Carnival Corp subsidiary Costa Cruises is selling one of its midsize ships, according to widespread reports emerging from the European cruise sector this week.

The news comes as the cruise giant’s CEO Arnold Donald says the company is accelerating its vessel disposals and some may end up as scrap.

The 75,200-gt Costa Victoria (built 1996) may not be going for scrap, but its days as a globe-trotting cruiseship appear to be over.

Genova Trasporti Marittimi, an entity belonging to Italy’s San Giorgio del Porto Shipyard, is reported to be the buyer.

Market sources said they believe the ship will in future be used as floating accommodation for workers and contractors at San Giorgio’s shipyard in the French port of Marseilles.

The sale into an accommodation role highlights the complete lack of interest in secondhand cruiseships since the coronavirus brought the cruise sector to an abrupt halt.

The Costa Victoria is not an old ship by cruiseship standards. It underwent a major life-extension refit in Singapore in late 2013, and a further extensive refurbishment in Marseille during 2018.

Sale-and-purchase brokers who work the cruiseship sector told TradeWinds that the ship attracted a good deal of interest when it was first put on the sales market in late 2019, although some interested parties baulked at the $100m asking price.

When the coronavirus hit, the asking price is said to have dropped to $75m, a price that would have probably secured a sale to a trading buyer, but by then it was too late. With no income being generated, and facing a bleak financial future, few of the second-tier operators for whom the Costa Victoria would have been of serious interest are able to buy another ship.

Asked by TradeWinds what an appropriate price for the ship as an accommodation candidate would be, one broker guessed $15m would be an appropriate figure if the deal includes a clause stipulating that the vessel is only used in a static role and cannot be resold for further trading.

Neither Carnival nor Costa have confirmed that any deal has taken place, and neither responded to requests for comment from TradeWinds.

Costa still has the Costa Victoria listed on its website as running a series of Mediterranean cruises during August and September of this year, but beyond that no other cruises have been scheduled. All other Costa ships are scheduled well into 2022.

Even if Costa does resume cruising soon, it is highly unlikely that the ship will be reactivated for only a handful of voyages.

Accelerated vessel disposals and newbuilding delays

Carnival CEO Arnold Donald Photo: Len Kaufman

Carnival chief executive Arnold Donald said in an online webinar this week that the resumption of cruising activities remains a moving target and a regulatory matter, and that when it does move forward, it will be on a much-reduced scale than what was before the coronavirus.

He emphasised that it was difficult to predict when and where the company will restart cruise operations.

“I learned a long time ago not to try to forecast regulatory dates,” he said.

“When this starts up again not every destination is going to start-up at the same time, so in the beginning there will be fewer ships — by a lot — than there were when we shut down. It is going to take some time for us to get back to the level we were at before.”

Donald stressed that the slow resumption of business will lead to the early retirement of ships, and that the lack of potential buyers would probably lead to them being scrapped rather than sold on for further trading.

“There will be an acceleration in the retirement of ships. There is no question about that,” he explained

“It is highly probable that you are going to see some ships actually scrapped as opposed to just moving to secondary or tertiary markets.”

Donald also conceded that the coronavirus has caused delays with three ships that were scheduled for delivery to Carnival Corp this year.

Its P&O Cruises brand is waiting for the 184,700-gt Iona from Meyer Werft, while Princess Cruises has a 145,300-gt vessel scheduled for delivery by Fincantieri. The third ship impacted is flagship brand Carnival Cruise Line's 183,200-gt Mardi Gras from Meyer Turku.

The yards, Donald explained, had all experienced lockdowns and slow start-ups. The same problems have been faced by subcontractors and materials suppliers.