Possible Bankruptcy??

[Times Prince]

I heard some of the same arguments about the cruise industry being in trouble after 9/11.  We cruised then despite fears of terrorism.   This time will be more serious and how the world handles the debt problem is a real question.  Chapter 11 reorganization may be probable where the debt is significantly reduced.  There will be some hard decisions by corporations concerning how to come through this problem, and I don't know that anyone knows what those decisions might be.

 

As far as cruising, and even air travel I believe there will be an ongoing need, although it may be at reduced levels.

 

Anyone who has traveled on ships with Noro know that it is possible to do this with a degree of safety.  Coronavirus however needs to have a functional anti-virus before it is truly within the realm of safety to travel anywhere, land, sea, or air.  Without that passengers with pre-existing health issues might be highly reluctant to cruise.

[Gracie115]

34 minutes ago, eclue said:

It will blow through but it will be more like several months..

 

 

Yes, at the very least.

[jimmieg]

RCI today announcdd a secured line of credit for 2.2 Billion for 364 days, renewable for an additional 364 days. This is in addition to ship builds they say are funded. I assume same would be available to CCL.

 

So $$ is out there for cruiseline operational purposes. I just don't know what assets besides ships they have for security(real estate in Miami? Bahamas property?)

 

So, what lender would want a ship or two if things go south? Seems like all lines face the same challenges.

[Tab_Hardy]

When are those refunds supposed to go out? They didn't give any indication of the timeframe on the online form. I feel like they're slow-walking it to avoid paying out a lot of capital in the near term. 

[Coral]

2 minutes ago, Tab_Hardy said:

When are those refunds supposed to go out? They didn't give any indication of the timeframe on the online form. I feel like they're slow-walking it to avoid paying out a lot of capital in the near term. 

It was 30 days and now 60 days.

[jimmieg]

2 minutes ago, Tab_Hardy said:

When are those refunds supposed to go out? They didn't give any indication of the timeframe on the online form. I feel like they're slow-walking it to avoid paying out a lot of capital in the near term. 

Updated March 20, 2020 5:00PM PT

Processing Time for Refunds

Thank you for your patience during this time. Given the volume of refund requests and the care being dedicated to ensure each guest’s request is processed accurately and in a coordinated manner, please allow for approximately 60 days for refunds to be processed. All refunds will be processed in due course, but delays should be anticipated. Please allow sufficient time for us to manage this process and know we are doing everything in our power to expedite where possible.

[caribill]

From the CCL Corp Form 8-K report to the SEC 3/19/20

Outlook

For the first half of 2021, booking volumes since the Corporation's last conference call in mid-December through March 1, 2020, have been running slightly higher than the prior year. Also for the first half of 2021 and during the two weeks ended March 15, 2020, the Corporation booked 546,000 Occupied Lower Berth Days (“OLBD”), albeit considerably behind the prior year pace. As of March 15, 2020, cumulative advanced bookings for the first half of 2021, are slightly lower than the prior year.

 

Wave season started strong with booking volumes for the three weeks ending January 26, 2020, running higher than the prior year for the remaining three quarters of the year on a comparable basis. For the seven week period beginning January 26, 2020 and ending March 15, 2020, booking volumes for the remainder of the year were meaningfully behind the prior year on a comparable basis as a result of the effects of COVID-19. As of March 15, 2020, cumulative advanced bookings for the remainder of 2020, are meaningfully lower than the prior year at prces that are considerably lower than the prior year on a comparable basis, reflecting the impact of COVID-19.

The Corporation previously announced a voluntary, temporary pause of its global fleet operations across all brands. The Corporation believes the ongoing effects of COVID-19 on its operations and global bookings will have a material negative impact on its financial results and liquidity. The Corporation also believes the effects of COVID-19 on the shipyards where its ships are under construction, will result in a delay in ship deliveries. The Corporation is taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing. Given the uncertainty of the situation, the Corporation is currently unable to provide an earnings forecast, however it expects a net loss on both a U.S. GAAP and adjusted basis for the fiscal year ending November 30, 2020.

[Fletch1]

On 3/22/2020 at 11:19 AM, trrn2016 said:

Is anyone else concerned that we might not get our refunds if they go bankrupt??

 

Nah. She'll be right mate! 

[downsmead]

 The Corporation believes the ongoing effects of COVID-19 on its operations and global bookings will have a material negative impact on its financial results and liquidity.
 

Slight understatement if ever I saw one!!

(I realise it is usual terminology for these reports).

Edited March 24, 2020 by downsmead

[nbsjcruiser]

15 hours ago, caribill said:

 

Although what you say is true, there are many USA jobs in auxiliary work that depend on the cruise industry.

 

The economies of port cities such as Fort Lauderdale, Miami, Galveston, etc. have many jobs that would not exist without the cruise industry being healthy.

 

From longshoremen to hotels to port check-in personnel to ships' purveyors, many USA jobs are at stake.

 

Of course you raise valid points but it shouldn't stop people asking questions about the behaviour of the cruise lines behaviour as it relates to taxes and bailouts. Look, I'm not an American so I have no dog in the fight when it comes to bailouts but if the federal government is handing out bailouts to cruise lines then it should come with some strings attached. Bring your ships back to the US, start paying taxes and you'll get your bailout otherwise see if Liberia or the Bahamas will bail you out.

 

In 2008 billions went to companies that later participated in massive stock buybacks and CEO pay raises while the employees paid the price and the taxpayers picked up the tab. Look at GM as a prime example. Took the bailout money and has been shutting down car plants and moving jobs to whatever country that will pay workers next to nothing while still producing cars to be sold in mainly North America. Yes GM paid the money back but thousands of their North American employees paid the ultimate price for the bailout anyway.

 

 I just think its time that businesses that use questionable practices to avoid taxes need to take a step back. Worry about your financial bottom line certainly but also take a long look at your moral practices at the same time. To be clear, they wont do that unless its insisted that they do.

[DaKa2002]

5 minutes ago, nbsjcruiser said:

 

Of course you raise valid points but it shouldn't stop people asking questions about the behaviour of the cruise lines behaviour as it relates to taxes and bailouts. Look, I'm not an American so I have no dog in the fight when it comes to bailouts but if the federal government is handing out bailouts to cruise lines then it should come with some strings attached. Bring your ships back to the US, start paying taxes and you'll get your bailout otherwise see if Liberia or the Bahamas will bail you out.

 

In 2008 billions went to companies that later participated in massive stock buybacks and CEO pay raises while the employees paid the price and the taxpayers picked up the tab. Look at GM as a prime example. Took the bailout money and has been shutting down car plants and moving jobs to whatever country that will pay workers next to nothing while still producing cars to be sold in mainly North America. Yes GM paid the money back but thousands of their North American employees paid the ultimate price for the bailout anyway.

 

 I just think its time that businesses that use questionable practices to avoid taxes need to take a step back. Worry about your financial bottom line certainly but also take a long look at your moral practices at the same time. To be clear, they wont do that unless its insisted that they do.

You got that right!  I agree...

[cruzsnooze]

1 hour ago, nbsjcruiser said:

 

Of course you raise valid points but it shouldn't stop people asking questions about the behaviour of the cruise lines behaviour as it relates to taxes and bailouts. Look, I'm not an American so I have no dog in the fight when it comes to bailouts but if the federal government is handing out bailouts to cruise lines then it should come with some strings attached. Bring your ships back to the US, start paying taxes and you'll get your bailout otherwise see if Liberia or the Bahamas will bail you out.

 

 

 

They couldn't survive if they registered in the USA. NCL tried it with 3 ships in Hawaii and had to cut back to one ship. The casino is a major revenue and they can't have it if they register the ships in the US. Drinking age varies by country and is another profit venue for ships. Of course the taxes would be so oppressive the cruise fare wouldn't be able to attract the middle middle.  The minimum wages and hours and overtime would apply and we know that wouldn't work since the crew are from countries with much lower incomes. So it's more then just taxes.

[Mackenzie1]

This article provides a reference to Carnival's liquidity.  All may not be lost:

 

https://seekingalpha.com/article/4333486-liquidity-and-leverage-comparisons-for-cruise-lines-amid-covidminus-19-chaos

[Esprit]

1 hour ago, Mackenzie1 said:

This article provides a reference to Carnival's liquidity.  All may not be lost:

 

https://seekingalpha.com/article/4333486-liquidity-and-leverage-comparisons-for-cruise-lines-amid-covidminus-19-chaos

Encouraging.

We need plenty of positive news not just about cruise lines. Getting fed up with so much negativity from the media. They never want to tell good stories. Where's the balance in reporting anymore!

[nbsjcruiser]

2 hours ago, cruzsnooze said:

They couldn't survive if they registered in the USA. NCL tried it with 3 ships in Hawaii and had to cut back to one ship. The casino is a major revenue and they can't have it if they register the ships in the US. Drinking age varies by country and is another profit venue for ships. Of course the taxes would be so oppressive the cruise fare wouldn't be able to attract the middle middle.  The minimum wages and hours and overtime would apply and we know that wouldn't work since the crew are from countries with much lower incomes. So it's more then just taxes.

 

and you're right which is what is part of what bothers me. Look, I've been on almost 30 cruises. I love it but even I'm beginning to ask myself lots of questions. Are the ships safe for cruising in the coming months? Not unless they find a vaccine. Should cruise ships be allowed to work people 14 hours a day, 7 days a week for 6 months for what they pay those people? Nope. Does my desire to have an affordable vacation trump the pollution these ships generate or the working environment many of their employees work in? Should we really be touring in places like the Galapagos, taking selfies with endangered animals? If not paying taxes is the only way some cruise lines can survive then maybe they need to go anyway.

 

 Got to admit that this entire upsetting affair has me examining what I'm doing and asking myself hard questions.

Edited March 24, 2020 by nbsjcruiser

[Reader0108598]

1 hour ago, nbsjcruiser said:

 

and you're right which is what is part of what bothers me. Look, I've been on almost 30 cruises. I love it but even I'm beginning to ask myself lots of questions. Are the ships safe for cruising in the coming months? Not unless they find a vaccine. Should cruise ships be allowed to work people 14 hours a day, 7 days a week for 6 months for what they pay those people? Nope. Does my desire to have an affordable vacation trump the pollution these ships generate or the working environment many of their employees work in? Should we really be touring in places like the Galapagos, taking selfies with endangered animals? If not paying taxes is the only way some cruise lines can survive then maybe they need to go anyway.

 

 Got to admit that this entire upsetting affair has me examining what I'm doing and asking myself hard questions.

Same here coming up on 30 cruises . I don't think about what any other vacation venue does with workers, they chose to work there . None of my business what they are doing  probably better off than they were at home I pay my tips, keep my cabin clean ,polite and respectful at all times! We have a laugh or two ! When I see them in port I send over a drink, but never talk to them they are on break!!! Live and let live!

 

Edited March 24, 2020 by Reader0108598

[Ride-The-Waves]

20 hours ago, Times Prince said:

I heard some of the same arguments about the cruise industry being in trouble after 9/11.  We cruised then despite fears of terrorism.   This time will be more serious and how the world handles the debt problem is a real question.  Chapter 11 reorganization may be probable where the debt is significantly reduced.  There will be some hard decisions by corporations concerning how to come through this problem, and I don't know that anyone knows what those decisions might be.

 

As far as cruising, and even air travel I believe there will be an ongoing need, although it may be at reduced levels.

 

Anyone who has traveled on ships with Noro know that it is possible to do this with a degree of safety.  Coronavirus however needs to have a functional anti-virus before it is truly within the realm of safety to travel anywhere, land, sea, or air.  Without that passengers with pre-existing health issues might be highly reluctant to cruise.

A largest concern is that cruise lines and travel agents will "restructure" to eliminate debt AND your FCC.  Airlines have done this several times.  

[caribill]

1 minute ago, Ride-The-Waves said:

A largest concern is that cruise lines and travel agents will "restructure" to eliminate debt AND your FCC.  Airlines have done this several times.  

 

No USA airline that "restructured" eliminated customer value such as FF miles, existing paid reservations, etc.

 

And any cruise line that would eliminate existing FCCs, FCDs or other customer payments might as well just go out of business as they would not have any loyal customers anymore.

[PescadoAmarillo]

3 hours ago, Esprit said:

We need plenty of positive news not just about cruise lines. Getting fed up with so much negativity from the media. They never want to tell good stories. Where's the balance in reporting anymore!

I disagree completely.  Balance is NOT a weighting of positive vs. negative reporting.  It never has been and hopefully never will be.  Balance is an honest assessment of facts, and, regardless of what anyone tries to tell us, there are not alternative facts. There are facts. Period.

 

I don't need the  media to blow sunshine up my skirt.  I don't want to hear about what "might" be, or what "might" work or what "feelings" some uninformed leader is having. I want the facts.  And if the facts are currently all negative, so be it.  That's life in the real world.  

[npcl]

5 hours ago, cruzsnooze said:

They couldn't survive if they registered in the USA. NCL tried it with 3 ships in Hawaii and had to cut back to one ship. The casino is a major revenue and they can't have it if they register the ships in the US. Drinking age varies by country and is another profit venue for ships. Of course the taxes would be so oppressive the cruise fare wouldn't be able to attract the middle middle.  The minimum wages and hours and overtime would apply and we know that wouldn't work since the crew are from countries with much lower incomes. So it's more then just taxes.

Actually the US does not need them to register their ships in the US, all the US needs to do is to exclude the cruise lines from IRS section 883.  That would require them to pay US taxes on income from the US, including all fares, and other spend from people residing in the US.

 

At a minimum the government should limit exec salaries, take an equity interest, prevent the cruise lines from buying back stock and issuing dividends, as well as making them maintain a cash cushion (not line of credit, but actual cash) at least equal to customer deposits. That would keep customers whole, force a real look at the economics of the business, slow down the rapid building of massive ships that are overwhelming many ports.  It would probably mean some increase in fares but not a huge amount.

 

This is very similar to what was done with the banks.  Now before anyone points out how bad the behavior was of the banks I would like to point out that most of the banks that were the real bad actors, except for AIG, actually did go bankrupt and were purchased by other more sound banks (the funny thing is the FDIC and the fed wanted the more sound banks to buy the bad actor bankrupt ones, but then the government turned around and sued the purchasing banks, not because of what they did, but because of the behavior of the banks that they purchased.  Remember with AIG it went a step further and the CEO and several senior execs were fired and replaced by government approved individuals.

[npcl]

1 hour ago, Ride-The-Waves said:

A largest concern is that cruise lines and travel agents will "restructure" to eliminate debt AND your FCC.  Airlines have done this several times.  

Nope.  Pretty much the only time customers have lost out in an airline restructuring has been when it was a complete BK and the airline went totally out of business.  There have been one or two minor airlines that have gone BK, had their assets purchased out of BK and had someone try and bring them back, sometimes under a different name, seldom successfully.

 

If you are a consumer business and you go BK and impact your customers (deposits, credits, frequent customer benefits) you are pretty much toast, because the customers do not forget. You can restructure debt, wipe out shareholders, sell off assets, etc and recover, but not if you impact customers.

Edited March 24, 2020 by npcl

[sailingskyward]

Echoing the sentiments of other posters, I enjoy cruising but I'm confused why it would be the American government bailing the cruise lines out, when the cruise lines have done everything possible to make sure their business income and business practices fall outside of US jurisdiction. In essence, it would be like Canada bailing out a Peruvian cruise line. Just ludicrous. There are actual American companies who pay taxes in the United States, that I would rather see get a bailout before the cruise lines who make their income here but don't want to pay their fair share of taxes here. 

[Tab_Hardy]

Yeah, they're foreign companies with foreign ships that mostly employ non-American workers. There's absolutely no reason we should be giving them our tax dollars. 

[Coral]

Cruise lines employee thousands of Americans at their headquarters, call centers, hotels, railroads, Gray Line of Alaska, etc.... On top of that, embarkation port cities in the US such as Seattle, FLL, Tampa, etc... greatly benefit from being a port city (hotels, restaurants, site seeing places and transportation companies). Cruise lines buy all of their food from US companies. US cruise ports greatly benefit from cruisers when they stop in these cities (New England, CA Coast, Alaska). This includes tour operators, restaurants, site seeing places, bus drivers, etc... US Airlines benefit bringing people to port cities.

 

The cruise industry does positively affect the US Economy and does generate jobs. 

[pms4104]

1 hour ago, Coral said:

Cruise lines employee thousands of Americans at their headquarters, call centers, hotels, railroads, Gray Line of Alaska, etc.... On top of that, embarkation port cities in the US such as Seattle, FLL, Tampa, etc... greatly benefit from being a port city (hotels, restaurants, site seeing places and transportation companies). Cruise lines buy all of their food from US companies. US cruise ports greatly benefit from cruisers when they stop in these cities (New England, CA Coast, Alaska). This includes tour operators, restaurants, site seeing places, bus drivers, etc... US Airlines benefit bringing people to port cities.

 

The cruise industry does positively affect the US Economy and does generate jobs. 

And there are many American-based companies who also generate jobs and have a positive economic impact ... and they pay U.S. taxes.