The pandemic has ground the cruise line’s business to a near-halt.
When the pandemic first began escalating early in 2020, Carnival Corp., provider of luxury cruise vacations, ended up in a decisively dicey position when over 690 passengers on their Diamond Princess cruiser had to be quarantined due to the spreading coronavirus. Since then, both as a result of this event and the pandemic’s general toll on the vacation industries, Carnival’s finances have been steadily dwindling, and it doesn’t look like things will be improving for them any time soon.
Carnival reported their 2020 Q4 earnings on Monday, revealing that the company had lost a devastating $2.22 billion as of the end of November. Compared to the same time in 2019, where the company had profited by $423 million, this is an unprecedented downturn. While the actual profits the company had managed were not explicitly divulged, a spokesperson admitted that they were only in the tens of millions.
In order to conserve existing funds, Carnival has paused all of its cruise lines until the end of March at the absolute earliest. The company also plans to sell off 19 of its lowest-performing ships, approximately 13% of their entire fleet. The expediency at which Carnival will be able to resume its cruises depends heavily on the U.S. Centers for Disease Control and Prevention, which is requiring at least two months of mock sailings and an official certificate before passengers would be allowed on a vessel.
Carnival lost $10.2 billion last year—but says it can survive 2021 without cruises https://t.co/Dii8BZIgK1
— FORTUNE (@FortuneMagazine) January 11, 2021
In spite of these concerning statistics, the Carnival board is doing its best to stay positive. The company’s CFO, David Bernstein, said that Carnival has “the liquidity in place to sustain ourselves throughout 2021, even in a zero-revenue environment.”
“With the aggressive actions we have taken, managing the balance sheet and reducing capacity, we are well-positioned to capitalize on pent-up demand and to emerge a leaner, more efficient company,” Chief Executive Arnold Donald added on a conference call.