Carnival CEO sees two more tough years for cruise industry

Carnival Corp Chief Executive Arnold Donald anticipates at least two more tough years for the cruise industry, which is unlikely to return to pre-pandemic levels until at least 2023, the Financial Times reported on Sunday.

The cruise company’s full fleet might be sailing by the end of this year but it will take longer to recover to pre-crisis revenues, Donald told the newspaper in an interview.

Carnival in January reported a bigger-than-expected preliminary fourth-quarter net loss as business was brought to a virtual standstill by the coronavirus outbreak.

Even returning the entire fleet to the water this year was uncertain, he said: “[It] depends on so many variables, because every destination is going to have its own level of comfort and what regulations are going to be.”

The biggest hurdle to restarting once regulators give cruise companies their approval is returning its 90,000 staff to ships, Donald warned. It is a process that could take up to 45 days given differing international travel restrictions and quarantines, he said.

Carnival’s Cunard line is offering “summer staycation sailings” in the UK ahead of a full-scale restart. Sailings on Cunard’s Queen Elizabeth cruise ship will start in Southampton and will be travelling UK coastal waters in search of a spot of sunshine. Cunard’s flexible booking terms will be applicable for these voyages, so guests will be able to book with confidence, the company said in a press release on March 12.

But the industry is desperate to resume operations and rebuild balance sheets that have been badly damaged by the crisis. Carnival has raised a total of $23.5 billion in debt and equity since March last year to fund cash outgoings of some $600 million a month.

Despite losses, Carnival executives have received handsome stock awards in the past year. Donald’s salary was reduced by 50 per cent to $857,413, down from $1.5 million, and no bonus for performance as compared with $2.25 million in 2019.  It was the value of Donald’s stock awards — $12.23 million, compared with $7.1 million in the previous year — that drove up total compensation to $13.3 million from $11.15 million.