Norwegian CEO: Relaunch will take six months; fleet will ‘return in earnest’ in spring 2021
The outlook for the rest of 2020 remains murky for the cruise industry, to say the least. On Wednesday, most major lines extended their suspensions through at least the end of October. One day later, the head of Norwegian Cruise Line’s parent company predicted that its ships wouldn’t be back in force until the spring of 2021.
“[In the] last two months of 2020 [we] could see return of sailing with a very limited number of vessels,” Frank Del Rio, CEO of Norwegian Cruise Line Holdings Ltd., said on the company’s second quarter earnings call.
And he expects those ships to begin sailing at lower capacity and ramp up as more vessels re-enter service.
Del Rio said he doesn’t think that Norwegian will return to full capacity for quite some time. It won’t be until the second quarter of 2021 until the Norwegian “fleet returns in earnest,” he said.
“We expect to relaunch with a handful of ships at first at significantly reduced occupancy,” Mark Kempa, the company’s executive vice president and CFO added. Del Rio estimated that capacity will start out around 50% or 60%.
Del Rio expects the relaunch to take about six months once cruising resumes.
In spite of the continued delay, business is “relatively strong” according to Del Rio, specifically, the company is seeing demand for cruises in 2021.
Bookings on track for 2021
According to its earnings report, bookings on Norwegian cruise lines are down in 2020, which makes sense given the industry-wide sailing suspension. However, that doesn’t mean that bookings will be down next year.
“While booking volumes since the emergence of COVID-19 remain below historical levels, the Company’s overall cumulative booked position and pricing for 2021 are within historical ranges including bookings made with future cruise credits,” Norwegian said in its second quarter earnings report.
“I think we’re all sick and tired of being cooped up in the house,” Del Rio said. And as long as it can be made certain that cruising is a safe activity, he imagines that the “pent-up demand” for cruises will be fulfilled.
Just how much pent-up demand is there? Due to the pandemic, between 15 to 20 million customers were unable to take cruises this year, Del Rio said.
When will Norwegian sail again?
Flagship brand, Norwegian Cruise Line, announced last week that it has extended their global sailing suspensions through Oct. 31, along with subsidiaries, Regent Seven Seas Cruises and Oceania Cruises.
The parent company also announced it plans to provide an update at the end of each month regarding cruise cancellations and potential sailing suspension extensions “in an effort to provide additional transparency.”
Facing coronavirus on board
Norwegian Cruise Line Holdings has partnered with Royal Caribbean Group to launch the “Healthy Sail Panel” with Royal Caribbean Group, with the goal of re-examining every facet of safety onboard their ships, from the effectiveness of ultraviolet light in killing the novel coronavirus (which causes COVID-19) to how to improve meal service.
There’s “not one silver bullet” when it comes to making a ship safer, Del Rio told USA TODAY last month. “This is layers on top of layers on top of layers.”
Del Rio said Thursday that the initial recommendations from the panel should be available in the fall and will be submitted to the CDC for approval before the company implements them on ships.
Del Rio added that Norwegian has no intention of turning public health and safety into a competition with rival cruise lines. The panel’s proposals will be made publicly available to any interested businesses or industries.
Cruisers should expect their experiences onboard to be different — at least for the time being.
“We do expect cruising to be different in the future,” he said, noting that they are being mindful of how changes might impact passenger satisfaction.
Reemergence of COVID-19 on ships abroad
As cruise lines overseas have resumed operations, they’ve faced new outbreaks on board.
“There is no way to spin the initial reemergence of COVID onboard vessels,” Del Rio acknowledged, though he says these cases do provide a learning opportunity for how Norwegian approaches its own relaunch.
“This virus teaches us something everyday,” he said.
Repatriation of crew almost complete
Norwegian expects to finish repatriating its crew members within 45 days. According to the earnings report, the company has brought home over 21,000 crew members to more than 75 countries.
Norwegian is not planning to sell ships
Norwegian Cruise Line Holdings is not planning to make cuts to its 28-ship fleet, which includes ships operated by Oceania and Regent Seven Seas.
“The company has the youngest fleet of the major cruise operators and currently does not have plans to dispose of any of its ships,” Andrea DeMarco, senior vice president of investor relations and corporate communications,told USA TODAY last month.
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Contributing: Chris Woodyard, USA TODAY
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