LocoLoco1 Posted October 25, 2020 Author #26 Share Posted October 25, 2020 I distinctly recalI a few large cruise lines state in their 1stQuarter earnings reports they had ‘secured adequate financing for operations’ to the end of the year. It’s almost November now. Methinks Saudi money only goes so far.. Cruising is discretionary spending unlike food or heat bills. I’ll say 1 of the Big 4 folds. RCL?? Link to comment Share on other sites More sharing options...
iancal Posted October 25, 2020 #27 Share Posted October 25, 2020 (edited) The reality is straightforward. What lender will consider bridging loans or financing when there is no clear path to forecast operating revenue let alone operating profit from the borrower? And if a loan.. at what interest premium assuming that there is security.assets remaining to be attached. Failing that more dilution of the stock from a stock offer? The challenge is that the NA covid numbers are terrible. And seemingly getting worse each day....rounding the wrong curve so to speak with no 'petering out' to speak of. Edited October 25, 2020 by iancal 1 Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 25, 2020 Author #28 Share Posted October 25, 2020 Exactly. Beyond Covid-19 long term, their new share offerings dilute value and punitive Interest Rates makes future profitability iffy. Future Over-capacity looks probable and the next virus is not IF but WHEN. Not where I want my money.. Link to comment Share on other sites More sharing options...
Rare Hlitner Posted October 25, 2020 #29 Share Posted October 25, 2020 13 hours ago, LocoLoco1 said: I distinctly recalI a few large cruise lines state in their 1stQuarter earnings reports they had ‘secured adequate financing for operations’ to the end of the year. It’s almost November now. Methinks Saudi money only goes so far.. Cruising is discretionary spending unlike food or heat bills. I’ll say 1 of the Big 4 folds. RCL?? The latest financial info seems to support the concept that the major cruise lines can survive until, at least, the 2nd half of 2021. By the 2nd half of 2021 all bets are off and the cruising future will depend on the ability of the lines to resume a major portion of their schedule. There are other relevant issues oft ignored on these boards. Many of the crew on a cruise ship needs to be highly trained, practiced, and available. As time goes on without cruising, many of the most experienced crew members will need to build new lives without cruise jobs. Many of these folks might not return (when the industry reopens). Also consider that ships being in cold or warm layup will suffer from lack of daily use and maintenance. Bringing these ships back up to a fully operational status will become more difficult as time goes on. It also is very expensive to reopen cruise lines and this is going to really put pressure on management to "do it right" if they want to survive as an ongoing business entity. The industry shut down did not go well but we can all pray that the "suits" do a better job with reopening. Just the logistics of putting things back into operation is enough to boggle most minds. Hank 1 Link to comment Share on other sites More sharing options...
iancal Posted October 25, 2020 #30 Share Posted October 25, 2020 (edited) Carnival's fiscal year end is Nov. 30. I believe we will see the report in January. I also believe that prior to that we will see more actions by Carnival Corp. I believe that the Statement of Cash Flows will be revealing...especially the bottom line number. This will be one key to their survival when compared to their monthly burn rate. What else will interest me? Firstly, any auditor's qualification notes in the their opinion. Second, any significant litigation issues in the notes to the financial statements. Edited October 25, 2020 by iancal Link to comment Share on other sites More sharing options...
Joebucks Posted October 25, 2020 #31 Share Posted October 25, 2020 They will survive. They have money. They have customers who want to cruise. They will resume cruising no later than Spring, hopefully earlier. Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 25, 2020 Author #32 Share Posted October 25, 2020 I have booked 2 HAL cruises for 2021 mostly because my FCC fine-print reads, ‘Book it now or lose it.’ Many 10’s of thousands must be doing the same. That’s not exactly a $Cash Cow$ there for the industry. Troubled waters indeed. Link to comment Share on other sites More sharing options...
sfaaa Posted October 25, 2020 #33 Share Posted October 25, 2020 2 hours ago, Joebucks said: They will survive. They have money. They have customers who want to cruise. And they have developed new health protocol to deal with COVID 19. The only link missing is the vaccine. Get that and it will be all systems go. Link to comment Share on other sites More sharing options...
Joebucks Posted October 25, 2020 #34 Share Posted October 25, 2020 31 minutes ago, sfaaa said: And they have developed new health protocol to deal with COVID 19. The only link missing is the vaccine. Get that and it will be all systems go. Not really trying to start this discussion, but the vaccine is not crucial to cruises starting up Link to comment Share on other sites More sharing options...
navybankerteacher Posted October 25, 2020 #35 Share Posted October 25, 2020 56 minutes ago, Joebucks said: Not really trying to start this discussion, but the vaccine is not crucial to cruises starting up But, absent a serious waning of the threat through some other means, ENJOYABLE cruises are NOT likely to start up. 1 Link to comment Share on other sites More sharing options...
iancal Posted October 25, 2020 #36 Share Posted October 25, 2020 Agree. Lots of bravado and cavalier statements on this forum. It is easy to have bravado when cruises are not operating. Might be a very different story when cruising is a possibility but effective vaccines are not yet available. Our goal is not to take a cruise. Our goal is to take a safe and an enjoyable cruise that has attractive port stops. If we do not believe that there is a chance that the cruise will not have these three attributes there is no real value to us. We would select different travel options in the interim. 2 Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 26, 2020 Author #37 Share Posted October 26, 2020 3 hours ago, Joebucks said: Not really trying to start this discussion, but the vaccine is not crucial to cruises starting up I wonder who cruiselines MUST listen to, their Creditors or the WHO and CDC?? Could be a tussle dead ahead. Link to comment Share on other sites More sharing options...
Rare broberts Posted October 27, 2020 #38 Share Posted October 27, 2020 Given that a cruise ship is practically worthless for any other purpose, I doubt many lenders would be willing to call its secured loans before cruising once again becomes viable. In fact I expect many are willing to advance more financing to cover the relatively low current operating costs. 1 Link to comment Share on other sites More sharing options...
iancal Posted October 27, 2020 #39 Share Posted October 27, 2020 One challenge is that the longer this goes on, the less asset value the fleet will have, in terms disposal value for lenders' security, and the more cash that gets eaten up. The cruise lines are getting hit both ways. 1 Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 29, 2020 Author #40 Share Posted October 29, 2020 I suspect longer Cruises, 15+ days, are toast for quite a while. I just booked an April 2021, but I am not optimistic. Older people usually do the long cruises and the possibility of adding Covid virus to a Nursing Home like setting seems nutty without a truly effective vaccine. Also, foriegn Ports-o-Call may not want us ashore until THEY are vaccinated. Lastly, the Cruiseline industry is financially frail right now. Who would load up 2500 PAX plus crew and set sail for a 50-day lawsuit waiting to happen?? Probably none of em. Nov.1st CDC announcement is dead ahead 1 Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 31, 2020 Author #41 Share Posted October 31, 2020 It’s now Nov 1, 2020 and CDC sez Cruiselines can run ‘Mock Cruises’ out of the USA for the time being. Good. Now for the hard part. When will $Cash$ paying customers fill enough Cabins on NCL, RCL, CCL and Fred Olson et al to turn a $Profit$ ?? I will say 6/months AFTER an effective Vaccine is avail. to the entire Planet. 1stQuarter 2022. Link to comment Share on other sites More sharing options...
FredT Posted October 31, 2020 #42 Share Posted October 31, 2020 On 10/25/2020 at 7:41 PM, iancal said: Agree. Lots of bravado and cavalier statements on this forum. It is easy to have bravado when cruises are not operating. Might be a very different story when cruising is a possibility but effective vaccines are not yet available. Our goal is not to take a cruise. Our goal is to take a safe and an enjoyable cruise that has attractive port stops. If we do not believe that there is a chance that the cruise will not have these three attributes there is no real value to us. We would select different travel options in the interim. But we are in the minority here..... Look at the vast majority of people booking a cruise. They go on the 3-7 day cruises on the mega ships, and a HUGE percentage of them never DO get off in Freeport or Couzmel. The will be happy to go on cruises to nowhere, or with one stop at a private island, etc etc. Link to comment Share on other sites More sharing options...
iancal Posted October 31, 2020 #43 Share Posted October 31, 2020 (edited) There is no doubt in my mind that the industry will survive. Potential bankruptcies and/or re-organizations with the possible elimination of some cruise line brands may in fact be very positive for the industry from a financial perspective given where the industry is today and where it may be over the next six months. I suspect that we will get an indication when the upcoming respective fiscal year end results the Carnival Corp, RCI, NCL, etc are released. In the interim it would not surprise me at all to see more cruise ships go to the breakers yard or sold off at fire sale prices. Edited October 31, 2020 by iancal Link to comment Share on other sites More sharing options...
LocoLoco1 Posted October 31, 2020 Author #44 Share Posted October 31, 2020 Remindful of Wells-Fargo, GE, OXY etc now with their backs to the wall. Right when they need more top-line income they have to sell some premium assets to keep the lights on. But nowadays, who the heck wants a USED cruise ship that burns bunker fuel?? I just hope I get vaccinated and my HAL April cruise thru Panama Canal sails... Link to comment Share on other sites More sharing options...
iancal Posted October 31, 2020 #45 Share Posted October 31, 2020 The ship tradeoff will be future useful life and profitability vs current cost/cash drain to mothball for an indefinite period as well as the costs the make it ready when cruising resumes. The longer the layup, the tighter the cash flow situation, the more a cruise line will lean to disposing of older ships. It is just a math exercise. Link to comment Share on other sites More sharing options...
Heidi13 Posted October 31, 2020 #46 Share Posted October 31, 2020 4 hours ago, LocoLoco1 said: But nowadays, who the heck wants a USED cruise ship that burns bunker fuel?? While this current situation is unique, this is not the first time the very resilient marine industry has survived seemingly insurmountable problems. Most posters on here probably have little, if any experience of when when many passenger ships not only carried cargo, especially the mail, but shipping companies were highly diversified across multiple areas of the industry. Prior to the growth of Carnival, RCCL and NCL, many of the large passenger lines had cargo and passenger interests - P&O and Cunard are 2 examples. In 1975, P&O was the world's largest shipping company, with multiple shipping divisions, one of which was passenger division. In 2000, due to the investments required for new tonnage, they created P&O cruises, a wholly owned subsidiary that only had pax shipping. It was then purchased by Carnival in 2003. Prior to the demise of passenger liners, the ships also carried the mail and cargo, as I recall loading the holds of Oriana in Southampton prior to sailing for Sydney. Unfortunately the new crop of cruise ships do not have this option. If the current owners do not remain solvent, the marine industry has a number of wealthy owners, with considerable experience of owning and operating ships. Even if their current managers are too young to remember, they only have to look at MSC to see the potential, especially if they purchased used tonnage at rock bottom prices. Provided people still want to cruise, somebody will purchase the ships if/when the current pax only companies are liquidated, or have to sell assets to remain solvent. Link to comment Share on other sites More sharing options...
sfaaa Posted October 31, 2020 #47 Share Posted October 31, 2020 Bunker fuel price is a bargain these days compared to a few years ago. Link to comment Share on other sites More sharing options...
LocoLoco1 Posted November 1, 2020 Author #48 Share Posted November 1, 2020 LNG fuel and then Hydrogen power and whole new ship layouts on the horizon methinks. Lotsa really BIG vessels soon to be built as I have read it. 1 Link to comment Share on other sites More sharing options...
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