NCL chief says company is well-placed to ride out crisis

The Covid-19 pandemic will result in “casualties” from the cruise sector but they will not come from Norwegian Cruise Line Holdings, according to its boss.

Speaking on a Travel Weekly Webcast, president and chief executive Frank Del Rio said: “There’s no question there’s going to be casualties in this war. I think that certain brands will go out of business. I think certain cruise ships that are on order will not be delivered. I think that marginal ships that were operating at a slight profit may not operate at a profit any longer in this more demand-constrained environment.

“So yes, I think that there will be inventory leaving the system. But I’m very confident that the combination of only having 28 ships compared to some other companies that have many more; having the youngest fleet in the industry, which means more balconies, more of the venues that people want to enjoy, and the nine vessels on order, means we will be able to succeed very well in the new environment ahead of us.”

Del Rio added: “We have the youngest fleet of all the major cruise lines, so our oldest ship is still 11 or 12 years away from even being considered to be to be retired, and by the way that vessel underwent a complete refurbishment in January and February, right before Covid-19 hit. So that ship is literally brand new…better than new.”

Del Rio confirmed he would not delay or cancel any of the new ship orders that are currently on the books for his three brands, Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

“We have nine vessels on order – six for Norwegian; two for Oceania; one for Regent,” he said.

“The good news is that none of them come until 2023, so I have quite a bit of time when I don’t want more inventory to get ready for that. I’m not too worried about the ship that comes in 2027. By that time, this will all be just a memory.”

Asked if the company now had sufficient liquidity to see it through the coronavirus crisis, particularly in light of its statement in early May that the disruption from the pandemic combined with debt maturities were raising “substantial doubt over NCLH’s ability to remain as a going concern”, Del Rio said: “Bad news sells more newspapers than good news. That headline was a technical requirement of our chartered accountants; they had to say that. That same afternoon we raised $3 billion, but you never heard about that in the afternoon edition of the newspapers, unfortunately.

“So yes, we have the longest runway now of any of the major cruise companies. We believe that we can sustain ourselves for longer than 18 months with zero revenue, which is longer than anybody suspects this will go on, so I am beyond confident that Norwegian Cruise Line holdings will be one of those success stories coming out of this tragic, this horror story.”.


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