Interesting Yahoo Interview with CCL CEO Arnold Donald

[yerdua]

https://www.yahoo.com/finance/news/carnival-ceo-we-have-been-fighting-for-the-survival-of-the-company-145918763.html

[iancal]

Keep in mind...he only says what he wants us to hear.  That is the gist of corporate communications.

[UPNYGuy]

“We will come out smaller” is corporate speak for some cruise lines under the Carnival umbrella will be shuttered or merged. I would be shocked if not. 

Edited May 1, 2020 by UPNYGuy

[AtlantaCruiser72]

46 minutes ago, UPNYGuy said:

“We will come out smaller” is corporate speak for some cruise lines under the Carnival umbrella will be shuttered or merged. I would be shocked if not. 

 

It could also be a signal that older, smaller, vessels will remain out of operation initially and that some could be permanently retired.  The newest/largest vessels (that carry the most passengers and have the highest debt load) will be the first to resume service, regardless of the market/region/sailing length they operate in.  Better to sail a 5000 passenger ship at 50% occupancy than a 2000 passenger ship at 50% occupancy from a revenue standpoint.

[UPNYGuy]

12 minutes ago, AtlantaCruiser72 said:

 

It could also be a signal that older, smaller, vessels will remain out of operation initially and that some could be permanently retired.  The newest/largest vessels (that carry the most passengers and have the highest debt load) will be the first to resume service, regardless of the market/region/sailing length they operate in.  Better to sail a 5000 passenger ship at 50% occupancy than a 2000 passenger ship at 50% occupancy from a revenue standpoint.

correct as well. It really would not surprise me to see the fantasy class in the carnival fleet gone, and the one R ship (from Renaissance) in Princess gone (possibly to Oceania or Azamara). Also would not surprise me to see the remaining S class gone and all R class mothballed (or possibly gone) if the HAL brand survives this long term. 
 

I can see the R ship going from Princess and being sold to Oceania or Azamara as those lines profitably operate small ships, and might be able to do so at a reduced load.  

Edited May 1, 2020 by UPNYGuy

[wesport]

My takeaways. There might not be any more sailings this year.  Or, some slower openings but not all at once. Seems like Carnival is taking care of the travel agents and small tour operators but not refunding our  money for cancellations. Kind of makes you not want to cruise any more. 

[Days Like These]

I can see them trying to sell off one or more cruise lines to any takers, including Royal Caribbean. Only Carnival and Princess brands would be off limits. Lines Carnival Corp owns are Carnival, Princess, HAL, Seabourn, Costa, P&O UK, P&O Australia, Costa, and Aida. 

[fishin' musician]

28 minutes ago, AtlantaCruiser72 said:

 

It could also be a signal that older, smaller, vessels will remain out of operation initially and that some could be permanently retired.  The newest/largest vessels (that carry the most passengers and have the highest debt load) will be the first to resume service, regardless of the market/region/sailing length they operate in.  Better to sail a 5000 passenger ship at 50% occupancy than a 2000 passenger ship at 50% occupancy from a revenue standpoint.

 

But if you had 2000 passengers, wouldn't it be more profitable to put them in a 2000 pax ship than a 5000 pax ship?

[UPNYGuy]

39 minutes ago, fishin' musician said:

 

But if you had 2000 passengers, wouldn't it be more profitable to put them in a 2000 pax ship than a 5000 pax ship?

not if it is a newer ship with newer propulsion and newer technology. Aircraft work the same way. A 737-900ER  is roughly as ‘efficient’ from a propulsion standpoint as a 737-600, but carries roughly 50 more people.
 

And if we are comparing older (MD80) to newer (CSeries/A220) it is even more staggering. This is a comparison more appropriate to an old ship (HAL S Class) and a new one. (MSC Meraviglia).  A new jet is on the order of 20% more efficient, and new ships use high efficiency engines, more efficient hull designs (anthem OTS actually has a cushion of air bubbles it sails on), azipods instead of props,  LED lighting, more efficient use of HVAC, etc. this all adds up. 

Edited May 1, 2020 by UPNYGuy

[Nymich]

With all due respect he has no clue how this will play out.  Even prisons and sporting events with mass gatherings take priority over cruises.  

[Sir PMP]

1 hour ago, Days Like These said:

I can see them trying to sell off one or more cruise lines to any takers, including Royal Caribbean. Only Carnival and Princess brands would be off limits. Lines Carnival Corp owns are Carnival, Princess, HAL, Seabourn, Costa, P&O UK, P&O Australia, Costa, and Aida. 

Princess should go first..

[Krazy Kruizers]

Interesting article.

 

Only time will tell what will happen to ships and/or cruise lines.

[UPNYGuy]

1 hour ago, Nymich said:

With all due respect he has no clue how this will play out.  Even prisons and sporting events with mass gatherings take priority over cruises.  

 

I think you will see cruises resume before you realize. The cruise execs are unbelievably connected to Washington, especially Carnival Corporation. Might be wrong (I’m not 100% certain) but I have one in August, one in October, and one in November. October and November are actually new bookings I just did and no it wasn’t an FCC. If they don’t resume I will just sit back and wait. I’ll roll them over to next year. 

Edited May 1, 2020 by UPNYGuy

[UPNYGuy]

1 hour ago, Krazy Kruizers said:

Interesting article.

 

Only time will tell what will happen to ships and/or cruise lines.

very true, and that is why I keep booking, but not with Princess or HAL. Haven’t booked with HAL in quite some time.

[AtlantaCruiser72]

3 hours ago, fishin' musician said:

 

But if you had 2000 passengers, wouldn't it be more profitable to put them in a 2000 pax ship than a 5000 pax ship?

 

If the cruise lines try to adhere to some sort of social distancing measures they may be forced to sail at reduced capacity once operations resume - so, yes a 5000 passenger ship carrying 2000 guests will be more profitable than a 2000 passenger ship carrying 1000 guests. 

 

Also larger ships tend to have more "for fee" areas like specialty dining, etc that can generate more sources of ancillary income than smaller older vessels.  Compare Nieuw Statendam with Pinnacle Grill, Tamarind, Sel de Mer and Canaletto, to say the Volendam with only Pinnacle Grill and Canaletto - far more earning potential on Nieuw Statendam per passenger per day, even if sailing with a reduced capacity

[Tampa Girl]

17 hours ago, UPNYGuy said:

“We will come out smaller” is corporate speak for some cruise lines under the Carnival umbrella will be shuttered or merged. I would be shocked if not. 

 

I have another take on Donald's statement:  :“I think initially we will come out operating smaller than we did than before we went into this. That’s because there won’t be some light switch. Every destination won’t open simultaneously. Every world market is not going to have the same protocols."  I prefer to think that he meant that there will initially be fewer ships sailing because there will be fewer ports open  at that time.  I did not take it to mean that some lines will be "shuttered or merged."  I prefer the more optimistic approach.  Hope, hope, hope.  

[Roz]

16 hours ago, Days Like These said:

Only Carnival and Princess brands would be off limits. 

 

I understand Carnival because it bears the Corporation's name and serves a certain price point, but why Princess?  I think HAL and Princess are the most vulnerable because they essentially serve the same market segment.  Only one may survive.

[Roz]

17 hours ago, AtlantaCruiser72 said:

 

It could also be a signal that older, smaller, vessels will remain out of operation initially and that some could be permanently retired.  The newest/largest vessels (that carry the most passengers and have the highest debt load) will be the first to resume service, regardless of the market/region/sailing length they operate in.  Better to sail a 5000 passenger ship at 50% occupancy than a 2000 passenger ship at 50% occupancy from a revenue standpoint.

 

What about the more exotic itineraries that some cruisers are willing to pay a premium for?  Those cannot be done with the mega ships.

[Janet76]

All I know is CCL is in bad financial shape if sailing is not resumed this year,  Chapter 11 bk is only way to stay afloat.  

 

[Sir PMP]

3 hours ago, Tampa Girl said:

 

I have another take on Donald's statement:  :“I think initially we will come out operating smaller than we did than before we went into this. That’s because there won’t be some light switch. Every destination won’t open simultaneously. Every world market is not going to have the same protocols."  I prefer to think that he meant that there will initially be fewer ships sailing because there will be fewer ports open  at that time.  I did not take it to mean that some lines will be "shuttered or merged."  I prefer the more optimistic approach.  Hope, hope, hope.  

And who is he to make the decision, he knows nothing about ships, came from Monsanto, he knows all about spray cans like Round Up!

[Nymich]

17 hours ago, UPNYGuy said:

 

I think you will see cruises resume before you realize. The cruise execs are unbelievably connected to Washington, especially Carnival Corporation. Might be wrong (I’m not 100% certain) but I have one in August, one in October, and one in November. October and November are actually new bookings I just did and no it wasn’t an FCC. If they don’t resume I will just sit back and wait. I’ll roll them over to next year. 

I said nothing about when cruises begin again.  I simply stated how unimportant they really are in what should reopen.

[iancal]

I believe that in order to make an educated guess one would have to have a look at the individual cruise line financials-P&L, balance sheet, and cash flows.   Plus their financial performance against plan and against best in class over the past few years.  Plus a look at the age of their fleet, it's condition.  Then on to look at how successful their sales and marketing plans vs results have been for the past several years.  Plus the usual such as pending litigation that could go south and or result in substantial awards.  

 

After that, it is new ball game to do what is necessary to keep the Corporation going. No doubt no one in the industry wants to see a bankruptcy before cruising is as near as back to normal .  Good time to clean house, reduce middle management, and move forward.

Edited May 2, 2020 by iancal

[atexsix]

I agree that if it were purely based on profits, then the larger ships would be better suited, but sheesh, they cannot put making a profit above the value of even a single human life.  And they certainly can't afford another fiasco the likes of which we saw multiple times this year. 

 

To win over the ports, governments, passengers, and public they will have to approach it purely from a safety standpoint, at least in the beginning; anything else is off the table, profits be damned, until some unknown point in the future.  But I don't know how on God's green earth they can accomplish that on a mega ship.  I think river cruises and smaller vessels will be easier for crowd control/management and containment should an outbreak occur.  Smaller vessels are also ideal for tests and experimenting with new processes and procedures; the larger the ship the harder these will be to monitor and implement.  

 

Do you really want to tackle Beethoven's 5th on your first piano lesson?  I would want to start out as small as possible and work my way up.  And HAL has a head start on this.

 

 

Edited May 2, 2020 by atexsix