Carnival Corporation has enough financing to see it through to the third quarter of next year even if it makes absolutely no money in that time, its president says.
Arnold Donald noted that Carnival had raised $12 billion, which gives the corporation “some comfort” during the current crisis, which has seen the cruise sector shut down since March and no immediate sign of a return to sailing en masse.
Speaking as part of Travel Weekly’s Future of Travel Week, he said: “That will give us a nice runway. That gets us 12 months at least with the possibility of going deep into the third quarter next year with zero revenue.
“Obviously we are hoping that won’t be the case. We will be sailing before then, at some scale, so we will have revenue coming in. People will be able to see the future of cruising, and will make bookings, so we’ll have cashflow coming in.
Asked if the furlough scheme in the UK coming to an end at the end of October would lead to further job cuts, Donald “We’re just hopeful that things take a turn for the better by then. There are a lot of people, not just at our company but lots of companies, that are on furlough and that can be a very taxing time for a lot of families.”
He said the company had to make “a lot of tough decisions” at the start of the crisis. “We had to repatriate over 80,000 crew members,” he pointed out. “We had to do that in a context of borders closed, airlines shut down – and a lot of countries wouldn’t even take their own citizens back for a while. It took us months. But it’s not just getting them home; a lot of them are now out of work so we have to get going again.
He explained Carnival has 150,000 employees and had to make “significant workforce reductions” globally as a result of the pandemic. “It is unfortunately a sign of the times, and a terrible outcome, and the best solution of course is to be able to sail again and create all the jobs.
Donald also noted the impact on economies within destinations cruise lines sail to, such as taxi drivers, small restaurant and small craft owners – as well as large businesses that “suddenly aren’t needed”. “These people are dependent on travel for their economies,” he said. “This is taxing. I don’t have the answer. I hope government’s step in appropriately and help transition their citizens in this very difficult time. We are clearly doing everything we can for our employees but with no revenue we’re limited in what we can do.”
Asked about consolidation among cruise lines hit by the pandemic, he pointed out most other lines had raised similar capital but said: “That doesn’t mean you won’t see some actions.”
However, he predicted “a ton of consolidation” in the cruise retail sector. “Maybe smaller operators combining, maybe a couple of big companies. There will be consolidation [but] at this point everyone just wants to weather the storm.”
