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I heard a real quick discussion of whether the government should save the cruise industry

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Just now, clo said:

But that has nothing really to do with cruising but rather travel in general, right? And one certainly can't see all or even much of Europe on a cruise. So is that what you're saying?


That pretty well sums it up.  I will say that overall Europe is far more accessible via cruise (river cruises) than the USA where there are really only a couple of places--parts of the Mississippi (those boats don't appeal in the least) and the Columbia River.  We've spent a lot of time in that area land based.  I wouldn't entirely rule out a cruise, but more likely I'd rent a houseboat.

Bottom line, to those suggesting people put their travel money towards cruises leaving from US ports or other holidays based in the US, many of us have been there and done that, and it's not something we want to throw our vacation money at any longer.

 

If our Baltic Cruise is cancelled and it's say to travel, we'll probably go to Switzerland and Austria for 10 days in late November instead.  We've got friends in the Vienna area and it would be fun to see them again.

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2 hours ago, drsel said:

Agreed, cruises are not essential.

What actually happened to the airlines and Cruises after 9/11 and 2008?

Which particular Airlines and cruise lines went bankrupt?

How much did airfares and Cruise fares crash

 

I think that only Jet Blue and Southwest are the only major US airlines which have not gone through bankruptcy.  Largely because they only came into being after the others became burdened by unsustainable pilot and flight crew salaries.  Those old, very generous compensation rates is a major reason for the existence of subsidiaries like Delta Express and American Eagle.  The old lines, with their old contracts simply could not afford to continue hiring - so their newer  pilots went with the subsidiaries.

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Did any Cruise lines go bankrupt or stop operating after 9/11 and 2008

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Did airfares crash or did the cruise fares crash after these two events

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6 minutes ago, drsel said:

Did any Cruise lines go bankrupt or stop operating after 9/11 and 2008

Renaissance went out of business less than a month after 9/11. It was on shaky financial legs anyway and 9/11 was the final straw.

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So all the currently operating lines Royal Caribbean celebrity, carnival Costa Norwegian MSc survived both these crisis right?

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2 hours ago, navybankerteacher said:

I think that only Jet Blue and Southwest are the only major US airlines which have not gone through bankruptcy.  Largely because they only came into being after the others became burdened by unsustainable pilot and flight crew salaries.  Those old, very generous compensation rates is a major reason for the existence of subsidiaries like Delta Express and American Eagle.  The old lines, with their old contracts simply could not afford to continue hiring - so their newer  pilots went with the subsidiaries.

 

Ah the power of unions reach far and wide

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2 minutes ago, drsel said:

So all the currently operating lines Royal Caribbean celebrity, carnival Costa Norwegian MSc survived both these crisis right?

The situations are not at all comparable. The cruise lines were able to operate relatively normally soon after 9/11 and operated with no interruption during the 2008 financial crisis. There was a decrease in revenue from both events but that is not the same as the zero cash flow...in fact severely negative cash flow the industry is now experiencing... because of having to issue refunds for canceled cruises. And it's unlikely cruising will resume very soon, so the negative cash flow will extend well into the future with the amount of refunds due growing by the day.

 

Also it was only in the post 2008 boom that cruise lines built huge numbers of new ships, many costing $1 billion or more each that resulted the cruise lines having huge debt service obligations. Those debt service obligations can't be met in times of negative cash flow. The cruise lines' cash on hand will soon dry up and at least one I know of, NCLH, has already availed itself of $1.55 billion in lines of credit in order to try to weather the storm. Those credit facilities are also secured by NCL ships just as the loans for the new builds are so if they were to default they could lose their newest and largest ships.

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One big difference between 2001/2008/and now 2020;  this time the ships will be without revenue much longer.  After 911 and 2008 recession; the ships still sailed; they may have taken less passengers; but they didn't cancel cruises like there are now.  

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3 hours ago, navybankerteacher said:

I think that only Jet Blue and Southwest are the only major US airlines which have not gone through bankruptcy.  Largely because they only came into being after the others became burdened by unsustainable pilot and flight crew salaries.  Those old, very generous compensation rates is a major reason for the existence of subsidiaries like Delta Express and American Eagle.  The old lines, with their old contracts simply could not afford to continue hiring - so their newer  pilots went with the subsidiaries.


Actually Southwest has been around a lot longer than most are aware.  They got through the 2007-3008 meltdown because they had hedged and purchased tons of fuel at a very low price years earlier and were able to offer low rates while still making a profit.  

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1 hour ago, njhorseman said:

I don't know default is inevitable, but even if it happens there's still the likelihood of reorganization bankruptcies where the secured creditors... banks and other large institutional investors... agree to take a large equity stake in the cruise lines in return for agreeing to restructure the debt. 

Depending upon available lines of credit and length of time before bookings return, reorganization (chapter 11 most likely) might have to be the be in the future.  Current senior creditors (including those willing to lend additional funds now) would most likely get paid in full - with some possibility of having to take partial repayment in new debt securities, existing bond holders could be paid off in stock of reorganized entity, and current stock holders lucky to get anything - perhaps warrants to buy stock in reorganized corporation.

 

The longer it takes to return to sailing close to full ships, the more likely such reorganization will be.  

 

In any case it is virtually certain that the ships will sail again - just possibly with different owners.

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1 hour ago, navybankerteacher said:

Depending upon available lines of credit and length of time before bookings return, reorganization (chapter 11 most likely) might have to be the be in the future.  Current senior creditors (including those willing to lend additional funds now) would most likely get paid in full - with some possibility of having to take partial repayment in new debt securities, existing bond holders could be paid off in stock of reorganized entity, and current stock holders lucky to get anything - perhaps warrants to buy stock in reorganized corporation.

 

The longer it takes to return to sailing close to full ships, the more likely such reorganization will be.  

 

In any case it is virtually certain that the ships will sail again - just possibly with different owners.

Not Chapter 11 because the three major cruise line holding companies are not incorporated in the US, so bankruptcy should be subject to the laws of their country of domicile . NCLH is incorporated in Bermuda, RCCL in Liberia and Carnival Corp & plc in Panama ( Carnival Corp) and England and Wales (Carnival plc). 

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4 hours ago, njhorseman said:

Not Chapter 11 because the three major cruise line holding companies are not incorporated in the US, so bankruptcy should be subject to the laws of their country of domicile . NCLH is incorporated in Bermuda, RCCL in Liberia and Carnival Corp & plc in Panama ( Carnival Corp) and England and Wales (Carnival plc). 

True - I was more thinking of that sort of debtor-in-possession restructuring.  And then of course, the “home” countries of those corporations should be the ones to contemplate investing in any bail-out. Can you imagine getting Congressional approval to sink funds into foreign corporate entities while so many US corporations and citizens will obviously be in desperate need?

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On 3/18/2020 at 1:28 PM, Extra Kim said:

^^^ This!

Then add all other things that cruise passangers spend money on to be able to cruise. Flights, rental cars, hotels, food etc.

 

I have been in the U.S several times and every time because of cruises. I don't think that I would go to the U.S if all cruise ships left from another country.

Absolutley yes, but this pandemic is around to world, i dont think the loss are only for the US so the only thing that is possible is wait and see during a time

 

 

In other theme i follow one of your spotify playlists (Dance 90 -00!)  and i want asked to you if you would add some other songs of the genre.

 

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4 hours ago, sonomaphil said:

If the home countries of these cruise lines what to bail them out be my guest, just not the US government. None of these are US based companies.  Don’t bail out the cruise industry

Good point!  Why would our government bail out any foreign companies?

CLH (Norwegian) is incorporated in Bermuda, RCCL (Royal Caribbean) in Liberia,  and CCL (Carnival Corporation) is incorporated in Panama whereas Carnival plc is incorporated in England and Wales.

 
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1 hour ago, navybankerteacher said:

True - I was more thinking of that sort of debtor-in-possession restructuring.  And then of course, the “home” countries of those corporations should be the ones to contemplate investing in any bail-out. Can you imagine getting Congressional approval to sink funds into foreign corporate entities while so many US corporations and citizens will obviously be in desperate need?

Unfortunately I can envision Congress helping bail out the cruise lines.  Given that cruise line stocks outperformed the market as whole today, on a day when the market did very well, I have the suspicion that there's something in the pending legislation for the cruise lines. 

 

 

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9 hours ago, njhorseman said:

Unfortunately I can envision Congress helping bail out the cruise lines.  Given that cruise line stocks outperformed the market as whole today, on a day when the market did very well, I have the suspicion that there's something in the pending legislation for the cruise lines. 

 

 

If there is anything done, I hope it is a high interest, well guaranteed loan with priority claim against assets.

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15 hours ago, arbiocanpion said:

In other theme i follow one of your spotify playlists (Dance 90 -00!)  and i want asked to you if you would add some other songs of the genre.

 

A bit off topic. But what do you have in mind? How did you find it?

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4 minutes ago, Extra Kim said:

A bit off topic. But what do you have in mind? How did you find it?

I find your facebook profile with your spotify username and i explained all the story by inbox, i know the situation its so weir but i promise that my only objective its the achieve to add new songs to your playlist.

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Although Congress hasn’t passed the $500 billion bailout bill yet, cruise line stocks are surging this afternoon:  18% CCL (Carnival) up 17%, NCLH (Norwegian) up 23%, and RCL (Royal Caribbean) up  25%.

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18 minutes ago, Jim9310 said:

Although Congress hasn’t passed the $500 billion bailout bill yet, cruise line stocks are surging this afternoon:  18% CCL (Carnival) up 17%, NCLH (Norwegian) up 23%, and RCL (Royal Caribbean) up  25%.

 

That's obviously good, but no where near what they have gone down recently. Of course you can say the same thing about the market as a whole.

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I believe that one issue in this decision will be future  demand.  Will demand for cruises, especially longer cruises, be reduced over the next few years to the point where the issue becomes what to do with the surplus of cruise ships and the financial implications of a financed asset that has lot value and cannot be made operational.  

 

I do not know the answer to this question. Cruise lines are not like airlines.  They are hardly a necessity and will be the last item on many peoples spend plans, if they even make the list given the negative press.  How do you bail out an industry that could be facing a major drop in demand and increase in capacity for years to come.

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On 3/24/2020 at 8:49 AM, drsel said:

Agreed, cruises are not essential.

What actually happened to the airlines and Cruises after 9/11 and 2008?

Which particular Airlines and cruise lines went bankrupt?

How much did airfares and Cruise fares crash

 

 

What was missing from 9/11 and 2008 was stigma that applied exclusively to cruise lines.  The images of the Diamond Princess won't die easily.   It's not news that cruise ships often facilitated the spread of viruses but COVID-19 takes it to a whole new level. 

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