Royal looking to liquidate a significant portion of its global fleet?

[Beardface]

Was pointed toward Apollo Duck last night based on a show by Josh Hocum, and.....  Well...

 

Looks like several Radiance Class ships, the Rhapsody of the Seas, the Millennium Class ships within Celebrity, a few Pullmantur ships, the old Sun Viking, some TUI ships, the Majesty of the Seas, and that entire class , some Azamara Ships, among many others, have all been put up for sale in the past month or so.  For the record, there are several Carnival ships listed as well.

 

It certainly looks like there is a looming selloff around the industry.

[Ex-Airbalancer]

Who will buy them ? 
or will they sell them and lease them back to use ? 

[djjoe]

Just had the same thought. Who wants to buy them? How about Vision class? They date back to mid to late 90’s. Grandeur is scheduled to leave in March, but to where?

[Beardface]

If they need money and there are no buyers, you could end up seeing a decent number sold for scrap just to get whatever they can out of them.

[John&LaLa]

23 minutes ago, Beardface said:

Was pointed toward Apollo Duck last night based on a show by Josh Hocum, and.....  Well...

 

Looks like several Radiance Class ships, the Rhapsody of the Seas, the Millennium Class ships within Celebrity, a few Pullmantur ships, the old Sun Viking, some TUI ships, the Majesty of the Seas, and that entire class , some Azamara Ships, among many others, have all been put up for sale in the past month or so.  For the record, there are several Carnival ships listed as well.

 

It certainly looks like there is a looming selloff around the industry.

 

Do they still own Sun Viking🤔

[Funky Fusion FoodsJ]

As mentioned, there are no purchasers.  Many will go to scrap, many will be bought back making their books look better.  A good time really to trim all the marginal producers from the fleets and blame allow the Covid reasons to absorb the losses.

[chengkp75]

21 minutes ago, Beardface said:

If they need money and there are no buyers, you could end up seeing a decent number sold for scrap just to get whatever they can out of them.

Scrap prices are based on displacement tonnage, so even a huge ship like Oasis (100,000 tons displacement), at $300/ton, would only bring about $3 million as scrap.  Compare that to her build price brought to today's dollars ($1.78 billion), and they would realize about 0.1% of her value, minus the cost to sail her to India.

[drsel]

Scrap prices are based on displacement tonnage, so even a huge ship like Oasis (100,000 tons displacement), at $300/ton, would only bring about $3 million as scrap.  Compare that to her build price brought to today's dollars ($1.78 billion), and they would realize about 0.1% of her value, minus the cost to sail her to India.

Why was Costa Victoria sold for scrap?
It was a beautiful ship, well maintained, and I sailed on it in February just before the virus attack

[mo&fran]

would you imagine someone might buy one  and lease back to Royal.

[ONECRUISER]

18 minutes ago, drsel said:

Why was Costa Victoria sold for scrap?
It was a beautiful ship, well maintained, and I sailed on it in February just before the virus attack

Smaller, older like most mentioned on here. CV is reason was sold/scraped reason given 

[chengkp75]

18 minutes ago, drsel said:

Why was Costa Victoria sold for scrap?
It was a beautiful ship, well maintained, and I sailed on it in February just before the virus attack

Well, she was 25 years old.  From a passenger's perspective, the ship may have appeared to be well maintained, but there could have been costly repairs needed to the hull and structure.  After 15 years old, the ship must drydock every 2.5 years, and the surveys in dock get more and more intensive and the resultant repairs get more and more expensive.  This ship may have been a "problem child" from new build (some ships just have more troubles than sister ships), or it may be the bad PR from the covid outbreak onboard may be the reason.  Victoria is sister to Norwegian Sky, and that ship has had problems since newbuild, though some of that is due to the year long layup between Costa ownership and NCL.

[chengkp75]

7 minutes ago, mo&fran said:

would you imagine someone might buy one  and lease back to Royal.

Don't see any financial advantage to either party, and not many corporations have train cars full of cash to buy cruise ships.

[John&LaLa]

17 minutes ago, chengkp75 said:

Don't see any financial advantage to either party, and not many corporations have train cars full of cash to buy cruise ships.

 

Why does leasing back work for airlines?

[Beardface]

21 minutes ago, chengkp75 said:

Well, she was 25 years old.  From a passenger's perspective, the ship may have appeared to be well maintained, but there could have been costly repairs needed to the hull and structure.  After 15 years old, the ship must drydock every 2.5 years, and the surveys in dock get more and more intensive and the resultant repairs get more and more expensive.  This ship may have been a "problem child" from new build (some ships just have more troubles than sister ships), or it may be the bad PR from the covid outbreak onboard may be the reason.  Victoria is sister to Norwegian Sky, and that ship has had problems since newbuild, though some of that is due to the year long layup between Costa ownership and NCL.

 

Vision Class (RhapsodyOTS) - 23 years old

Radiance Class -  16-19 years old

Sovereign Class (Majesty OTS) - 28 years old

Millennium Class - 20 years old

 

They're all getting up there and would not be shocked at all to see them all gone after this COVID period is behind us.  Radiance Class is the only one where maybe they won't scrap them right away, but the Vision and Sovereign class are probably all but done.  Millennium seems to be a good candidate to get outright sold given the introduction of the Edge and Apex.

 

[Xekyn]

It seems extraordinarily unlikely that they'll find buyers for any of these ships, I suspect the vast majority will be stripped down for anything of value and sold for scrap. The unfortunate reality of the situation is that the cruising industry that emerges on the other side of this pandemic will face a vastly different landscape than the one that preceded it; there will be limitations on where they can sail, the maximum occupancy of the ships and a considerable reduction in overall demand for the foreseeable future.

 

All of the major cruise lines will have to get significantly leaner just to remain solvent (let alone profitable) and scrapping ships is one way to drastically reduce overheads. 

[drsel]

Repeated

[drsel]

 
Why does leasing back work for airlines?

Airlines don't block huge money by investing in the airplanes . They save on depreciation.
leasing works out to be more cost effective.

it's just like in property, price to rent ratio decides whether you should buy or rent a house

[Beardface]

2 minutes ago, Xekyn said:

It seems extraordinarily unlikely that they'll find buyers for any of these ships, I suspect the vast majority will be stripped down for anything of value and sold for scrap. The unfortunate reality of the situation is that the cruising industry that emerges on the other side of this pandemic will face a vastly different landscape than the one that preceded it; there will be limitations on where they can sail, the maximum occupancy of the ships and a considerable reduction in overall demand for the foreseeable future.

 

All of the major cruise lines will have to get significantly leaner just to remain solvent (let alone profitable) and scrapping ships is one way to drastically reduce overheads. 

 

Yep, all of this.  And lets be honest for a second, the cruise industry had probably grown a little too large for its own good in recent years, so a bit of downsizing here isn't necessarily a bad thing.  Sunsetting ships in the mainline fleet that are 20+ years old is probably a good idea to keep everything fresh and pushing toward the future, especially given we know that there will be new guidelines and regulations coming out of this than there were going into it.  You're probably looking at mandatory retrofitting across the industry before anyone is going to be allowed to sail in US waters again to bring everything up to the new medical codes that we all know are going to be coming.  Getting rid of the oldest ships that will cost the most to bring up to code is probably just good business.

And, lets not forget that its costing the lines money to keep these ships afloat right now.  There are daily operating expenses that we know are hurting, otherwise we wouldn't be hearing about how much financial strain everyone is under.  Scrapping the oldest ships, with likely the highest operating budgets with a skeleton crew, is probably something we are going to see everywhere.  Its why the Vision, Millennium, Sovereign class ships are up for sale through Royal and why the Fantasy class is up for sale from Carnival.  (Also happened to see the Dreamward class (SuperStar Gemini and SuperStar Aquarius, fka the Dreamward and Windward for NCL) up for sale as well, and they are 28 years old as well.

 

And another added bonus, if they are able to drop off the older ships, then it leaves them room to keep innovating with new ships and new classes down the line while still keeping demand for each sailing strong, even if total demand drops in the short term.

[wolfcathorse]

I think with Pullmantur filing for reorganization and stripping Monarch and Sovereign of valuables, the most logical assumption is that those two are headed for the scrap yard so when cruising does resume, RCI can transfer some Vision class ships to Pullmantur. If RCI is betting that Cuba will one day open back up, then they'll keep Empress and Majesty.

[drsel]

I think with Pullmantur filing for reorganization and stripping Monarch and Sovereign of valuables, the most logical assumption is that those two are headed for the scrap yard so when cruising does resume, RCI can transfer some Vision class ships to Pullmantur. If RCI is betting that Cuba will one day open back up, then they'll keep Empress and Majesty.

Pullmantur as a brand has closed down.

There are no more sailings available to be booked on their agents websites

 

[chengkp75]

1 hour ago, John&LaLa said:

 

Why does leasing back work for airlines?

Planes cost a whole lot less than cruise ships, per copy.  Lots more competition for a given aircraft model than there is for a cruise ship.  Leasing can give an airline better cash on hand, for financial agility.  Purchasing and leasing can give advantage since the airline typically gets a discount from the manufacturer (fleet discount), and then sell them and lease back to get the major chunk of cash back for other operations.

[Cruising89143]

That is not an Azamara ship. The three Azamara ships entered service in 2000, 2000 and 2001 respectively. The ship showing entered service in 1998. Either the Regatta or Insignia. Plus the Oceania ships are registered in the Marshall Islands as listed. Azamara is registered in Malta.

[John&LaLa]

5 minutes ago, cruisingator2 said:

That is not an Azamara ship. The three Azamara ships entered service in 2000, 2000 and 2001 respectively. The ship showing entered service in 1998. Either the Regatta or Insignia. Plus the Oceania ships are registered in the Marshall Islands as listed. Azamara are registered in Malta.

 

Insignia is the only ship still anchored off Cocoa Beach.  I miss the fleet we had all spring

[Crazy planning mom]

Wouldnt they want to keep at least Radiance for Alaska?

[Hoopster95]

2 hours ago, chengkp75 said:

After 15 years old, the ship must drydock every 2.5 years, and the surveys in dock get more and more intensive and the resultant repairs get more and more expensive.  This ship may have been a "problem child" from new build (some ships just have more troubles than sister ships), or it may be the bad PR from the covid outbreak onboard may be the reason.  Victoria is sister to Norwegian Sky, and that ship has had problems since newbuild, though some of that is due to the year long layup between Costa ownership and NCL.

 

Thank you for your insight chengkp

 

2 hours ago, Beardface said:

 

Vision Class (RhapsodyOTS) - 23 years old

Radiance Class -  16-19 years old

Sovereign Class (Majesty OTS) - 28 years old

Millennium Class - 20 years old

 

They're all getting up there and would not be shocked at all to see them all gone after this COVID period is behind us.  Radiance Class is the only one where maybe they won't scrap them right away, but the Vision and Sovereign class are probably all but done.  

 

I hear an echo from yesterday