Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) today reported a number of additional actions it is taking to strengthen its liquidity position in the event of an extended pause in cruise operations due to COVID-19.
Last month, the company completed a successful financing effort with a heavily oversubscribed offering of senior secured notes, senior convertible notes and common stock, netting $6.4 billion of additional liquidity.
Now, to further strengthen liquidity, Carnival Corporation and its brands are to make a combination of layoffs, furloughs, reduced work weeks and salary reductions across the company, including senior management. It says these moves will contribute hundreds of millions of dollars in cash conservation on an annualized basis.
“Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do. Unfortunately, it’s necessary, given the current low level of guest operations and to further endure this pause,” said Carnival Corporation & plc President & CEO Arnold Donald. “We care deeply about all our employees and understanding the impact this is having on so many strengthens our resolve to do everything we can to return to operations when the time is right. We look forward to the day when many of those impacted are returning to work with us and we look forward to the day, when appropriate, that once again our ships and crew are delighting millions of people at sea and we can be there for the many nations and millions of people who depend on the cruise industry for their livelihood.”
“We also want to thank our guests for their many thoughtful notes and overall outpouring of support,” added Donald. “It is clear there is tremendous anticipation for a return to cruising. It’s also encouraging to note that the majority of guests affected by our schedule changes want to sail with us at a later date, with fewer than 38% requesting refunds to date. Our booking trends for the first half of 2021, which remain within historical ranges, demonstrate the resilience of our brands and the strength of our loyal recurring customer base, of which 66% are repeat cruisers. In addition, we plan to stagger fleet reentry to optimize demand and operating performance over time.”
Since the company paused its guest cruise operations in early March, workforce changes had been largely placed on hold.
In addition to its continuing efforts to repatriate the many thousands of crew members still on its ships to their home countries, the company is also working closely with governments, regulatory agencies, health and infectious disease care experts around the globe to develop the best practice public health protocols to address the threat of COVID-19 for when guest operations resume.
Repatriation efforts include chartered flights as well as rerouting its ships to crew home ports where those ships would not have otherwise sailed. The company is also working closely with its many destination partners as it continues to evaluate the best options and safety protocols for return to service.