SS/RCCL Finances: Improving, Options, Questions??!!

[jpalbny]

1 hour ago, Observer said:

In fact, there is probably room/demand for multiple effective vaccines.  This should not be a zero sum game.

 

I'll have one of each, thanks!

[Observer]

1 minute ago, jpalbny said:

 

I'll have one of each, thanks!

 

Actually, your comment (in jest, of course) points to a real challenge facing society once one or more vaccines are developed, demonstrated to have efficacy, and are manufactured.  How will they be distributed?  Who will have priority in receiving them?  For example, if only one cohort can be vaccinated, would one vaccinate crew or guests first?  Will wealthy nations monopolize the inevitably limited supply?  Etc. Etc.

[Stumblefoot]

3 hours ago, Observer said:

...a real challenge facing society once one or more vaccines are developed, demonstrated to have efficacy, and are manufactured.  How will they be distributed?

And then, of course, what happens when the virus mutates and the vaccine is less than 75% or 50% effective?  We see this happen each year with the seasonal flu.  Reports out of Hong Kong say the virus has already gone through four or five mutations already there.

[TLCOhio]

16 hours ago, Stumblefoot said:

Considering virtually all travel related companies rose today, the rise is linked to Moderna's release of data last night published by the New England Journal of Medicine that showed the company’s coronavirus vaccine produced a “robust” immune response, or neutralizing antibodies in every participant in a controlled test.

 

Great above points, comments and follow-ups, regarding the "MAYBE" for a vaccine getting potentially closer.  If and if??!!.  Cute comments on taking a couple of different vaccines.  How would that work?  And, for how long would it be for giving solid protections?  Many different questions.

 

From the Financial Times yesterday, they had this headline: “Carnival taps bond market for another $1.3bn to stay afloat” with these highlights: “Carnival Corporation raised a further $1.3bn secured against its fleet of ships on Wednesday, as the cruise operator seeks to steady itself while burning through more than half a billion dollars per month. The world’s largest cruise operator has suffered after the outbreak of coronavirus caused sickness and death on several of its vessels and forced the cancellation of voyages.  The Miami-headquartered company has already paid a hefty price to raise over $10bn of cash. In April it offered an interest rate of 11.5 per cent on $4bn of secured bonds backed by the company’s assets, including 83 of its ships.  It has now used the same collateral to sell a 'second lien' bond on Wednesday, which takes priority over about $11bn of unsecured borrowings but stands behind first lien creditors — the holders of the bonds sold in April — in the event of bankruptcy.  The company hopes the latest cash injection will help it survive until it can emerge from the crisis and begin operating cruises once more.  Last week the company predicted that it will consume cash at a rate of $650m per month for the second half of this year. That estimate is down from roughly $1bn when the last bond deal was announced, after the company laid off and furloughed staff and announced plans to sell or recycle some ships in its fleet.”

 

Complicated financing??!!  And at these high interest rates that adds to their cash-flow challenges.  Also today, NCL did another major borrowing to maintain their cash flow.

 

Full story at:

https://www.ft.com/content/25da30c9-8c45-42fc-8fbe-fc1f32c9bc4a

 

THANKS!  Enjoy!  Terry in Ohio

 

Dubrovnik!  Nice visual samples, tips, details, etc., for this super scenic location. Over 47,384 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

[TLCOhio]

10 hours ago, Stumblefoot said:

And then, of course, what happens when the virus mutates and the vaccine is less than 75% or 50% effective?  We see this happen each year with the seasonal flu.  Reports out of Hong Kong say the virus has already gone through four or five mutations already there.

 

From Kaiser Health News this morning, they had this headline: “A Coronavirus Vaccine: Where Does It Stand?” with these highlights: “More than four months into the coronavirus pandemic, how close are the U.S. and the world to a safe and effective vaccine? Scientists say they see steady progress and are expressing cautious optimism that a vaccine could be ready by spring.  As of early July, roughly 160 vaccine projects were underway worldwide, according to the World Health Organization.  Generally, a vaccine trial has several phases. In an initial phase, the vaccine is given to 20 to 100 healthy volunteers. The focus in this phase is to make sure the vaccine is safe, and to note any side effects.  In the second phase, there are hundreds of volunteers. In addition to monitoring safety, researchers try to determine whether shots produce an immune-system response.  The third phase involves thousands of patients. This phase continues the goals of the first two, but adds a focus on how effective the vaccine is in protecting people exposed to the pathogen, in this case the coronavirus. This phase also collects data on more unusual negative side effects.   In ordinary circumstances, these phases take years to complete. But for the coronavirus, the timeline is being shortened. This has spurred more public-private partnerships and significantly increased funding.  At a time of rising public skepticism of government and vaccines, the Food and Drug Administration recently released additional guidelines on vaccine effectiveness. The new guidance requires vaccines to prevent or decrease the severity of the disease at least 50% of the time if they are to win the agency’s approval.”

 

Not sure that I like reading about only a 50% effectiveness to be "good enough".  Not quick, simple or easy.  Many more good details and background items are in this report from a respected health information source.

 

Full story at:

https://khn.org/news/a-coronavirus-vaccine-where-does-it-stand/

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Many visuals, details from two visits in a city with great history, culture and architecture.  Now at 35,665 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

[clo]

On 7/16/2020 at 9:00 AM, TLCOhio said:

Terry in Ohio

Please know that I mean no disrespect to you but have a couple of questions. (I visited SS for the first time yesterday.) One: I find your blue font difficult to read and wonder why you use it. Two: I've only seen a few of your posts but you seem to always wind up posting a link to some other travel not at all related to the thread where you've posted. Just curious. TIA.

[Reef Knot]

No surprise to read that Q2 figures are no better:

From the Times today "Cruise and Hotel giants hit by brutal lockdown losses

Two of the largest hospitality companies in the world have reported crushing losses.

Royal Caribbean, the cruise operator, reported a net loss of $1.64 billion for the second quarter of this year, a swing of more than $2 billion from the profits it reported for the same period last year of $472 million."

The article goes on to report that RCL is burning through $290 million a month and could give no guidance for the full year.

It goes without saying that these are unprecedented times.

 

 Even though airlines are slowly getting planes back in the air British Airways have just gone through with 12,000 redundancies. Tough but deemed necessary to get through this crisis. It is obviously going to be an even longer road back for the cruise industry.

 

 

 

[philipb]

On 7/16/2020 at 4:49 PM, TLCOhio said:

 

From the Financial Times yesterday, they had this headline: “Carnival taps bond market for another $1.3bn to stay afloat” with these highlights: “Carnival Corporation raised a further $1.3bn secured against its fleet of ships on Wednesday, as the cruise operator seeks to steady itself while burning through more than half a billion dollars per month. The world’s largest cruise operator has suffered after the outbreak of coronavirus caused sickness and death on several of its vessels and forced the cancellation of voyages.  The Miami-headquartered company has already paid a hefty price to raise over $10bn of cash. In April it offered an interest rate of 11.5 per cent on $4bn of secured bonds backed by the company’s assets, including 83 of its ships.  It has now used the same collateral to sell a 'second lien' bond on Wednesday, which takes priority over about $11bn of unsecured borrowings but stands behind first lien creditors — the holders of the bonds sold in April — in the event of bankruptcy.  The company hopes the latest cash injection will help it survive until it can emerge from the crisis and begin operating cruises once more.  Last week the company predicted that it will consume cash at a rate of $650m per month for the second half of this year. That estimate is down from roughly $1bn when the last bond deal was announced, after the company laid off and furloughed staff and announced plans to sell or recycle some ships in its fleet.”

 

 

 

These numbers are staggering. It puts into question whether the 3 main cruise giants can survive the pressure on their balance sheets caused by the current scale of losses and monthly 'cash burn'. I spent the last 20 years of my professional career as an insolvency specialist, and I don't like what I see in the current numbers.

[UKCruiseJeff]

4 hours ago, philipb said:

 

These numbers are staggering. It puts into question whether the 3 main cruise giants can survive the pressure on their balance sheets caused by the current scale of losses and monthly 'cash burn'. I spent the last 20 years of my professional career as an insolvency specialist, and I don't like what I see in the current numbers.

 

🙂

 

You probably feel the degree of loneliness attatched to feeling like you are the only only lunatic left in the asylum.  I think you'll find in time after all of the pennies finally drop that your opinions were right.

 

Cruise lines are putting off the inevitable in the hope that "something turns up" by filling their filing cabinets with FCCs and are buying new filing cabinets to fill with FCCs like it's going out of fashion.  FCCs are not cash.  They are the opposite of cash.

 

People seem to think the cruise lines problems end when they can start re-cruising.  The absolute opposite is true.  The problems accelerate rapidly when they restart. They then have ships that are "smaller", much more expensive to operate with more uncertanties and obligations and are filled with almost entirely with people who haven't handed over fresh cash with little fresh cash being generated to actually run the business. So they have smaller ships requiring a heap more cash to operate and have no cash input to fund operations. 

 

Some even think a vaccine is a magic bullet that will save cruise lines. I have no idea how they think the cashflow problem gap is cured by a vaccine.

 

It seems to me that wishfull thinking has misguided far too many.

 

But what do you and I know.  Sensible people recalibrate their aspirations based on prudent evaluations.   🙂

Edited August 12, 2020 by UKCruiseJeff

[Tothesunset]

Yes, I think cruisers are riding a wave of optimism and wishful-thinking. However, each is entitled to their own vision of the future it's just that my vision doesn't include being a creditor of a defunct industry. 

[UKCruiseJeff]

1 minute ago, Tothesunset said:

Yes, I think cruisers are riding a wave of optimism and wishful-thinking. However, each is entitled to their own vision of the future it's just that my vision doesn't include being a creditor of a defunct industry. 

 

This is true of all life.  This is an existential change to the way we live.  It might blow over and be seen as a temporary blip in our lives but there is an equal chance that it will not.  I'm not seeing sufficient realism.

[brimary]

1 hour ago, Tothesunset said:

Yes, I think cruisers are riding a wave of optimism and wishful-thinking. However, each is entitled to their own vision of the future it's just that my vision doesn't include being a creditor of a defunct industry. 

What a beautiful simple summary of such a complex situation.My vision is exactly the same as yours.Stay safe!

[philipb]

1 hour ago, UKCruiseJeff said:

 

People seem to think the cruise lines problems end when they can start re-cruising.  The absolute opposite is true.  The problems accelerate rapidly when they restart. They then have ships that are "smaller", much more expensive to operate with more uncertanties and obligations and are filled with almost entirely with people who haven't handed over fresh cash with little fresh cash being generated to actually run the business. So they have smaller ships requiring a heap more cash to operate and have no cash input to fund operations. 

 

This is precisely the issue. How does it elude the investment gurus?

[TLCOhio]

2 hours ago, UKCruiseJeff said:

People seem to think the cruise lines problems end when they can start re-cruising.  The absolute opposite is true.  The problems accelerate rapidly when they restart. They then have ships that are "smaller", much more expensive to operate with more uncertanties and obligations and are filled with almost entirely with people who haven't handed over fresh cash with little fresh cash being generated to actually run the business. So they have smaller ships requiring a heap more cash to operate and have no cash input to fund operations.  Some even think a vaccine is a magic bullet that will save cruise lines. I have no idea how they think the cashflow problem gap is cured by a vaccine.

 

Agree with the savvy and wise UK Jeff that restarting cruising will require serious money and will not instantly yield a positive cash flow.  Those start-up investments will be sizable and go on for many, many weeks.  Many other good comments, questions and follow-ups regarding the cruise lines and their challenged finances have been posted on this thread.    

 

In part I agree with Tothesunset that I would not want to be standing in a long line as a foreign-based cruise line customer waiting for my five-figure refund.  It was expressed well: "each is entitled to their own vision of the future it's just that my vision doesn't include being a creditor of a defunct industry."  However, I do not believe that the industry is or will be "DEFUNCT".  Some will survive.  Some will crash and burn.  Most all will change significantly to adjust to changing market, customer and health/safety needs.  It's hard to make a blanket prediction.  There are a variety of audiences and customer interests.  It's evolving!!  With many twists and turns ahead.  Many adjustments and re-engineering steps will be required to survive. 

 

From Barron's, the sister publication of the Wall Street Journal this morning, they had this headline: “Royal Caribbean Secures a New $700 Million Credit Line” with these highlights: “In a move to bolster its liquidity, Royal Caribbean Group has secured a $700 million credit facility, the company announced Wednesday.  For Royal Caribbean and its peers, having sufficient liquidity to stay afloat with cruise sailings suspended is a key focus. As of June 30, Royal Caribbean’s liquidity totaled about $4.1 billion.”

 

How much liquidity is enough and will work for the next year or two?  That's the multi-billion-dollar mystery!!  How do you want to bet?

 

Full story at:

https://www.barrons.com/articles/royal-caribbean-secures-a-new-700-million-credit-line-51597243590?adobe_mc=MCMID%3D49586136100231753311353363585221703500|MCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg|TS%3D1597251697

 

THANKS!  Enjoy!  Terry in Ohio

 

Lisbon, NWSpain, Bordeaux/Brittany: Live/blog, June 2017 from Portugal to France along scenic Atlantic Coast on the Silver Spirit.  Now at 30,990 views.  Many interesting pictures, details for history, food, culture, etc.:

www.boards.cruisecritic.com/showthread.php?t=2511358

[TLCOhio]

As related to the cruise lines and their finances, getting refunds has always been a point of either concern or question.  

 

From the Sun-Sentinel in South Florida/Fort Lauderdale this morning, they have this headline: “Months later, angry consumers still waiting for refunds from canceled cruises” with these highlights: “Months after the coronavirus pandemic shut down cruising, customers are still complaining that they still haven’t received refunds for prepaid fares and fees.  It’s a question that continues to clog cruise lines’ social media pages, review sections of websites operated by Yelp and Better Business Bureau, and email accounts of consumer-focused travel websites such as The Points Guy. 'We have been getting a stunning amount of complaints from readers about this,' said Gene Sloan, senior cruise and travel reporter for The Points Guy, a travel advice site. 'They come in over our tips line and directly to me by email. At least two of every three emails I get from readers these days are about missing refunds.' ”  

 

Much of this article focuses on problems with the MSC Cruises that gets a highly-negative "F" from the Better Business Bureau.  Here is more from this lengthy reporting that includes comments on Royal Caribbean, the Silversea parent: "Sloan says he believes cruise line representatives who say they’ve have been overwhelmed by the volume of refund requests. Royal Caribbean and its affiliated lines have canceled more than 1,500 sailings, 'some on ships that carry 6,000 people.  That’s a lot of refunds to process. But cruise lines are doing a terrible job of communicating the situation to customers, and it’s causing real angst, It’s damaging their reputation and could cause long-term damage to their brands. ' he said."

 

Here are some good, positive specifics from their story: "Royal Caribbean spokesman Jonathon Fishman said 'majority' of that company’s refund requests are taking less than 30 days. The Better Business Bureau gives Royal Caribbean and Carnival its highest rating, A+, despite recording hundreds more complaints than the smaller MSC Cruises. For those companies, the bureau’s site notes no examples of unaddressed complaints or delays in responding."  

 

To be honest, however, saying a "MAJORITY" of the refunds have been processed in 30 or less days sounds good, maybe, if and if.  But do the refunds taking more than 30 days constitute 10%, 20%, 30% or 40% of that large total?  And what happens if this world-wide Covid-19 challenge limiting a re-start of cruises goes on and on . . . for months and months longer than what was expected?

 

Full story at:

https://www.sun-sentinel.com/coronavirus/fl-bz-consumers-still-await-cancelled-cruise-refunds-20200814-5eq2vzfa7na5xgb7xsi5xzq75e-story.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Panama Canal? Early 2017, Fort Lauderdale to San Francisco adventure through Panama Canal.  Our first stops in Colombia, Central America and Mexico, plus added time in the great Golden Gate City. Now at 30,029 views.

http://boards.cruisecritic.com/showthread.php?t=2465580

[Bucephalus53]

TLC, as if 2020 couldn't get any worse. Now no Buckeyes to watch. 

[mrlevin]

15 hours ago, Bucephalus53 said:

TLC, as if 2020 couldn't get any worse. Now no Buckeyes to watch. 

 

 

Buckeye Tree

 

Go AGGIES!  Who will be playing football unlike the wimps up north. 😉

 

 

Edited August 15, 2020 by mrlevin

[Bucephalus53]

I hope you're right my friend. 

[TLCOhio]

39 minutes ago, mrlevin said:

Go AGGIES!  Who will be playing football unlike the wimps up north.

 

Appreciate the fun posts from our Texas and Ohio CC Board friends.  For college football, it is not just what the Big Ten did.  It's also the major PAC-12 conference out in the west.  Plus, many others such as the Mid-American, Big East, Big Sky, Ivy League, etc.,  conferences that have stopped their fall sports, including football. 

 

As to being "wimps" . . . versus . . . SMART, SAVVY people, only time will tell.  As Major League baseball is now having a number of games cancelled due to Covid-19 flare up, my predictions is that by later September and October, there will a decent number of teams who must face serious questions as to whether they quarantine players and staff, skip playing some games, etc., as infections happen either on their campuses and/or for their teams.  Many questions!!  Few solid answer for all of the "what ifs", etc.  

 

It's far from over and all decided as of mid August!!  Many more events and challenges will be happening for the Big-12 (with only ten teams, but of course the Big 10 has fourteen teams).  Why can't these college folks count accurately??  Also, the Southeast Conference (SEC) has teams from locations such as Missouri, etc.  And the Atlantic Coast Conference has teams from places far away from what their ocean name implies (such as Notre Dame, Pittsburgh and Syracuse).  

 

More uncertainty is totally certain!!!  Right??  Isn't it kind of like the challenges facing the cruising and travel industries?

 

THANKS!  Enjoy!  Terry in Ohio

 

From late 2018, see “Holy Lands, Egypt, Jordan, Oman, Dubai, Greece, etc.”, with many visuals, details and ideas for the historic and scenic Middle East. Now at 18,618 views.  Connect at:

www.boards.cruisecritic.com/topic/2607054-livenautica-greece-holy-lands-egypt-dubai-terrypix’s/

[QueSeraSera]

The potential damage to athletes' hearts is part of the discussion here in ACC territory.  I do not understand the long term effects of this da**ed virus, but wouldn't want heart damage for anyone. 

I'd miss football certainly, but can deal with it as long as things get sorted out in time for ACC basketball...

[cruiseej]

17 hours ago, QueSeraSera said:

The potential damage to athletes' hearts is part of the discussion here in ACC territory.  I do not understand the long term effects of this da**ed virus, but wouldn't want heart damage for anyone. 

I'd miss football certainly, but can deal with it as long as things get sorted out in time for ACC basketball...

 

A big part of the problem -- or the certain uncertainty, as Terry correctly calls it -- is that the long term effects of having the virus are not yet understood. Are people who test positive but seem asymptomatic completely unaffected, now and into the future? Doctors and scientists just don't know. Are people who have symptoms and appear to recover fully recovered? Again, the doctors don't know. Research shows the disease attacks more than just the respiratory system, affecting multiple organs with blood clots and inflammation. 

 

Mayo Clinic COVID-19 expert Dr. Gregory Poland says: "We're really seeing a number of reports of people who report long-term fatigue, headaches, vertigo (and), interestingly enough, difficulties with cognition, hair loss, cardiac issues, and diminished cardiorespiratory fitness. And I think what we're going to find out is that a large portion ― not all, but a large portion of that ― is likely to relate to the significant cellular-level damage that this virus can cause."  Some of those possible long-term effects can affect even patients who are asymptomatic or have mild cases of COVID-19. "I think it's an argument for why we take this disease so seriously," says Dr. Poland. "People who are thinking, especially young people: '(It's a) mild disease, you know. I might not even have any symptoms, and I'm over it.' Whoa. The data is suggesting otherwise. There's evidence of myocardial damage, cardiomyopathy, arrhythmias, decreased ejection fractions, pulmonary scarring and strokes. And then in the more acute phase, extending out for a month or two, has been this really interesting issue of coagulation abnormalities, which have been responsible for both small-vessel and large-vessel arterial and venous occlusions. So this can be a really wicked virus in some people." 

[TLCOhio]

52 minutes ago, cruiseej said:

A big part of the problem -- or the certain uncertainty, as Terry correctly calls it -- is that the long term effects of having the virus are not yet understood. Are people who test positive but seem asymptomatic completely unaffected, now and into the future? Doctors and scientists just don't know. Are people who have symptoms and appear to recover fully recovered? Again, the doctors don't know. Research shows the disease attacks more than just the respiratory system, affecting multiple organs with blood clots and inflammation.   Mayo Clinic COVID-19 expert Dr. Gregory Poland says: "We're really seeing a number of reports of people who report long-term fatigue, headaches, vertigo (and), interestingly enough, difficulties with cognition, hair loss, cardiac issues, and diminished cardiorespiratory fitness.

 

Appreciate these great above comments and the follow-up from cruiseej.  Very helpful and interesting, especially as to the Mayo Clinic expert for his views on this challenging situation.  Very good insights from QueSeraSera.  

 

Below are the stock charts from the past month for the three major cruise line owners. There have been many ups and down, but most recently, things have been generally more upward.  BUT, these stocks are long ways from their high's earlier this year.  Generally, things seem most positive, in the eyes of Wall Street, for Royal Caribbean compared to their two largest competitors.  

 

With higher stock values, it is easier for them to borrow more money, float added stock, etc.  Late last week, Carnival Corporation announced pricing of $900 million in second-priority senior secured notes that will be due in 2027.  Today, there is cash to stay afloat.  But, by February 2021, what will be there cash burn, cash flow and level of consumer confidence??  Many questions ahead. 

 

The WSJ newspaper is at this location, but their "pay-wall" is fairly tight and limited in not allowing non-subscribers to have access:

https://www.wsj.com/market-data/quotes/CCL

 

THANKS!  Enjoy!  Terry in Ohio

 

Completed last summer Calgary, Jasper/Banff National Parks, Western Canada Rocky Mountaineer rail adventure, Vancouver, sailing up to Alaska, post-cruise excursion to Denali, etc.  Many visuals and details from our first in these scenic areas!  Live/blog at: 

 

 

From the Wall Street Journal today, here are the stock value charts during the past month for the three major cruise operators.:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

[Observer]

On 8/12/2020 at 8:44 AM, UKCruiseJeff said:

People seem to think the cruise lines problems end when they can start re-cruising.  The absolute opposite is true.  The problems accelerate rapidly when they restart. They then have ships that are "smaller", much more expensive to operate with more uncertanties and obligations and are filled with almost entirely with people who haven't handed over fresh cash with little fresh cash being generated to actually run the business. So they have smaller ships requiring a heap more cash to operate and have no cash input to fund operations. 

 

 

I agree that the cruise lines face very real challenges -- and, given the state of science, uncertainty.  However, I think that this analysis underestimates the pent-up demand/desire for cruising.  Once cruising resumes -- importantly, without outbreaks of COVID -- one can imagine a flood of bookings (and "fresh cash"/"cash input") from people eager to get back afloat.  I am one of those eager to sail again, and I know many others. 

[dawntrdr]

1 hour ago, Observer said:

one can imagine a flood of bookings (and "fresh cash"/"cash input") from people eager to get back afloat.  I am one of those eager to sail again, and I know many others.

 

Observer makes a good point.  The question has been raised as to how a vaccine solves cash flow/burn problems.  It does because as soon as an effective vaccine (hopefully, a number of vaccines) becomes viably and widely available, people will start making plans again and that brings new cash in.  I'd be very surprised if the cruise lines don't already have a pricing model researched for how this news will affect the supply and demand.   I believe RCL's Mr. Fain when he says there is a pent-up demand.  You don't have to look any further than the pictures of the people who flocked to bars and restaurants as soon as the restrictions were loosened a little bit.  Those crowds certainly demonstrated a pent-up demand for fun, food and society.

[UKCruiseJeff]

1 hour ago, Observer said:

 

I agree that the cruise lines face very real challenges -- and, given the state of science, uncertainty.  However, I think that this analysis underestimates the pent-up demand/desire for cruising.  Once cruising resumes -- importantly, without outbreaks of COVID -- one can imagine a flood of bookings (and "fresh cash"/"cash input") from people eager to get back afloat.  I am one of those eager to sail again, and I know many others. 

 

I genuinely hope it turns out as you see it rather than I do.  You haven't provided any calibrated presumptions to explain your wishful thinking of a "flood of bookings" or where the capacity to meet that "flood" will come from.  I'm not clear you have understood the future commitment FCC represents on the restart scenario.   But I'll try and flesh out my own to see if it explains my views or not. 

 

It seems to me that all of the pent up demand you believe in will come from existing cruisers and very little from first-time cruisers.  Why would someone who has never cruised before decide that what they must now do is take a first-time cruise keeping in mind the confidence hit cruising has taken.  If you disagree with this - I'd be interested to hear why.

 

This implies the pent up demand will be from a group of people who had already plannedand probably booked  cruises who have had them cancelled.  That seems to me to mean the the pent up demand will be largely customers with FCC. And they will want to use FCC as quickly as possible.  In fact many cruise line rules rather mandate it.

 

We are told that around 50% of cancelled cruisers take refunds and the other 50% take FCC.  If each new cruise has a planned 70% occupancy for distancing purposes and lets say that every one of those cabins / suites are sold to that capacity (unlikely ? ......)  then that means that 50% out of the 70% will be FCC.  So when cruising restarts - then in very simply terms that for every month that has been cancelled each new month from restart of new cruises mirrors each cancelled months capacity.  For clarity - to put it another way for every month that you deplete your reserves by giving 50% refunds but book 50% FCCs then each new month you restart implies a need for a full fleet running for every month mirroring each cancelled month.  Otherwise you are trying to find the whole company from 20% cash payers on a small nuumber of cruise ships. And this will only provide the simplistic but optimistic funding I described.  So if you have cancelled cruises from March to November and you restart cruises from December with a full cruise fleet at "full capacity" then the first 9 months at restart will be 50% full of people using FCC and 20% paying.    In this ideal scenario you are financing after restart ALL overhead and operations for dead capacity with a cash input of 20% of cabin stock. And that is a perfect result.

 

In very simple terms, they have closed down a cruise line with all ships sailing and given 50% of those customers FCC and will start funneling that 50% of 100% capacity to a future say 70% of a slowly reopening cruises of a highly reduced number of ships capacity.  And they will still be refunding those that asked for cash.  I'm unable to see how simple optimisim squares it from a practical cash-flow viewpoint.

 

But you are not going to have every cruise ship in a fleet starting at restart.  So if you do not relaunch all ships as soon as you start using it might mean that for every month you cancelled everything you might need two months or more of restart.  And that cash will never be enough.  This implies no false starts.  No further refunds.  And no higher unexpected costs. 

 

These rambling ponderings aren't easy to explain and very easy to dismiss as I think you might do .  But I am interested in hearing contra-argument.

Edited August 17, 2020 by UKCruiseJeff