RICCruisers Posted April 27, 2020 #26 Share Posted April 27, 2020 Ipee and Phoenix, Thanks for your replies. I’m sure we are all happy we aren’t sitting in the offices on Caribbean Way trying to figure out our next moves. I retired about 8 years ago after working for in sales and marketing in the theme park industry for 35 years. That’s another industry that is also closed down at the present time. I’ve spoken with several of my former colleagues and they too are walking a fine trying to maintain future business and planning for reopening while saving money and keeping staff on the payroll. The biggest unknown is a firm date on when they will be able to open their gates. Link to comment Share on other sites More sharing options...
Baron Barracuda Posted April 27, 2020 #27 Share Posted April 27, 2020 Interesting piece in Barrons this weekend on cruise industry. Includes current cash burn and refund estimates. https://www.barrons.com/articles/cruise-lines-are-burning-through-cash-their-survival-depends-on-luring-back-customers-after-coronavirus-51587741331 Link to comment Share on other sites More sharing options...
Fouremco Posted April 27, 2020 #28 Share Posted April 27, 2020 Yes, an interesting read. Thanks. Link to comment Share on other sites More sharing options...
radarcruiser Posted April 27, 2020 #29 Share Posted April 27, 2020 On 4/26/2020 at 8:45 AM, Jeremiah1212 said: It's not really leveraging Celebrity as a brand. They have essentially just deferred payments. Quantum of the Seas, Anthem of the Seas and Spectrum of the Seas are under the same agreement along with Reflection, Eclipse, Equinox, Solstice and Silhouette. Since a cruise ship itself has very little value is a busted market, it's in the bank's best interest to allow them some breathing room. Good point. The banks would have trouble unloading a repo'd cruise ship at anything near what was owed on it. Better to offer the lendee some flexibility now and gouge them later when times are better. Link to comment Share on other sites More sharing options...
Prost Seattle Posted April 28, 2020 #30 Share Posted April 28, 2020 They always say, when you owe the bank $10,000 you have a problem, when you owe the bank $1,000,000,000 they have a problem. 1 Link to comment Share on other sites More sharing options...
Cruising89143 Posted April 28, 2020 #31 Share Posted April 28, 2020 I read (below) today that NCL is currently getting ready to place ships in cold layup. I expect RCCL to do the same. Richard Fain recently stated that the startup would be slow. They are going to need to be very careful starting out to rebuild confidence in the industry. This includes all of the cruise lines. https://www.seatrade-cruise.com/news/nclh-sees-q1-and-2020-loss-bookings-still-coming-half-canceled-voyages-seek-refunds Link to comment Share on other sites More sharing options...
Rare hcat Posted April 28, 2020 #32 Share Posted April 28, 2020 All interesting articles. If Royal ( Celeb) is good for 7 months of cash burn as noted in the Barrons article (see chart), they may get to final payment dates for anticipated 2021 cruises...which would be positive in terms of cash flow. I googled " cold layup" and came up with this site which is an ad but explains what that is: https://r.search.yahoo.com/_ylt=AwrEzearB6he4QgAZlBx.9w4;_ylu=X3oDMTByOHZyb21tBGNvbG8DYmYxBHBvcwMxBHZ0aWQDBHNlYwNzcg--/RV=2/RE=1588099115/RO=10/RU=https%3a%2f%2fwww.shipserv.com%2fShipServ%2fpages%2fattachments%2f211522%2fCOLD%20VESSEL%20LAY%20UP.pdf/RK=2/RS=S0Z5Sg0keHR92jpg67xfpH56JkI- Either way... looks like a long road back but doable...from my non-expert, non investor consumer perspective Link to comment Share on other sites More sharing options...
chengkp75 Posted April 28, 2020 #33 Share Posted April 28, 2020 9 hours ago, cruisingator2 said: I read (below) today that NCL is currently getting ready to place ships in cold layup. I expect RCCL to do the same. Richard Fain recently stated that the startup would be slow. They are going to need to be very careful starting out to rebuild confidence in the industry. This includes all of the cruise lines. https://www.seatrade-cruise.com/news/nclh-sees-q1-and-2020-loss-bookings-still-coming-half-canceled-voyages-seek-refunds 39 minutes ago, hcat said: All interesting articles. If Royal ( Celeb) is good for 7 months of cash burn as noted in the Barrons article (see chart), they may get to final payment dates for anticipated 2021 cruises...which would be positive in terms of cash flow. I googled " cold layup" and came up with this site which is an ad but explains what that is: https://r.search.yahoo.com/_ylt=AwrEzearB6he4QgAZlBx.9w4;_ylu=X3oDMTByOHZyb21tBGNvbG8DYmYxBHBvcwMxBHZ0aWQDBHNlYwNzcg--/RV=2/RE=1588099115/RO=10/RU=https%3a%2f%2fwww.shipserv.com%2fShipServ%2fpages%2fattachments%2f211522%2fCOLD%20VESSEL%20LAY%20UP.pdf/RK=2/RS=S0Z5Sg0keHR92jpg67xfpH56JkI- Either way... looks like a long road back but doable...from my non-expert, non investor consumer perspective What is being explained by this company is a "warm lay up" since the ships are not completely powered down (deck generator, and crew living onboard), nor are systems protected against corrosion. "Cold lay up" is where you pull the plug on the ship and seal it completely and dehumidify the entire ship. You really cannot do this while a ship is at anchor, except for anchorages well into protected ports like the US Ready Reserve Fleet locations. And I doubt that any cruise ship would actually go into cold lay up, as the cost would be too great. Yes, I expect that most cruise ships are all ready transitioning to "warm lay up" with just the minimum required deck and engine crew, and using just enough power to keep the interior of the ship from excessive humidity and the resulting mold issues. 1 1 Link to comment Share on other sites More sharing options...
Rare hcat Posted April 28, 2020 #34 Share Posted April 28, 2020 (edited) Thank you, as always. How long would it generally take a ship in a warm layup to become ready to cruise again...? Does a " captain" rated individual remain on board..or mostly engineering staff? Edited April 28, 2020 by hcat Link to comment Share on other sites More sharing options...
Rare markeb Posted April 28, 2020 #35 Share Posted April 28, 2020 18 minutes ago, chengkp75 said: What is being explained by this company is a "warm lay up" since the ships are not completely powered down (deck generator, and crew living onboard), nor are systems protected against corrosion. "Cold lay up" is where you pull the plug on the ship and seal it completely and dehumidify the entire ship. You really cannot do this while a ship is at anchor, except for anchorages well into protected ports like the US Ready Reserve Fleet locations. And I doubt that any cruise ship would actually go into cold lay up, as the cost would be too great. Yes, I expect that most cruise ships are all ready transitioning to "warm lay up" with just the minimum required deck and engine crew, and using just enough power to keep the interior of the ship from excessive humidity and the resulting mold issues. I assume there's both a transition time and process to a warm lay up, and a transition time and process back? Any idea what those would look like on a ship the size of say Reflection? It wouldn't be like a carrier where you have reactor start up times (or emergency starts), but I'd think you'd have to get a full engineering crew on board, probably a significant checklist procedure (I'm reasonably confident these things are kind of like jet aircraft; they don't "like" shutting down), and ultimately a lot of engineering and environmental checks across the entire ship before the booze and canapés come out. Link to comment Share on other sites More sharing options...
TeeRick Posted April 28, 2020 #36 Share Posted April 28, 2020 19 hours ago, Baron Barracuda said: Saudi purchases were open market transactions. Carnival received NO new cash. But apparently Carnival did benefit in getting their loans backed by the US Fed bailout. https://www.dailymail.co.uk/news/article-8262745/Carnival-Cruise-Line-raised-6billion-financing-Fed-intervened-save-businesses.html Link to comment Share on other sites More sharing options...
cruise47 Posted April 28, 2020 #37 Share Posted April 28, 2020 Good move the current loan rate have to be lower than their original loan rate. IMO. Link to comment Share on other sites More sharing options...
TeeRick Posted April 28, 2020 #38 Share Posted April 28, 2020 15 hours ago, Baron Barracuda said: Interesting piece in Barrons this weekend on cruise industry. Includes current cash burn and refund estimates. https://www.barrons.com/articles/cruise-lines-are-burning-through-cash-their-survival-depends-on-luring-back-customers-after-coronavirus-51587741331 Thank you. It is nice to have solid financial data as grim as it seems. Better than all of the speculation on these boards. Link to comment Share on other sites More sharing options...
TeeRick Posted April 28, 2020 #39 Share Posted April 28, 2020 1 hour ago, markeb said: I assume there's both a transition time and process to a warm lay up, and a transition time and process back? Any idea what those would look like on a ship the size of say Reflection? It wouldn't be like a carrier where you have reactor start up times (or emergency starts), but I'd think you'd have to get a full engineering crew on board, probably a significant checklist procedure (I'm reasonably confident these things are kind of like jet aircraft; they don't "like" shutting down), and ultimately a lot of engineering and environmental checks across the entire ship before the booze and canapés come out. Yes all that and possibly re-engineered spaces for quarantine, ventilators, etc to meet CDC requirements outlined for setting sail again. Link to comment Share on other sites More sharing options...
Rare markeb Posted April 28, 2020 #40 Share Posted April 28, 2020 2 minutes ago, TeeRick said: Yes all that and possibly re-engineered spaces for quarantine, ventilators, etc to meet CDC requirements outlined for setting sail again. That doesn't sound like hours to me... Hope our resident Chief Engineer comments on the timelines. If that can go weeks, rather than days, then even the most optimistic on this board need to start kicking their cruise dates out by the time for a warm start up. Link to comment Share on other sites More sharing options...
chengkp75 Posted April 28, 2020 #41 Share Posted April 28, 2020 1 hour ago, hcat said: Thank you, as always. How long would it generally take a ship in a warm layup to become ready to cruise again...? Does a " captain" rated individual remain on board..or mostly engineering staff? 32 minutes ago, markeb said: I assume there's both a transition time and process to a warm lay up, and a transition time and process back? Any idea what those would look like on a ship the size of say Reflection? It wouldn't be like a carrier where you have reactor start up times (or emergency starts), but I'd think you'd have to get a full engineering crew on board, probably a significant checklist procedure (I'm reasonably confident these things are kind of like jet aircraft; they don't "like" shutting down), and ultimately a lot of engineering and environmental checks across the entire ship before the booze and canapés come out. I would see the minimum manning for a ship in a relatively exposed anchorage like most of these ships are in, to be Captain, 4 deck officers, about 12 deck crew, 4 or 5 engineering officers and 6-8 engine crew, along with 2-3 galley staff. Because the ships are not in protected anchorages (like up a river, etc) there will need to be enough deck crew to get the ship underway in an emergency. For a cruise ship in warm lay up, the main concern is getting all the rest of the crew back to the ship. Then there would be provisioning, and cleaning, and doing the laundry, and setting up for passengers. Mechanically, the engineering crew will be rotating usage of equipment, so most would be ready to go on short notice (again, to be able to get underway in a hurry). It would take about a week at the outside for engineering to be up and running at full capacity, and probably a week after the hotel staff arrives to get the hotel ready for passengers. 1 Link to comment Share on other sites More sharing options...
chengkp75 Posted April 28, 2020 #42 Share Posted April 28, 2020 11 minutes ago, TeeRick said: Yes all that and possibly re-engineered spaces for quarantine, ventilators, etc to meet CDC requirements outlined for setting sail again. Any redesignation of spaces to meet the CDC's recommendations would add to the time frame, but those are not likely to be permanent requirements, so cruising may not restart until the restrictions are lessened. Link to comment Share on other sites More sharing options...
chengkp75 Posted April 28, 2020 #43 Share Posted April 28, 2020 23 minutes ago, TeeRick said: But apparently Carnival did benefit in getting their loans backed by the US Fed bailout. https://www.dailymail.co.uk/news/article-8262745/Carnival-Cruise-Line-raised-6billion-financing-Fed-intervened-save-businesses.html Actually, the Fed had little to do with it. The Fed bought bonds on the market, all kinds of bonds, not just Carnival (and I don't know that they bought any Carnival bonds), to keep the bond interest rates high. Carnival benefited from this action not because the US government bought any bonds, or backed a loan, but because the propped up bond prices. The majority of Carnival bonds were purchased by the Saudi royal family, and the rest by private investors or funds. Link to comment Share on other sites More sharing options...
Rare hcat Posted April 28, 2020 #44 Share Posted April 28, 2020 Chengkp75 Once again thanks for the exlanations ! Link to comment Share on other sites More sharing options...
Rare markeb Posted April 28, 2020 #45 Share Posted April 28, 2020 16 minutes ago, chengkp75 said: I would see the minimum manning for a ship in a relatively exposed anchorage like most of these ships are in, to be Captain, 4 deck officers, about 12 deck crew, 4 or 5 engineering officers and 6-8 engine crew, along with 2-3 galley staff. Because the ships are not in protected anchorages (like up a river, etc) there will need to be enough deck crew to get the ship underway in an emergency. For a cruise ship in warm lay up, the main concern is getting all the rest of the crew back to the ship. Then there would be provisioning, and cleaning, and doing the laundry, and setting up for passengers. Mechanically, the engineering crew will be rotating usage of equipment, so most would be ready to go on short notice (again, to be able to get underway in a hurry). It would take about a week at the outside for engineering to be up and running at full capacity, and probably a week after the hotel staff arrives to get the hotel ready for passengers. Thanks! With a crew potentially scattered around the world, I'd guess 1-2 weeks to alert and move. Assuming commercial air to the ports is readily available. I'm sure there are recall clauses in the various contracts, especially now, but as you say the main concern is getting the crew back to the ship. Too many years in uniform; everyone always wants to oversimplify the actual people... Link to comment Share on other sites More sharing options...
zitsky Posted April 28, 2020 #46 Share Posted April 28, 2020 Those of you who mentioned Caribbean cruises? I'm sitting on one in December. Why do you think Caribbean cruises are more likely to happen? I haven't looked recently but I imagine there are coronavirus cases all over the region, same as anywhere else. So then doesn't it become waiting for the curve to flatten in some of these countries? I will probably make a decision in September if it is not already canceled by X. Link to comment Share on other sites More sharing options...
Rare C-Dragons Posted April 28, 2020 #47 Share Posted April 28, 2020 (edited) RCCL and NCLH to get relief on some of their ship debt. https://www.travelweekly.com/Cruise-Travel/Cruise-companies-get-relief-on-ship-debt?utm_source=eNewsletter&utm_medium=Email&utm_campaign=eltrcruise&ct=cruise&oly_enc_id=1672G1114645F9V Edited April 28, 2020 by C-Dragons Link to comment Share on other sites More sharing options...
zitsky Posted April 28, 2020 #48 Share Posted April 28, 2020 (edited) Thanks, @C-Dragons, interesting read! I did one cruise on NCL, enjoyed it. Hope they can continue their cruises in the future. Edited April 28, 2020 by zitsky Link to comment Share on other sites More sharing options...
Vagabond Knight Posted April 28, 2020 #49 Share Posted April 28, 2020 (edited) MUSINGS... I would love to see an independent study down the road that analyzed and gave ratings to how the various cruise lines have dealt with the health aspects of the current crisis, their ability to deal with the financial aspects of the crisis, and customer perception of how they've dealt with the communication and general service aspects of this crisis. Also wondering if there is much difference in how the customers of the various brands within a cruise line are being handled, as this could become a factor for some of us in planning cruises in the future. In the past, I've looked at itineraries, "what's included," general reputation and customer satisfaction reviews for cruise lines and other vacation options, and have never really considered the basic financial stability of the company for whom I'm handing over big bucks (well, except for when purchasing a timeshare)... stuff like debt ratio, profitability ratio and cash balance. However, as much of a pain as it would be, I guess that's something to consider in the future if I'm looking to trust a travel company with thousands of prepaid dollars before I receive their product. I always figured the previous customer's rating of the price/product to be good enough, but the current situation tells us those ratings may only be a valid yardstick for how good things are when things are good. Of course, we've been waiting almost the same amount of time for a little mom & pop company called Disney to refund the March payment (a FAR smaller amount of money) for our annual theme park passes. 😉 Edited April 28, 2020 by SunsetPoint Link to comment Share on other sites More sharing options...
Baron Barracuda Posted April 28, 2020 #50 Share Posted April 28, 2020 4 hours ago, TeeRick said: But apparently Carnival did benefit in getting their loans backed by the US Fed bailout. https://www.dailymail.co.uk/news/article-8262745/Carnival-Cruise-Line-raised-6billion-financing-Fed-intervened-save-businesses.html Here's WSJ take on what happened. Synopsis: Deteriorating financials prevented CCL from accessing public debt market forcing them to explore borrowing from vulture hedge funds at rates around 15%. They were spared however when Federal Reserve propped up bond market by making open market purchase of investment grade corporate debt (hard to believe but CCL at bbb- is still investment grade credit). This caused bond market to stabilize and allowed CCL to float their $6B public offerings. Fed did not do this explicitly for CCL, they just benefited along with other investment grade credits. https://www.wsj.com/articles/how-fed-intervention-saved-carnival-11587920400 Link to comment Share on other sites More sharing options...
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