The US Centers for Disease Control and Prevention (CDC) will allow the cruise majors to start sailing again in US waters next month, but analysts are not betting on it amid a resurgence in Covid-19 cases.
They expect Carnival Corp, Royal Caribbean Group and Norwegian Cruise Line Holdings to sail elsewhere well past then, despite the CDC shortening its no-sail order to 31 October.
"We think sailings out of the US may continue to be delayed until March 2021, given second-wave risk, a fluid political climate, and balance sheet risk," Macquarie Research analyst Paul Golding wrote in a client note.
"We wrote on the heels of the no-sail announcement a couple weeks ago, now set to expire on 31 October, highlighting that we didn’t expect this to be the watershed moment for cruising resumption that many had expected."
That second wave
He said the majors may sail out of select US ports before then if a second wave "doesn’t pack a brutal punch". But they will probably hold off on full restarts beyond March to avoid risking their finances.
Carnival has postponed six itineraries from Port Miami and Port Canaveral from November to December, but is allowing customers to cancel with refunds or future cruise credits, Golding said.
The Arnold Donald-led cruise giant, which has about 90 ships, may be subject to a federal judge's order to announce sailings 60 days in advance.
The ruling, if issued, would also require Carnival's ships to be environmentally compliant before sailing as part of felony charges that have resulted in $60m in green fines since 2015.
"We are waiting on the CDC to decide upon a date when we can begin sailing again in the US," Carnival spokesman Roger Frizzell told TradeWinds.
"Our cruise lines remain on standby until this decision is made."
Norwegian Cruise Line delayed its US sailings by another month to December, and Royal Caribbean pushed back all sailings to December, except those from Hong Kong.
Calls to the CDC, Royal Caribbean and Norwegian Cruise Line were not returned immediately.
White House influence on CDC order questioned
US Representative Sean Patrick Mahoney is looking into whether the White House Task Force inappropriately influenced the CDC to shorten its no-sail order from mid-February 2021 to 31 October this year.
"News leaked that the CDC had actually aimed for a mid-February 2021 restart but, under White House pressure, agreed to the 31 October date," Infinity Research analyst Assia Georgieva told TradeWinds.
"Given this, I expect a majority of potential passengers will plan vacations from mid-February, at the earliest."
I believe that limited cruise operations are likely to start before March 2021, mostly by European brands and Caribbean-centric ships."
She said full-fleet operations are much more likely to start in the summer.
"It makes no sense to add capacity to the Caribbean mix during the slow winter months and before a vaccine is readily available," she said.
"Revenue potential will be limited by both number of ships in operation before the April and May timeframe, as well as by lower occupancy levels.
"A third factor from a cash flow perspective is the use of future cruise credits by previously booked passengers."
