The pandemic has severely impacted the cruise line’s operations.
As the pandemic escalated in early 2020, Carnival Corp., known for its luxury cruise vacations, faced challenges when over 690 passengers on their Diamond Princess ship were quarantined due to the coronavirus outbreak. Since then, the pandemic has significantly impacted the tourism industry, leading to a decline in Carnival’s financial performance, with little sign of immediate recovery.
Carnival recently announced its financial results for the fourth quarter of 2020, revealing a staggering loss of $2.22 billion by the end of November. This marks a substantial downturn compared to the $423 million profit during the same period in 2019. While specific profit figures were not disclosed, a spokesperson mentioned they were only in the tens of millions.
To preserve liquidity, Carnival has suspended all cruise operations until at least the end of March. Additionally, the company plans to sell 19 of its least profitable ships, representing around 13% of their fleet. The resumption of cruises will depend on meeting the stringent requirements set by the U.S. Centers for Disease Control and Prevention, including conducting mock sailings for two months and obtaining official certification before passengers can board.
Carnival lost $10.2 billion last year—but says it can survive 2021 without cruises https://t.co/Dii8BZIgK1
— FORTUNE (@FortuneMagazine) January 11, 2021
Despite these challenges, Carnival remains optimistic about its future. The company’s CFO, David Bernstein, expressed confidence in their liquidity to sustain operations throughout 2021, even without revenue. Chief Executive Arnold Donald emphasized the proactive measures taken to manage the balance sheet, reduce capacity, and position the company to capitalize on future demand while operating more efficiently.
