Norwegian is extending the suspension of most cruises by March, which is the ultimate blow to the business
Workers near a Norwegian cruise line cruise ship that is in dry dock receiving hull maintenance and interior modernization work.
Gerald Julien | AFP | Getty Images
Norwegian Cruise Line Holdings announced on Wednesday that the suspension of sailing will be extended again for most of the scheduled voyages, this time through March.
The company, which had previously suspended its cruise through December 31, said all cruises will be suspended through February 28, with most travel suspended through March 31.
It is among the longest cruise suspensions by any of the major publicly traded cruise lines announced to date. Rival Carnival, the largest cruise company in the world, has ceased operations through January. Some of its brands have extended the suspension until 2021. Royal Caribbean announced last month that it was suspending its cruise through January.
The Norwegian stock fell 2% on Wednesday. The company’s shares are up over 200% since bottoming at $ 7.03 per share on March 18 after the company announced the initial suspension of travel. However, the company’s shares are still down over 60% since Jan. 1.
But with positive vaccine news that could lessen the severity of the pandemic over the next year, at least in key markets for the global travel industry, Norwegian stocks rallied along with others in the industry in November. Norwegian shares rose 42% in November.
The company said it had extended its suspension as it “continues to work on its return plan to meet the requirements of the Conditional Sailing Ordinance Framework issued by the US Centers for Disease Control and Prevention”.
On October 30th, the CDC withdrew its almost 8-month No-Sail order and replaced it with a “Conditional Sailing Order”. This new arrangement provided a framework for the industry to think about how to safely resume sailing. This includes test drives that are monitored by CDC staff to ensure that the correct infection prevention protocol is implemented.
Norwegian CFO Mark Kempa said last month that the company “does not expect a linear recovery”. He said it had allocated $ 300 million to invest in health and safety, adding that monthly cash burn is expected to increase in the future as the company begins mobilizing its fleet and staff at a gradual rate To prepare for recommissioning. Kempa said the company had $ 2.3 billion in liquidity as of the end of the third quarter, including money earmarked for health and safety investments.