Jump to content
Cruise Critic Community
geocruiser

How Long Can Princess Stay A Cruise line?

Recommended Posts

Does anyone else think that as most of us on Cruise Critic have lots or even more than that in FCC that most of the first cruises will not generate any real money for Princess cruise line. We have enough for a really nice cruise or several mid grade cruises and I think a lot of folks also have a lot of FCC on account so this may effect the beginning of the cruise season when or if they do begin. Just wondering how this will effect prices and availability.  Could Princess limit the amount of cabins sold to folks using FCC or just go with the flow and hope that we all get our sailings out of the way.

Share this post


Link to post
Share on other sites
6 minutes ago, Shaver John said:

Does anyone else think that as most of us on Cruise Critic have lots or even more than that in FCC that most of the first cruises will not generate any real money for Princess cruise line. We have enough for a really nice cruise or several mid grade cruises and I think a lot of folks also have a lot of FCC on account so this may effect the beginning of the cruise season when or if they do begin. Just wondering how this will effect prices and availability.  Could Princess limit the amount of cabins sold to folks using FCC or just go with the flow and hope that we all get our sailings out of the way.

The amount of FCC given out amounts to about 6 weeks of normal cruise revenue.  But that 6 weeks is spread out over 2021 and a portion of 2022. So roughly that amounts to a reduction of about 7.5% of normal revenue over an 18 month period.

Share this post


Link to post
Share on other sites
48 minutes ago, Shaver John said:

Does anyone else think that as most of us on Cruise Critic have lots or even more than that in FCC that most of the first cruises will not generate any real money for Princess cruise line. We have enough for a really nice cruise or several mid grade cruises and I think a lot of folks also have a lot of FCC on account so this may effect the beginning of the cruise season when or if they do begin. Just wondering how this will effect prices and availability.  Could Princess limit the amount of cabins sold to folks using FCC or just go with the flow and hope that we all get our sailings out of the way.

I am sure that Princess will figure out a way to make sure that they start generating revenues when they are back in business.  

Share this post


Link to post
Share on other sites
5 hours ago, geocruiser said:

I have another question.  I have read here that Princess has money to stay afloat until mid next year or so.  Is this money from their profits, of borrowed?

Hello,   if you read the article that I posted in #27;  it explains your question.  Have a great weekend

Share this post


Link to post
Share on other sites

Under normal circumstances as we have had for decades everybody can see how a single company might go bankrupt and the remaining assets be sold off to others who have money.  Similarly in the past countries have gone bankrupt and other countries which value them have bailed them out financially for political reasons.  The situation the world faces now is universal bankruptcy with nobody able to buy up any assets.  I think what will eventually happen is government around the world will simply print more money to keep going, loan it to businesses so they may continue and survive.  The net result being that all life savings people have will be diminished proportionately to how much they had accumulated in the first place with every currencies value reducing.  Every citizen of the world will have taken an economic setback but some more than others but businesses will continue. It is not as bad  a crisis such as an all out world war three but there will clearly be people who unfortunately lose their lives but the world will go on.

 

Regards john

Share this post


Link to post
Share on other sites

Another "glass half full" thread without any proof there is even a glass.

Share this post


Link to post
Share on other sites
13 hours ago, AF-1 said:

Hello,   if you read the article that I posted in #27;  it explains your question.  Have a great weekend

Hello,

 

Good article.  Some how I missed it before.

Share this post


Link to post
Share on other sites

I can see them returning some time in late 2021 providing they have a vaccine sometime in the early part of the year. If there's no vaccine available I can only imagine they would have to sell the ships as scrap.

After all who wold be interested in going into a cruise business at that point in time?

Share this post


Link to post
Share on other sites
On 9/4/2020 at 10:09 AM, geocruiser said:

I am just think about how long can Princess Cruise line stay afloat with no cruises sailing.  They still have ships to maintain.  Each ship has expenses, Officers, crew and fuel and repairs to keep it running.   Plus shore side staff.  They have not sailed and will not sail for a while.  How long can Princess stay a float before they fold?  Of course Princess can sell off some ships, but will they get buyers and at what price.

What is you view point on this?

 

FlyerTalk is the CruiseCritic of aviation.  Organized much the same way, mainly by airlines.

 

A few years back when United Airlines was clearly spiraling towards bankruptcy their board was filled with worry and strife.  Would they go chapter 11 or not, could they survive, what will happen to my frequent flyer miles, etc, etc, etc.  The same sorts of worries we all feel now regarding cruises and cruise lines.  Ultimately, United did go bankrupt and did emerge from the process and ultimately was forced (by the creditors) to merge with Continental.   

 

Here's what we learned in those processes.  

 

- The loyal customers are a genuine asset.  While we customers fretted about losing our hard earned frequent flyer miles, in fact our loyalty, represented by those miles were financially valuable to the airline.  In fact, they were (and are) so valuable that they can and have been leveraged for emergency capital.  There's really no equivalent in the cruise industry, our earned status yields us zero cost benefits (a better place in the boarding line, first dibs on tenders, "free" nibbles when we buy a cocktail) still the loyalty of Princess customers is undeniably an asset, one that is likely to be preserved and even leveraged to survive this situation.

 

- The future won't necessarily be like the past, but that's okay.  The United Airlines of today is really Continental Airlines rebranded with the better recognized United brand.  As a long time, heavy flyer of "United" I could tick off a long list of what changed with the bankruptcies and with the final Continental ownership - guess what over time much more has remained the same than has changed.  The route network is broadly the same, the basic mechanics of operating the airline is broadly the same, perks and rewards ebb and flow regardless of owner depending mostly on competition.  I expect the same from Princess, even if there are forced changes such as, for example, a forced union with, say HAL.  No doubt Princess will remain upper middle market.  No doubt it will cruise world wide.  No doubt it will target the same late middle age demographic.  Could there be changes around the edges, sure, but the fat part of the service profile will remain about the same.

 

- Will cruising and key brand assets survive?  Without a doubt.  Before the pandemic cruising had penetrated into only about 10% of the U.S. public, there is enormous room for growth.  Marquee brands like Carnival, Princess and Royal Caribbean will undoubtedly lead the way out.  Will there be carnage - no doubt - those 3rd tier brands that relied on cheap end of life hardware and lowest daily cost passengers have been hurt - even here however these is just no doubt that upstarts will emerge making use of cheap ships saved from the breakers and no frills traveller who just want a few days away, some strong drinks and a lively casino.  In fact, I expect Princess to emerge in better operational shape than she was entering the crisis, ships that were moderately profitable will be jettisoned, home ports that never really performed as expected, likewise.  The emergent line is likely to be far more fit financially though that may mean higher fares and few choices (just like the airlines).

 

Oh, and to directly answer OP's question.  Carnival has cash reserves as of today, sufficient to fund operations with zero new cruise revenue for about a year.  Long before that cash hoard runs dry, they'll go back to the lending community for more cash if needed.  Right or wrong the U.S. treasury has made it clear that they will stand behind any level of large company debt related to the pandemic.  I'm uninterested in the politics of the situation just simply stating the fact that corporate debt is presently being assured, without limit, by the treasury - a situation that is unlikely to change regardless of who leads the next administration.  Shareholders are at some risk of being liquidated (fancy words meaning taken to $0) if the situation drags on deep into '21, even then, Carnival would undoubtedly survive under management of the debt holders who can best get repaid by sailing.  After all, there's not much market for foreclosed 100,000grt cruise ships just now.

 

I apologize for the verbosity but the question is an interesting one and I couldn't help but draw what I think are some relevant parallels.  

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Forum Jump
    • Categories
      • Forum Assistance
      • New Cruisers
      • Cruise Lines “A – O”
      • Cruise Lines “P – Z”
      • River Cruising
      • ROLL CALLS
      • Digital Photography & Cruise Technology
      • Special Interest Cruising
      • Cruise Discussion Topics
      • UK Cruising
      • Australia & New Zealand Cruisers
      • North American Homeports
      • Ports of Call
      • Cruise Conversations
×
×
  • Create New...