The parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands, has provided an update this week, in response to the Covid-19 global pandemic.
In a statement, the operator confirmed the voluntary suspended of all cruise voyages until 30 June 2020 for its three brands. All 28 ships in the Company’s fleet are in safe haven in port or at anchor.
Prior to the outbreak of Covid-19, 2020 was off to a strong start with all three of the Company’s brands, however, the operator has since experienced substantial impacts related to the emergence of the pandemic.
All three brands have instituted programs for guests on canceled sailings as a result of the suspension which include offering value-add future cruise credits typically for 125% of the cruise fare paid in lieu of providing cash refunds. These future cruise credits are valid for any sailing through 31 December 2022.
The operator has reported that approximately half of the guests who have had their voyages cancelled have requested cash refunds. As of 31 March 2020, Norwegian had $1.8 billion of advanced ticket sales. This includes approximately $850 million for previously announced voyage cancellations through 30 June where guests have the option of either a future cruise credit or a cash refund and approximately $350 million for voyages scheduled for the remainder of 2020.
Norwegian has undertaken several proactive measures to mitigate the financial and operational impacts of Covid-19, including, the cold lay-up for its ships, which could indicate a phased restart when operations resume.
While the company has secured a new $675 million revolving credit facility and fully drew down on this new facility as well as its existing $875 million revolving credit, they are bleeding approximately $110 million to $150 million per month during the suspension of operations.
The Covid-19 outbreak has clearly had a significant impact on the operators financial position and results of operation. If the suspension of sailings is further extended, Norwegian’s financial position would likely continue to be significantly impacted.