Royal Caribbean Group reported a net loss of $1.3 billion for the three months to September as it awaits the restart of sailings from the world’s biggest cruise market, the US.
Royal Caribbean resumed limited operations outside the US in July, including with three Tui Cruises ships in Germany, noted it recently received approval to sail from the Singapore government.
The group’s Quantum of the Seas is expected to resume sailing from Singapore in December.
In a statement, Royal Caribbean said it “continues to work with government and health authorities across the globe to address the unique public health challenges posed by Covid-19 and expects to re-start its global cruise operation in a phased manner.”
“These initial cruises will most likely take place with reduced guest occupancy, modified itineraries and enhanced health protocols developed in collaboration with governments and health authorities.”
Royal Caribbean joined Norwegian Cruise Line Holdings in forming a Healthy Sail Panel (HSP) of medical and scientific experts in the summer
The panel submitted 74 recommendations to the US Centers for Disease Control and Prevention (CDC) on September 21, which triggered a public consultation.
Royal Caribbean chairman and chief executive Richard Fain said: “The work of the Healthy Sail Panel has been thorough and comprehensive [and] has resulted in what has become the seminal document in this arena.
“We understand the importance of getting this right and are preparing to put these plans to the test with a gradual and methodical return to service in the near future.”
The company noted it had taken further action to enhance its liquidity as it continues to burn $250 million to $290 million a month in cash.
It reported it had $3.7 billion in liquidity at the end of September, including $3 billion in cash, compared with $4.1 billion on June 30.
However, it raised an additional $1.15 billion during October.
The group’s total cash spending during the third quarter was $1.1 billion.
Royal Caribbean reported: “When the company starts returning its fleet into service, it will incur incremental spend as it brings ships out of their various levels of layup, returns the crew to the vessels, takes the necessary steps to ensure compliance with the recommended protocols and restarts its sales and marketing activities.”
Executive vice president and chief financial officer Jason Liberty said: “We are optimistic that with the gradual resumption of cruise operations, our cash flow from operations will sequentially improve, driven by an increase in the inflow of customer deposits.”
Royal Caribbean added: “Booking activity for the first half of 2021 is aligned with the company’s anticipated staggered resumption of cruises.
“The cumulative booked position for sailings in the second half of 2021 is within historical ranges, with prices down slightly year over year when including the impact of bookings made with future cruise credits (FCCs) and about flat when excluding them.
“More than 65% of 2021 bookings are new.
“The Company continues to provide guests who were booked on a suspended sailing with the option to request a refund, to receive an FCC or to ‘lift and shift’ their booking to the following year. “
Royal Caribbean noted that, as of September 30, it had $1.8 billion in customer deposits of which 50% are FCCs and $180 million “correspond to fourth quarter 2020 sailings”.
It said about 50% of guests booked on cancelled sailings had requested cash refunds.