Carnival Corporation — the parent company behind major cruise brands such as Carnival and Princess — announced today that it plans to “dispose” of a total of 18 ships in the 2020 fiscal year.
With eight ships already sold or scrapped from its fleets this year, that means an additional 10 ships are now slated for removal.
“Since the pause in guest operations, the company has accelerated the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years,” Carnival said in an SEC filing. “The company now expects to dispose of 18 ships, eight of which have already left the fleet.”
In July, the company previously announced that it planned to remove a total of 13 ships from the fleet. Since then, it has sold or scrapped a number of vessels across lines. This includes older ships like the Carnival Fantasy (which began sailing in 1990) and Carnival Inspiration (1996).
This latest announcement adds an additional five ships that will be removed from service.
While Carnival hasn’t announced which ships from which cruise lines will be sold or scrapped, common sense — and a statement from the company — hint it will tend toward older, smaller ships.
In the SEC filing, the company says “the 18 ships represent approximately 12 percent of pre-pause capacity and only three percent of operating income in 2019.” They also described the 18 ships leaving as “less efficient.”
So while the removal represents a large number of ships from across its fleet, the impact on capacity and profitability isn’t quite as large as you might think. For example, the Carnival Inspiration, which was recently removed from the Carnival fleet, held roughly 2,000 passengers. The Carnival Mardi Gras will hold more than 5,200 on a single cruise.
Carnival Corporation Aims to Be More Efficient
In the wake of COVID, the company is taking steps to become more efficient and profitable coming out of the storm. Since the crisis started the company has taken on billions of debt in order to survive during the cruise suspension. With the removal of older ships, the company wants to emerge as a “leaner” company.
“We will emerge with a more efficient fleet, with a stretched out newbuild order book and having paused new ship orders, leaving us with no deliveries in 2024 and only one delivery in 2025, allowing us to pay down debt and create increasing value for our shareholders,” a statement from the company said.
As mentioned, there is no word yet on which specific ships will be removed, or which cruise lines will be impacted.
Carnival Corporation is the parent of nine different lines, including:
- Holland America
- P&O Cruises (Australia)
- Costa Cruises
- AIDA Cruises
- P&O Cruises (U.K.)
In a piece of good news, Costa Cruises began sailing this month in Italy, with the Costa Deliziosa taking its first trip since the crisis began. The company is slated for a second ship — Costa Diadema — to begin sailing this weekend. It also said it plans for its German brand AIDA to start sailing in the fall 2020.