming in a few days early and staying after the cruise.  It's the TAs that book the cruises.

 

It's the longshoremen that handle the luggage.  It's the restaurants that feed the people while staying at the hotels.  It's even the clothing industry where people buy new clothes to go on a cruise.

 

As you can see, there are many, many people affected by the cruise industry.  Not just the cruise lines.

 

You can also add all of the businesses that supply those cruise ships in the many ports around the United States and the world. I have a friend that owns a produce company in Miami. He supplies Port Everglades and Port Miami. Those 2 ports are 90% of his business. And the suppliers of the small wares / paper goods. It might just effect some around the ports but it adds up quick when those ships don't sail.    

[chengkp75]

38 minutes ago, miataman19 said:

 

You can also add all of the businesses that supply those cruise ships in the many ports around the United States and the world. I have a friend that owns a produce company in Miami. He supplies Port Everglades and Port Miami. Those 2 ports are 90% of his business. And the suppliers of the small wares / paper goods. It might just effect some around the ports but it adds up quick when those ships don't sail.    

Virtually every business is connected to another business in today's global marketplace.  So, Samsung TV's are made in various countries, none in the US.  If Samsung needs financial aid, should we offer low interest loans to them, because of the longshoremen who unload the ships bringing the TV's to the US, and the truck drivers who deliver the containers to the wholesalers, and the wholesalers' warehouse workers, and finally all the Best Buy employees?

[ontheweb]

1 hour ago, chengkp75 said:

Not sure how it is disadvantageous to be a US flag vessel in US ports.  If you know the real reasons and the history prior to enacting of the PVSA, rather than the drivel that Wikipedia gives, you would know why it requires coastwise ships to be built in the US.  And, rather than being a disadvantage to be US flagged in domestic trade, it is the ultimate advantage, in that you are the only ones allowed to do it.

Isn't it disadvantageous because they would have to have a US crew and follow US labor laws? The NCL experiment in Hawaii with multiple US flagged ships did not last long before they reduced it to one ship even though they were able to provide a Hawaiian Islands cruise without having lot of sea days and a foreign port before actually cruising Hawaii.

[chengkp75]

19 minutes ago, ontheweb said:

Isn't it disadvantageous because they would have to have a US crew and follow US labor laws? The NCL experiment in Hawaii with multiple US flagged ships did not last long before they reduced it to one ship even though they were able to provide a Hawaiian Islands cruise without having lot of sea days and a foreign port before actually cruising Hawaii.

But you are saying that it is disadvantageous to be US flag in US port, while advantageous to be US flag in foreign port.  A US flag ship that is not Jones Act or PVSA compliant, even one like the small Baltic ship I mentioned, must have a full US crew, and follow US labor laws, and pay to have the USCG fly over to Germany to inspect the ship every year.  His competitors in Europe don't have to pay those costs.  So, there is no difference, except for the carriage of coastwise cargo/pax, between a PVSA/Jones Act ship and one that is not compliant.  NCL lost the two ships due to overcapacity in the Hawaiian market, and market pressures from the foreign flag ships providing cruises from the West Coast to Hawaii for less.  While the additional cost is a disadvantage, the advantage is that they are the only ship able to provide the Hawaii only cruises.  Because there has not been a significant rise in fares on the POA over the years, it is indicative that there is just not the market for the capacity provided by three US flag ships.

[DryCreek]

11 hours ago, chengkp75 said:

How is flagging a ship in a foreign country skirting cabotage laws?  Cabotage only applies to coastwise trade, and the cruise ships do not participate in coastwise trade.  It is very much tax laws that drive the vast majority of the world's ships, not just cruise ships, to use flags of convenience.  In this particular instance, the Section 883 of the IRS Code allows that foreign corporations that operate vessels or airplanes in the US do not have to pay corporate taxes on the US earnings of those vessels or planes.

If a ship is involved in coastwise trade, it must be crewed by Americans, as I understand.  If the cruise ship does not have at least one "distant foreign port", then it is considered to be involved in coastwise trade.  Otherwise they would be operating historic East Coast Tours, or Gulf Coast Port tours, or New England fall cruises like the American Cruise Lines does.  By using the Jones Act as a model, flags of convenience are used.  While using the flags of convenience also gives them tax advantages in the countries they service, it also prevents them from going from one US port to another without an international stop.

 

Yes, I realize that in most instances (certain Alaskan cruises excepted) we are talking closed-loop cruises.

 

I would love to be able to take a cruise on a Fantasy class ship that boards in Galveston, has overnight stops in New Orleans, Gulfport, Mobile, Tampa and then Key West, with two sea days on a return.  But, the cruise line would have to have an American crew, and an American-flagged ship.  So, in my thinking the Jones Act forces cruise operators such as Carnival and others to visit mediocre destinations like Cozumel and Progreso.  They are starting to build their own captive ports too like Coco Cay and Castawway Cay.

 

So, my reasoning is probably too circuitous when it comes to flags of convenience, and I'm willing to admit if my position seems wrong.

[Illbcruzn4life]

11 hours ago, chengkp75 said:

This is not correct.  A ship may be built overseas, but if it is owned by a US entity, it may be flagged as a US vessel.  However, that US vessel is not eligible for PVSA (passenger) or Jones Act (cargo) compliance, since it is not built in the US.  There are quite a few ships out there flying the Stars and Stripes that were never built in the US.  I remember when I was on a ship that called in Bremerhaven, Germany, years ago, and there was a small Baltic coasting ship (the type that would never venture across the Atlantic) that was flying the US flag.  I went aboard her one day and asked the Captain/owner about his ship, and he said he bought the ship in Germany, flagged it US so that he could carry US preference cargoes around the Baltic.  I've worked about a half dozen ships in my time that were built overseas and flagged US.

 

Thanks for the correction Chief. 🙂

 

I will stop spreading this misinformation and apologize for that.

[DryCreek]

15 hours ago, xDisconnections said:

Jones Act refers only to cargo.

 

You must be confusing it with the PVSA.

Probably.

But I was going by the traditional definition of cabotage: "The transportation of passengers and goods within the same country.".

And, here's the Cruise Critic article clearing it all up for me.

[chengkp75]

37 minutes ago, DryCreek said:

If a ship is involved in coastwise trade, it must be crewed by Americans, as I understand.  If the cruise ship does not have at least one "distant foreign port", then it is considered to be involved in coastwise trade.  Otherwise they would be operating historic East Coast Tours, or Gulf Coast Port tours, or New England fall cruises like the American Cruise Lines does.  By using the Jones Act as a model, flags of convenience are used.  While using the flags of convenience also gives them tax advantages in the countries they service, it also prevents them from going from one US port to another without an international stop.

 

Yes, I realize that in most instances (certain Alaskan cruises excepted) we are talking closed-loop cruises.

 

I would love to be able to take a cruise on a Fantasy class ship that boards in Galveston, has overnight stops in New Orleans, Gulfport, Mobile, Tampa and then Key West, with two sea days on a return.  But, the cruise line would have to have an American crew, and an American-flagged ship.  So, in my thinking the Jones Act forces cruise operators such as Carnival and others to visit mediocre destinations like Cozumel and Progreso.  They are starting to build their own captive ports too like Coco Cay and Castawway Cay.

 

So, my reasoning is probably too circuitous when it comes to flags of convenience, and I'm willing to admit if my position seems wrong.

Yes, first you say they are "skirting" cabotage laws, and then in your first paragraph you say how they are "abiding" by those laws by not engaging in coastwise traffic.  By my definition of "skirting" they would be trying to do coastwise traffic with foreign flag ships somehow.

[chengkp75]

28 minutes ago, DryCreek said:

Probably.

But I was going by the traditional definition of cabotage: "The transportation of passengers and goods within the same country.".

And, here's the Cruise Critic article clearing it all up for me.

Absolutely correct, except that in the US, there are two cabotage laws, one for passengers, the PVSA, and one for goods, the Jones Act.

[glrounds]

16 hours ago, jimbo5544 said:

Easy to confuse these two

 

I agree, although to be fair, the PVSA is part of the Jones Act which is what brings out all those who parse every word and phrase for accuracy.