Saga is suspending cruises until May 1 in a move likely to cost the over-50s operator up to £15 million.
The company said it was reacting to the government’s updated travel advice against people over 70 and those with pre-existing health conditions from taking cruises.
The suspension of cruise trading for the next six weeks will cut pre-tax profit at Saga’s cruise division by between £10 million and £15 million.
More: Latest coronavirus news and updates
Cruise lines respond to Foreign Office cruise ship advice
Podcast: Your coronavirus questions answered
Related advance customer receipts for this period are £22 million, according to the company.
Sag said: “The health and safety of customers and colleagues is our number one priority.
“We have, therefore, made the decision to temporarily suspend operations of our Cruises until 1 May 2020.
“Our customer service teams will be in contact with cruise customers who were due to travel in the next six weeks to offer them either a full refund or a credit for a future departure.
“Demand for our Cruises has been very positive, with bookings of around 80% of the full year revenue target.
“While cancellations had increased in recent weeks, as of 11 March 2020, the average booked load factor for the remaining five cruise departures in March was 79% and the average booked load factor for five April departures was 85%.”
The travel and insurance company added: “While the travel environment remains uncertain, the group continues to have significant available liquidity, underpinned by a £100 million undrawn revolving credit facility, £33 million of cash at the end of February and the strong cash generation of the insurance business.
“As previously noted, the insurance business is not expected to be significantly impacted by Covid-19 and has had a good start to the current financial year.
“The two disposals recently announced are also expected to generate an additional £37 million of cash proceeds in the first half.
“There are a range of further mitigating actions the group will take including additional cost efficiencies and reducing discretionary spend.”