| To: Jon Koplik who wrote (158) | 6/21/2020 2:27:47 AM | | From: Internship | | | | forbes article: Well, It displeases me utmostly to be the bringer of bad news, yet it seems that corona-cation will extend itself on a volunteer basis for at least 4 months again.
Cruise Lines, Facing Record Losses, Extend Suspension Of Sailing Until September
Sergei Klebnikov Forbes Staff
Markets
I cover breaking news, with a focus on money and markets.
TOPLINE While cruise stocks have recently been rebounding amid optimism about reopening the economy, the industry remains paralyzed by the coronavirus pandemic for the foreseeable future, with major cruise operators facing big quarterly losses and on Friday announcing that they’re extending their suspension of sailing.
Cruise operators are still hopeful that customers will return in 2021.
RHONA WISE/AFP VIA GETTY IMAGESKEY FACTS
Major cruise lines like Carnival, Norwegian Cruise Line and Royal Caribbean Cruises have voluntarily extended their suspension of voyages out of U.S. ports from July 24 until September 15, the Cruise Lines International Association announced on Friday.
Amid the shutdowns caused by the coronavirus pandemic, shares in the three major cruise operators have plunged between 55% and 70% so far this year.
Carnival, the world’s largest cruise operator, on Wednesday reported a record loss of $4.4 billion in the second quarter. Revenue fell 85% to $700 million from the same period a year earlier.
The cruise operator said that it expects to burn through about $650 million per month during the second half of 2020, but Carnival had $7.6 billion of liquidity as of May 31, which leaves it enough cash to survive into next year without resuming sailing.
The dismal financial results are yet another example of how badly the coronavirus pandemic has impacted the cruise industry, with fleets of all the major cruise operators under a no-sail order from the Centers for Disease Control and Prevention since mid-March.
Cruise stocks all plunged on Wednesday, for instance, after Norwegian Cruise Line first extended its suspension of voyages by two months, cancelling all departures until at least October 1.
But all the big cruise companies remain hopeful that customers will return in droves once lockdowns are lifted: Carnival, Royal Caribbean and Norwegian have all said that demand and forward bookings for cruises in 2021 remains strong.
CRUCIAL QUOTE“Although we had hoped that cruise activity could resume as soon as possible after that date [July 24], it is increasingly clear that more time will be needed to resolve barriers to resumption in the United States,” according to the CLIA’s press release.
WHAT TO WATCH FOR Many cruise operators are concerned about customers asking for refunds on cancelled voyages, instead of taking credits for future trips. With cruises having been suspended for months, big operators are now in survival mode, raising liquidity to cover their cash burns. According to Carnival, “approximately half of guests affected have requested cash refunds” as of May 31.
KEY BACKGROUND Over the last month, cruise stocks have rebounded strongly amid optimism on Wall Street over a reopening of the economy and faster than expected recovery. Carnival shares are up 28%, Royal Caribbean 36% and Norwegian 50%. But over the past week, cruise stocks have been hard-hit again, falling around 10% as investors grow increasingly concerned about a resurgence in coronavirus infections across the country. Some U.S. states reopening have recently reported record numbers of new cases, including Arizona, Texas, Florida and California.
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| From: Jon Koplik | 7/9/2020 8:36:07 PM | | | | | | Bloomberg -- The World’s Cruise Ships Can’t Sail. Now, What to Do With Them ? ...............
July 8, 2020
The World’s Cruise Ships Can’t Sail. Now, What to Do With Them?
Hurricanes, humidity, expired permits -- they’re all costly threats to empty ships.
By Fran Golden
Hundreds of people lined the banks of Glasgow’s River Clyde a few weeks ago for the rare sight of a small, high-end cruise ship sailing upriver -- practically into the heart of the city. The Azamara Journey thrilled socially distanced onlookers by blasting its horn, typically a heralding of lively celebration. But this time nobody was there to wave on the deck of the 700-passenger ship, aside from the couple dozen members of its skeleton crew. This was no celebratory arrival, after all: it was a vessel on life support, just like every other ship dealing with the pandemic’s brutal wake.
Since mid-March, only a small handful of the world’s 400-or-so cruise ships have been able to accept passengers -- all on hyper-local itineraries. A few dozen are sailing the world with purpose, repatriating crew members from every corner of the globe. The rest are sitting idle in cruise ship purgatory, unable to sail commercially for the foreseeable future. (In the U.S., the industry has agreed not to resume business at least until Sept. 15.)
The problem for many cruise lines? Idling through the pandemic isn’t just bad for the company’s bottom line, it’s a potential death warrant for their costliest assets: the ships themselves. From mechanical issues to hurricane risks to regulatory hurdles that can constitute criminal offenses, it’s a quagmire that the industry has never faced on this scale before.
The expense is staggering. In a recent SEC filing, Carnival Corp. -- whose nine brands comprise the world’s largest cruise company -- indicated that its ongoing ship and administrations expenses would amount to $250 million a month once all its ships are on pause. With the company saying it’s unable to predict when cruises resume, that’s a long-term line item on a balance sheet that logged $4.4 billion in losses in the second quarter alone.
Here a Ship, There a Ship
As with airplanes, the first issue with maintaining an idle cruise ship is simply finding a place to park it. As many as 16,000 planes have been grounded in the pandemic, hiding out in dry and rust-proof places that range from hangars and airport tarmacs to desert boneyards. Ships are similarly scrambling to find the right conditions to weather the storm.
There’s not enough port space for every ship to dock at once, especially for huge ships that ordinarily carry up to 8,880 passengers and crew. This explains the celebratory sounds of the Azamara Journey’s “homecoming” in Glasgow (it docked at a cargo port rather than its usual cruise berth further outside the city). Less lucky vessels have had no choice but to drop anchor at sea, occasionally stopping into the nearest port for provisions and fuel.
This week, a cluster of 15 ships from Carnival Cruise Line, Royal Caribbean, and Celebrity Cruises was hanging out near the Bahamas, according to Cruisemapper.com, a ship-tracking site. The 6,680-passenger Symphony of the Seas, the largest cruise ship in the world, was off the Dominican Republic.
According to Bill Burke, a retired U.S. Navy vice admiral and Carnival’s chief maritime officer, getting the company’s 105 ships to their pause destinations -- 20 in the Caribbean, 40 in Europe, 35 in Asia, and 10 in the eastern Pacific -- is a process that will stretch into the third quarter of the year.
High Maintenance
Parking is just the first pain point. To keep things shipshape and avoid costly repairs (much like how your battery might die if you leave your car sitting too long), the vessels must also be kept operating.
“Modern cruise ships are not designed or built to just be turned off and left at a pier,” says Monty Mathisen, managing editor of Cruise Industry News. “You are talking about massive amounts of machinery, electronics, and even steel that needs maintenance, checking, and preventative work.”
That mostly involves one of two scenarios, referred to in the industry as “warm” or “cold” layup.
In warm layup, most systems are kept functioning; in cold layup more are shut down, such as ballast tanks, turbines, and gear boxes. Cold layups come with extra precautions, too, such as sealing off external doors and windows, moving linens to a dry place, putting mattresses on edge, opening all dresser drawers and closets, and sealing bathroom fixtures, to name a few.
An advantage to warm layup is ships can quickly be put back into operation. Once the word comes down, Burke says, the ship can resume carrying guests within weeks -- though it will still need to get a full crew onboard and sail to the appropriate destination.
But warm layup requires more upkeep, and therefore more staff. Each ship has a “safe manning” team -- about 120 crew members for a large ship. Among the necessary personnel, according to Carnival’s Burke: a deck crew to drive the ship, an engineering crew to run the electrical power and propulsion, a medical team to tend to staff needs (particularly in the time of Covid-19), security, and enough housekeeping and kitchen staff to keep everyone looked after and fed.
In the event of hurricanes or other bad weather, the ships have to be able to move. They also have to comply with environmental, safety, and other regulations or risk stiff fines, criminal charges, and other penalties, says Burke. In 2016, for example, Carnival received a five-year probation and a $40 million fine on a criminal pollution conviction.
But there’s a time limit on this half-on strategy: According to shipping analysts at maritime intelligence company Lloyd’s List, warm layup is only appropriate in the short term. After as little as six months, ships may lose certain certifications that allow them to sail legally.
A Ship Out of Water
Cold layups require fewer systems to run, and therefore, as little as 40 crew members: a bridge team, engine room operators, fire wardens, and hotel staff. But grinding operations to a near-halt makes it more difficult and expensive to restart. According to Lloyd’s Register’s layup guide, every corner of a ship, from the pump room to the living quarters, needs to be inspected for things like gas leaks and mold; electrical equipment, including the navigation systems, need to be removed from safe storage and reinstalled ; and dehumidifiers all need to be removed before furniture and soft goods can be cleaned and put back in place. That’s why cold layups are seen as advantageous only in the event of an outage stretching to many months.
Burke says Carnival could move in this direction in the long term. According to Mathisen, Royal Caribbean has already committed to this tact. Its fleet is largely being protected by dehumidifiers -- deployed everywhere from engine rooms to public areas.
When they’re ready to set sail again, the restart “can take weeks to months,” he explains, detailing delays that range from transporting crew back to the ship, going through bureaucratic recertification processes, or even financing expensive dry dock repairs.
A more drastic option is tying up the ship, shutting down all systems, leaving only some emergency generators running and a few fire safety crew and watchmen on duty. Cruise historian and writer Peter Knego paints a grim picture of what can happen in that scenario.
“The first thing that goes is the plumbing,” Knego says. “If you don’t have the plumbing active and somebody’s actually flushing toilets and running water through the system, rust sets in, the pipe starts to disintegrate, and then you have major problems.”
HVAC systems and wiring are next to go. “And then just the fact they are laid up in salt water, salt air, decaying everything very quickly,” Knego explains. “You literally have to tear the infrastructure to make repairs if a ship has been idle for too long.” With long-term layups, issues like rot start to crop up.
If that sounds like a slow and painful death, some companies are just ripping off the Band-Aid instead. In its second-quarter financial filing, Carnival said it plans to retire at least six older ships, which could potentially be sold another cruise company or for scrap -- usually for anyone’s best offer. Costa Cruises brand’s 24-year-old Costa Victoria is reportedly destined for a scrapyard. A ship out of water is, alas, worth less than the sum of its parts.
© 2020 Bloomberg L.P.
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| From: Jon Koplik | 8/21/2020 12:28:13 AM | | | | | | Bloomberg -- How to Make Cruises Safe Again? Operate in a Bubble ................................
August 19, 2020
How to Make Cruises Safe Again? Operate in a Bubble
Lindblad Expeditions’ formula involves no human contact, no busy ports, and lots and lots of nose swabbing.
By Fran Golden
Adventure cruise operator Lindblad Expeditions thinks it’s cracked the code for safe cruising during a pandemic: Shelter passengers in a moving bubble of protection from viruses, prestart to finish. Chief Executive Officer Sven Lindblad says guests would not only travel together but also quarantine in the same hotel -- isolating for long enough to get two negative Covid-19 tests per passenger before departure. The company hopes to restart cruises in Antarctica as soon as November.
Lindblad is not the first cruise line to begin operations again, but it’s the most thorough in its approach. In mid-July, Norway’s Hurtigruten thought it had the magic ticket to return to sailing safely, only to have its public-health procedures immediately break down. After two weeklong, 400-passenger sailings to the Arctic, dozens of crew and guests tested positive for the virus.
MSC Cruises, meanwhile, returned to the Mediterranean Sea on Aug. 15, having required all of its travelers to undergo an antigen swab test directly before boarding. How that pans out remains to be seen.
As a purveyor of expedition travel, Lindblad is especially well-positioned to make its virus-free bubbles work. Its fleet of 10 small ships focuses on underpopulated, naturally pristine places, minimizing (or even eliminating) the need for human interaction at its various ports of call.
Constructing the Cruise Bubble
This is Lindblad’s plan: Say the Smiths, party of two, want to go on a once-in-a-lifetime cruise to see penguins, whales, and icy landscapes in Antarctica. They book a trip on the new, 126-passenger National Geographic Endurance -- a cutting-edge vessel noteworthy for its smooth ride, fuel efficiency, and reduced emissions.
Five days before they leave their home in the U.S. -- for logistical reasons, the cruises will only be available to Americans at first -- the Smiths will be required to have a PCR nasal swab test at a facility in their hometown, chosen with Lindblad’s help if necessary. Assuming their result is negative, they’d then travel to a jumping-off point somewhere in the 48 contiguous states, where, upon arrival, Lindblad would issue another Covid-19 test (either PCR or the quicker-but-less-reliable antigen test, depending on local turnaround times).
Their noses sufficiently prodded, the Smiths would spend a mandatory night at a designated hotel, where Lindblad would reward them with room-service dinner, allowing them to quarantine from their fellow travelers while they await next steps.
Having the second test before joining the group eliminates false negatives, says Dr. David Lorber, Lindblad’s consulting physician. And quarantining in between the two tests means anyone who does have the virus would not have interacted with other passengers. (Infected passengers would be sent home and likely refunded, though details are still being finalized.) Although it’s possible that someone could get a false negative on the second test and / or contract the coronavirus en route to the departure city, Lorber’s probability modeling shows it to be unlikely.
With their health clearances in order, the Smiths would ride in a carefully sanitized van to join their fellow vacationers on a private charter flight to Ushuaia, Argentina, where their ship to Antarctica awaits. Costs would be mostly unaffected by the privatized flights, which will average out to the same price as commercial or just slightly higher. Every aspect of the group’s travel would be tightly controlled, including by the Argentine government, which will have to open its borders to Americans for the trips to proceed.
All the same protocol would apply to the crew. “Any break, a crew member just zipping into a drugstore to pick up some shaving cream, that’s all it’s going to take,” Lorber says. “You can’t have that.”
Onboard Changes and More Testing
Lindblad’s ships will sail at about 80% capacity -- the volume determined by them appropriate for social distancing.
Still, the Smiths would be required to wear masks in public areas and when out exploring on Zodiacs (but not while paddling single or double kayaks). Some shipboard facilities would be closed, such as the buffet, hot tubs, and infinity pools. Dining, gym access, and visits to the bridge to hang out with the officers would be staggered. In addition to strict housekeeping standards, the facilities would literally clean themselves; Lindblad has coated its ships with ACT CleanCoat, a veneer that automatically breaks down microbes and allergens on contact.
There would be a physician on board and likely a nurse, too. And each day, guests and crew would be required to undergo temperature checks and fill out health questionnaires.
“You can count on everybody saying, ‘Joe, the waiter was coughing this morning,’ or you can ask Joe to fill out a form every day and make sure he isn’t coughing. But you want to encourage both,” Lorber says. Those with symptoms would be tested and, if the results are negative, tested again within a 48-hour period, using tests that can be analyzed right in the guest’s room.
At some point during the voyage, which could last anywhere from two weeks to 35 days and start from $15,000 per person / double occupancy, guests would likely receive at least one more round of testing -- with any positive results sending the guest and their close contacts into dedicated quarantine cabins.
Lindblad is still preparing for a worst-case scenario. As such, its ships will be equipped with a ventilator that the staff doctor will be trained to operate, and a medical evacuation plan -- currently being developed by the International Association of Antarctic Tour Operators (IAATO) -- will include prearranged agreements with local hospitals.
Of course, in Antarctica, there’s no such thing: Once you’re beyond the Drake Passage, the only air ambulance is from King George Island to Punta Arenas, Chile. In the event of a large outbreak, the ship would have to turn back.
No Local Contact
Staying away from people is easy in Antarctica. The only human interaction might come at research stations, which Lindblad used to include on weather-permitting trips. Now the company is planning not to visit them until scientists agree or the pandemic fully subsides.
In other destinations where Lindblad soon hopes to again operate its 48- to 148-passenger ships, such as Baja, Mexico, the Galápagos Islands, and Tahiti, civilization would be avoided -- which flies in the face of some of the line’s sustainability goals.
“It’s a conundrum,” says CEO Lindblad. “We want to provide [local communities] with some economic value.” Selling local artwork shipboard may be one way, he says; other ideas are under development.
These workarounds will likely be necessary well into 2021. Even if there’s a vaccine, it wouldn’t be 100% effective, explains Lorber.
And yet, about 40% to 45% of the company’s past guests have indicated they’re ready to cruise again. Says Lindblad: “I think there will be an acceleration of interest in places that are remote. That just naturally feels safer to people. Bouncing around big cities, not so much.”
© 2020 Bloomberg L.P.
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| From: Jon Koplik | 9/24/2020 2:50:24 PM | | | | | | ( long) Bloomberg piece / Ruby Princess / Spread Coronavirus Around the World .............................
September 15, 2020
The Carnival Cruise Ship That Spread Coronavirus Around the World
How were hundreds of infected Ruby Princess passengers allowed to disembark in Sydney and return to homes from Tasmania to Florida?
By Matthew Campbell
At about 6 a.m. on March 19, William Wright, a retired Australian mortgage broker, woke up feeling a little off. He had a cough and his nose was running, though it didn’t seem too bad. In any case, there was no time to linger in bed. Wright and his wife, Lucia, had just docked in Sydney after a 10-day journey around New Zealand on the Ruby Princess, a 950-foot, 1,542-cabin vessel operated by Carnival Corp.’s Princess Cruises subsidiary. The couple’s disembarkation time was 8:05 a.m., so they quickly packed up and had breakfast. They arrived on schedule in the Explorers Lounge, the nightclub where they’d been told to assemble with other passengers leaving at the same time.
Unloading a cruise ship is a complex process, and delays aren’t unusual. But the Wrights waited only a short while before being told they could go. They made their way through the corridors, past crew members waving goodbye and offering high-fives. Getting through Sydney’s Overseas Passenger Terminal took only a few minutes. Despite the accelerating Covid-19 pandemic, Australian officials had cleared the Ruby to disembark without restrictions. Passengers didn’t even need to show their passport, let alone get their temperature checked. The only paperwork was an immigration form that border guards glanced at before waving people through.
By 8:30 the Wrights were on the street, where 2,600-plus passengers had begun filtering into taxis, commuter trains, and densely packed airport buses. “I am a regular traveler overseas by flights and cruises,” Wright later said in a statement to investigators. “I have never experienced something so fast.”
The decision to allow the Ruby to dock would have profound consequences. The ship turned out to be the single most important vector for the coronavirus in Australia, accounting at one point for more than 10% of the country’s cases. In Tasmania two cruisers were the probable source of an outbreak so severe it forced a major hospital to shut down. Other infected passengers flew to the U.S., where some ultimately died. The crew, meanwhile, became virtual prisoners on their own vessel, some unable to return home for months.
Although multiple cruise ships recorded large numbers of Covid-19 cases in the early stages of the pandemic, the Ruby was unique, and not simply because 28 people died of the illness, the most of any voyage. Two other notorious Carnival ships -- the Diamond Princess, which was sealed off for weeks on a Japanese pier, and the Zaandam, which sailed up the entire west coast of South America looking for a country that would allow it to dock -- were vessels that guests couldn’t leave. The Ruby was the opposite, the incubator of a devastating outbreak discovered only after passengers were on dry land.
In an emailed statement, Princess said that “our highest responsibility and our top priority is always the safety, health, and well-being of our guests, crew members, and the people in the communities we visit,” and that it fully complied with public-health guidance throughout the Ruby’s travels. “As new information became available from global health authorities, we continually adapted our policies and protocols to reflect the latest updated thinking with respect to Covid-19.” When the Ruby initially set sail, the company said, “there was no reported community spread of Covid-19 in Australia.”
That changed emphatically after the ship docked. Until then, the country, with its isolated geography and excellent health-care system, had seemed poised to escape the worst of the pandemic. The ensuing fiasco has prompted a series of efforts to figure out what went wrong and whom to blame. The New South Wales government convened a high-profile public inquiry, and police are in the midst of an investigation led by homicide detectives. Lawsuits by passengers are also under way. Everyone is trying to answer a central question: How, at a moment when governments around the world were on high alert, were hundreds of infected people allowed to stroll off a cruise ship and into the heart of Sydney?
Circular Quay might be the most spectacular place in the world to begin a sea voyage. Lying at the foot of Sydney’s financial district, it’s bound on one side by the Rocks, one of the continent’s earliest European settlements. Beyond that is the soaring arch of the Harbour Bridge and, just opposite, the white concrete sails of the city’s famed opera house.
None of the thousands of passengers who crowded the quay’s cruise port to board the Ruby on March 8 appeared deterred by the growing alarm over the novel coronavirus. Although Australians were getting nervous -- shops in Sydney had begun to run out of hand sanitizer and canned food, and arrivals from China, Iran, and South Korea had been banned -- the country had only a handful of cases. In New Zealand, where the 13-day cruise was heading, there were even fewer.
Stephen and Rosie Keal, retirees from Tasmania, arrived around 12:30 p.m. to start a voyage celebrating Rosie’s 70th birthday. Shortly after they reached the terminal, Princess made an announcement: Boarding would be delayed until at least the late afternoon. “We went up to Circular Quay and found a nice little pub,” Stephen recalls. “The whole discussion, as you can imagine, was about this virus. And we unfortunately took the attitude, ‘Oh, this won’t happen to us, the rates are very low.’ ” Rosie posed for photos with the Ruby’s bow overhead; Stephen wanted to edit them so the hull would read “Princess Rosie.”
What they didn’t know was that at dawn that morning, just after the ship pulled in from its previous cruise, a government epidemiologist named Kelly-Anne Ressler had boarded with seven other staff. They carried suitcases full of masks, gloves, and testing swabs. The New South Wales health agency wanted to screen arriving passengers who appeared to be at risk of having Covid-19, whether because they’d reported respiratory symptoms or had recently been in an affected country. Ressler was shocked by the number she found gathered in a dining room -- more than 300, in all. She and her team handed out masks, took temperatures, and asked about travel histories. They decided to test nine people for the virus and allow the others to disembark. Until the results came in, a doctor told the crew, new passengers shouldn’t be allowed on board.
At 5:30 p.m., the tests came back: all negative. The Ruby was cleared to depart on its next cruise. Boarding proceeded, and the ship left its berth late in the evening, easing past the Opera House and out of the harbor. Some guests watched from their balconies, the lights of the city fading as they reached the open Pacific.
Diane Fish, a travel agent from Delray Beach, Fla., would have been content to spend the two-day passage to New Zealand sleeping. She’d been on the road since late February, leading a group of clients through a packed itinerary around Australia. But the cruise was part of the trip, so she settled into her usual roles as tour director and social convener, checking out the onboard entertainment and making sure everyone was having a good time.
The bad news from overseas was mounting. Italy had imposed a nationwide lockdown on March 9, and President Trump soon imposed an unprecedented ban on European arrivals to the United States. Fish wasn’t too anxious, given that she was thousands of miles from any known outbreak. “It just did not occur to me that we weren’t safe where we were,” she says. But she did ask a colleague to be prepared to help rearrange her group’s travel if the cruise was halted in New Zealand.
There was plenty to occupy passengers on the way across the Tasman Sea. Launched in 2008, the Ruby was far from Princess’s newest or biggest ship, but it was still impressive. It had 19 decks, four swimming pools, and dozens of restaurants and attractions, many of them arrayed around a central atrium called the Piazza -- inspired, as Princess’s marketing copy optimistically put it, “by the vibrant squares of Europe.” The Ruby’s Italian captain, Giorgio Pomata, was the commodore of the entire Princess fleet.
After arriving in New Zealand, the ship passed first through Fiordland, a region of spectacular mountain bays in the far southwest, before stopping in Dunedin. The Ruby then began port-hopping northward, with the final stop, in the Bay of Islands, planned for March 18.
On March 15, the Ruby stopped in Napier, on the edge of North Island wine country, and throngs of passengers spilled into town, hitting souvenir shops and piling onto tour buses. The same day, Australia’s prime minister, Scott Morrison, announced that his country was significantly stepping up its efforts to keep out the coronavirus. Everyone arriving from overseas would have to spend 14 days in isolation, no matter where they were traveling from. Cruise ship arrivals from foreign ports would be banned as of midnight.
No one at Carnival’s regional office was sure what the announcement meant for vessels such as the Ruby, which was carrying a large number of Australian passengers. But that evening an announcement went out over the ship’s public-address system: The cruise would head straight back to Sydney.
Stephen Keal, an accomplished sailor, had been tracking the Ruby’s progress online, and he soon noticed the bridge crew was flooring it, traveling at 24 or 25 knots instead of the 18 or so on the way to New Zealand. In the aftermath of the Diamond Princess, Carnival managers were well aware of what could happen to the ship if it was delayed. “We don’t want to get yourselves stranded anywhere or have a protest at a port due to cruise ships in the region,” a Sydney-based executive wrote to Commodore Pomata.
The passenger experience, meanwhile, remained largely unchanged. With social distancing still a novel concept outside of China, restaurants, bars, and other attractions stayed open. Crowded St. Patrick’s Day celebrations went ahead.
Back in Sydney, officials were assessing whether and how to let the Ruby dock. The state government’s criteria for determining whether a cruise ship could be carrying the virus were based on where passengers had traveled previously, where they’d been on their current trip, and, crucially, what share of them had reported “influenza-like illness,” or ILIgenerally understood to refer to a fever and respiratory symptoms. If the number exceeded 1% of the guests and crew, and if onboard tests for influenza showed that not to be the culprit, a vessel might be deemed high-risk and everyone kept on the ship until coronavirus swabs could be tested by an onshore lab. A medium-risk landing -- such as the Ruby’s March 8 arrival, flagged in part because some passengers had been in Singapore -- involved a more flexible menu of responses, whereas in a low-risk scenario passengers could disembark normally.
On the morning of March 18, the day before the Ruby was due to arrive, Ressler, the government epidemiologist, was copied on an email from the ship’s senior doctor, Ilse von Watzdorf. It answered a list of questions about passenger travel histories and conditions, noting that medical staff had collected swabs for “a few cases of ‘febrile, influenza test negative’ individuals.” Von Watzdorf had attached the required spreadsheet listing the names, conditions, and temperatures of passengers with flu-like symptoms.
The decision on how to treat the Ruby lay not with Ressler, but with a separate panel of public-health experts. They didn’t find the numbers alarming. Many patients had come to the medical clinic during the journey back, but that might have been explained by announcements instructing passengers with coughs or other respiratory issues to get checked, rather than because the virus was spreading. No one had recently been to the highest-risk countries, and the ILI ratio was a bit below 1%, with a considerable number of people testing positive for the flu. The panel determined that the Ruby was low-risk but advised that swabs from some of the symptomatic passengers be tested for coronavirus, just in case.
On board, things were getting weird. As the boat neared port, Percy Anderson, a 75-year-old from Queensland, entered an elevator to find a heavyset younger man in a hoodie zipped all the way up to cover his mouth and nose. The woman with him was wearing a surgical mask, and both appeared to be having trouble breathing. Anderson and his wife, Esther, “exchanged a glance but didn’t say anything,” he later told investigators. Another passenger, Paul Reid, recalled going to the clinic with a cough and sore throat; he said a doctor swabbed his nose and soon told him “you don’t have corona.” Reid assumed that meant he was negative for Covid-19, but the medical team had no ability to perform such a test.
Fish was still hoping to relax. She booked a treatment at the spa in anticipation of the long journey back to Florida. Afterward she felt strange -- stiff and so tired that “I didn’t want to get up the next day.” She figured it was the fatigue of the trip catching up to her.
Late on March 18, a call came in to Vessel Traffic Services (VTS), the office responsible for managing movements in Sydney Harbor. Someone from the state ambulance service was on the line, requesting an update on the Ruby. A port manager, Cameron Butchart, found the call unusual. Ambulances were frequently dispatched to cruise arrivals, given the medical problems that could befall elderly passengers, but the office rarely got a heads-up. Butchart called back to find out more. “We’ve got two bookings here for Carnival Australia for a cruise ship that’s coming in at 2:30 with two suspected corona patients on board,” an ambulance coordinator told him. “We just wanted to know if the ship was actually coming into port, and if [they’re] allowed to disembark.” The ambulance official said they’d reached out to their contact at Carnival but got only voicemail.
Alarmed, Butchart hung up and started calling people at Carnival. No one answered. He emailed a colleague and asked him to stop the Ruby from docking. “Advise the ship that their booking is denied,” he wrote. “They’re to have their agent contact Sydney VTS urgently.”
Port officials ultimately reached Carnival staff. According to investigative documents, they said they’d requested the ambulances for a passenger with severe leg pain and another with cardiac trouble, not because of suspected coronavirus infections. Given that and the health agency’s designation, the port authority agreed that the Ruby was clear to land. At 2:30 a.m., it moored at Circular Quay. Disembarkation would begin first thing in the morning.
“I hear the lady in front of me cough. Two seconds after that, the guy behind me coughs. Then the guy to my right. And I said to my husband, ‘Everyone on this bus is sick’ ”
By 9 a.m. the sidewalk outside the terminal was dense with passengers. Anderson and his wife had a flight later that day to Brisbane, so they took a packed bus to Sydney Airport. They were in the check-in queue when they noticed a commotion behind them: A woman had collapsed. Anderson immediately recognized her and the man kneeling at her side as the pair he’d seen laboring to breathe in the Ruby Princess elevator. Paramedics soon arrived with a stretcher.
Fish had also boarded a bus to the airport with other passengers. “I sat down, leaving some space,” she says. “And I hear the lady in front of me cough. Two seconds after that, the guy behind me coughs. Then the guy to my right. And I said to my husband, ‘Everyone on this bus is sick.’ ”
Meanwhile, Ressler was waiting for the results of the swab tests from the Rubymost of them for passengers who’d already scattered. That afternoon she logged on to an online lab portal to check if they were done. They weren’t. They hadn’t even been registered in the system. She phoned the lab and was told they’d be tested soon.
Early the next morning she logged in again. Three of the swabs, she saw, were positive. One was from a crew member still on board. Another was from a Tasmanian guest. The third was from a woman named Lesley Bacon, who’d been one of the patients taken off in an ambulance, suffering from leg pain. (Von Watzdorf had told health authorities that both passengers also had respiratory symptoms.)
The Ruby, Ressler was learning too late, had been anything but low-risk. The state government rushed to deploy contact tracers while officials convened conference calls to figure out what had gone wrong. Time was growing short to contain the spread.
Toward the end of the day, Ressler noticed something odd: Some of the people who’d been tested for coronavirus weren’t on the list of symptomatic passengers and crew sent on March 18. By this point there were at least four positive results, including one for the other patient who’d left in an ambulance. Ressler sent a WhatsApp message to von Watzdorf. “Do you have an updated ARI log?” she asked, referring to acute respiratory illness. “Some of the later people swabbed aren’t on the one I have. Did you add any more patients after you sent it to me?”
Von Watzdorf responded six minutes later. “I’ll send it now. Sorry, I forgot that the last one was from the morning. It was so crazy.” The updated numbers weren’t drastically higher, but they did differ in one crucial respect: The ILI ratio was almost 1.3%, well above the 1% threshold that indicated a higher level of risk. The Ruby had also been updating a separate government platform with information on reported passenger illnesses until early evening on March 18, but Ressler later testified that she wasn’t aware of that data.
“I keep on asking myself what I could’ve done better to protect people,” von Watzdorf wrote to Ressler that night.
Ressler replied almost immediately. “Yeah, there will be more cases. Probably a lot.”
The Ruby’s passengers were all over Australia and beyond, having in some cases caught the final flights before international borders closed. Carnival had provided officials with a list of emails and phone numbers so everyone could be reached, but the details weren’t all correct, and some passengers didn’t pick up their phones or had turned them off. By the evening of Friday, March 20, contact tracers had managed to reach only 44 of the 570 international guests they’d tried. Over the weekend, Qantas Airways reported to officials that 170 “close contacts from the Ruby Princess” had flown to the U.S. on March 21. It was only the following night that the Australian Border Force put Ruby passengers on a list that would prompt a “do not board” alert at check-in desks.
Fish had been unaware of the positive cases when she boarded her flight back to the U.S. on March 19. She found out only when she landed in San Francisco for her connection to Florida and some of her group got contact-tracing calls. As it happened, she’d begun feeling sick herself. Really sick. The airport was almost deserted, and she found an isolated bench, laid down her head, and went to sleep. “I knew I had a fever. I just sat away from everyone else, and I wanted to get tested as soon as possible,” she says.
After getting home, Fish slept for almost 12 hours straight. When she woke up she found an urgent-care center that could test her. The results confirmed her suspicions: She was positive. Her husband turned out to be, as well. “I was in bed for 10 days,” she says. “It knocks you out. All you want to do is sleep and sweat.”
Positive tests from the Ruby were popping up all over Australia, too. Wright, the former mortgage broker, thought he had a cold when he reached his home, south of Sydney, so he took some flu pills and an antihistamine. Two days later a friend who’d also been on the cruise called. Her husband had been taken to the hospital in an ambulance, suffering from complications of Covid-19. The Wrights got tested; both were positive. They recovered without complications.
Another two Ruby passengers, Graeme Lake, a 72-year-old Vietnam veteran, and his wife, Karla, were self-isolating at home near Brisbane. They’d heard on March 20 that a friend who’d been on board had tested positive for the coronavirus. Karla had a dry cough herself, but that wasn’t unusual; it was a side effect of medication she took for her arthritis. Still, the couple went to a makeshift clinic outside a local hospital. The staff wouldn’t give Graeme a test, because he didn’t have symptoms, but Karla got one. She also had a fever, and the hospital kept her to wait for the results.
The next morning, Karla called to tell Graeme she’d tested positive. He soon noticed he was also getting sick“lousy, like a cold, heavy in the chest,” he later told police. It seemed to be getting worse, and the next week an ambulance brought him back to the hospital. He had the virus, too. The next day he was moved into the same room as Karla, who was “coughing terribly,” he said. “It was shocking.” Soon she was in the intensive care unit, where she could get more oxygen. Graeme moved with her, taking a bed a few feet away.
In the early hours of March 29, he stopped hearing the sound of her breathing. He got up and took her hand to feel for a pulse. “I could tell then that she had passed away,” he said. He stayed with her for a while, then went back to his own bed, unsure what to do next. “I had just watched my wife die, and there was nothing I could do.”
In Hobart, Keal, the Tasmanian retiree, had also tested positive. At home one day, he says, “I got up, had breakfast, and couldn’t lift my head off the table.” An ambulance brought him to the hospital, where doctors sent him to the ICU and put him on a ventilator. He has only vague memories of what followed, a period of heavy sedation and lurid dreams. At one point he woke up with doctors and nurses gathered around his bed. “I remember the fear around me, just the sheer panic,” Keal says. “I was almost crying, asking, ‘Am I going to be all right?’ And I could tell from the answers that I wasn’t.”
Keal’s wife, Rosie, and their daughter came to see him for what they feared would be the last time, donning gowns, masks, goggles, and gloves to enter the room. Their son was reluctant to come. He didn’t want his final memory of his father, an athletic man who’d competed nine times in the notoriously difficult Sydney-to-Hobart sailing race, to be of him hooked up to a ventilator, sensors, and IV drips.
Keal spent 11 days that way before finally recovering. Months later he still isn’t feeling like himself. He’s often short of breath, has trouble sleeping, and struggles with severe pain in his hands. “I reckon out of the six that we went with” on the cruise, Keal says, “I was the fittest. And yet look at how I came out.”
“We thought it was a holiday from then on. A cruise without passengers -- it was really exciting,” a crew member recalls. But soon, another said on Facebook, it felt like “a five-star floating prison”
Only one group aboard the Ruby was treated almost from the start as potential carriers of the virus. Its 1,000-plus crew members, many from countries like Indonesia and the Philippines, weren’t allowed to disembark in Sydney. “There are thousands of people, potentially, in cruise ships off our coasts that aren’t members of our state, and if we take them in, then that could well flood our system,” said Mick Fuller, the New South Wales Police Force commissioner. “It’s time to go to your port of origin.”
But that directive was all but meaningless for a company like Carnival, a tangle of financial engineering that’s incorporated in Panama and the U.K., operates out of Miami, and flags its ships in tax havens such as Bermuda, the Ruby’s nominal home port. For the moment, those on board would remain while the company figured out where it could sail.
With the passengers gone, the crew became, in effect, their own guests. On March 19 a “sail-away party” took place around one of the pools, with the Sydney skyline towering above. There was a dance performance, and an emcee promised “a great cruise” ahead. “It has been a challenging time, but you have done an amazing job,” he said. It seemed, to some at least, as if it were the beginning of a well-deserved break. “We thought it was a holiday from then on,” says Byron Sodani, an Italian fitness trainer who’d been working on the ship since January. “A cruise without passengers -- it was really exciting.”
But it was also a cruise without a destination. The Ruby soon left the harbor to wait offshore, where its medical staff attended to an increasing number of personnel with respiratory symptoms. A Filipino crewman, who asked not to be identified because he feared consequences for speaking to the media, recalls that more and more of his colleagues were being transferred from their cramped shared accommodations to passenger cabins where they could more easily isolate. There were several dozen on the first day of moving, then hundreds more over the next couple of days. “It was very scary, because you don’t know what’s going on,” the crewman says. Only the sickest staff were permitted to return to Sydney for treatment.
With opposition politicians and trade unions raising the alarm about conditions on the Ruby, Australian officials in early April allowed it to dock -- not at Circular Quay, where it would be in full view of much of Sydney, but at Port Kembla, an out-of-the-way industrial harbor. There, the ship became, as Paul Holmes, a British pianist on board, put it in a Facebook video, “a five-star floating prison.” Almost everyone was confined to quarters, permitted to open the door only to accept food or attend to medical needs. Police officers and soldiers guarded the pier. One night detectives came aboard in head-to-toe hazmat gear to seize the vessel’s black box-style data recorder and other evidence.
The state government was desperate to resolve the situation. “I’ve drawn a line in the sand and I want this ship gone,” Fuller told the Australian. But sending it back to sea full of Covid-19 patients would have been unconscionable. By mid-April more than 10% of the crew had tested positive. It took until late in the month to arrive at a solution. Everyone on board was tested, with a substantial number of those whose samples came back negative permitted to depart by air. Sodani disembarked within hours of being cleared for departure. He was taken to the Sheraton in central Sydney, where he remained until flying out to Doha and on to Rome.
Staff from poorer countries had a more difficult time. Despite protests by sympathetic groups who argued that Australia should help them get home, about 500 crew -- largely from developing nations with limited ability to organize repatriation efforts -- stayed on the Ruby to sail to Manila, the capital of one of the few countries admitting cruise ships to their waters. The Filipino crewman was relatively fortunate, permitted to disembark on April 23 so he could take a charter flight from Sydney; other staff endured the two-week boat trip to the Philippines, then waited weeks for permission to come ashore.
Even so, the crewman had to spend more than three weeks quarantined in a Manila hotel before he was allowed to begin the 18-hour ferry journey to his home province. He was quarantined for a further two weeks there. He was finally free on June 4, 77 days after the cruise’s guests disembarked.
The Ruby Princess is now anchored off the coast of Malaysia. It’s not yet clear whether anyone will be held to account for what happened on board. In all, at least 663 guests and 191 crew are known to have been infected with coronavirus. The 28 people who died20 in Australia and eight in the U.S.represent a toll twice as large as that of the Diamond Princess, the vessel that recorded the next-highest number of fatalities. Barring stupendous negligence on some future voyage, the Ruby is likely, when the history of the pandemic is written, to retain the distinction of having incubated its deadliest marine outbreak.
The New South Wales Police Force is still engaged in a lengthy investigation, while lawsuits in Australia and California are in their early stages. The public inquiry, led by a prominent Sydney lawyer, published its report on Aug. 14, finding that Carnival and the Ruby’s medical staff had generally complied with public-health requirements. It did say that von Watzdorf should have made sure public-health officials were aware of how many sick passengers had arrived after she sent her initial disease logan “oversight” that, if avoided, might have changed outcomes. Whether the company should have been operating ships at all, given what was already known about the virus and cruises, wasn’t part of the inquiry’s brief.
The report’s sharpest criticism was reserved for the process the government used to clear the Ruby to dock, which it said was marked by “serious errors.” It called the decision to deem the vessel low-risk “as inexplicable as it is unjustifiable.” Ressler, the state epidemiologist, had broken down in tears while testifying. “We did what we could,” she said, her voice unsteady. “If we could do it again, it would be very different.” After the report’s release, Princess issued a statement expressing “profound sorrow” about the deaths. New South Wales Premier Gladys Berejiklian said she wished to “apologize unreservedly” for “mistakes” by health personnel.
Nowhere were the tragic consequences more apparent than in northwest Tasmania, an economically struggling, largely rural corner of Australia’s smallest state. The first sick passenger from the Ruby Princess arrived at the North West Regional Hospital (NWRH), in the town of Burnie, shortly after the vessel got back to Sydney. Another was admitted about a week later. By early April, an investigation by the state health authority found, one or both of them had likely become “the original source” of a chain of Covid-19 cases among nurses and other care personnel. Some continued to work while experiencing symptoms, and the virus spread rapidly among departments, infecting staff and patients alike. Unable to contain the outbreak any other way, on April 12 the Tasmanian government announced it would shut down the hospital, ordering employees and their families into an immediate 14-day quarantine. Military doctors had to fly in to handle emergencies. In all, 138 people in the region were infected, 10 of whom died.
The outbreak was random in its cruelty. One couple, Bill and Adrienne Krist, had lived in the northwestern part of the island for more than 40 years. They’d met in Sydney when Adrienne was still a rebellious teenager hanging out in a red-light-district pub and Bill was in the navy. The bar was the first watering hole he’d spotted after his ship docked one day. They were soon married and later moved to Ulverstone, a midsize town about a half-hour’s drive from Burnie. They raised three daughters in a house with a view out to sea. Bill worked on a tugboat, and at the end of the day Adrienne could tell when he’d be home by how far out he was.
At 79, Bill was slowing down. He had emphysema and needed an oxygen tank to breathe comfortably. “Other than that he was in pretty good nick. He was still enjoying life,” Adrienne says. “We were enjoying our old age.”
In early April, Bill told Adrienne he wasn’t feeling well and ought to go get checked out. She drove, and as they left home she asked Bill whether he wanted to go left -- to Burnie and the NWRH -- or right, to a hospital in another town. He preferred the Burnie road, a scenic route that traces the edge of the Bass Strait, so “that’s the way we went,” Adrienne says.
The hospital admitted Bill right away. At first there were “no obvious virus precautions,” she recalls. But when he took a turn for the worse a few days later, she was told she’d have to go. “I said, ‘No, I stay.’ And then they put me in one of those yellow gowns, gloves, shoe covers, big goggles over my spectacles.” At one point, she says, “I bent down to kiss him, and a nurse came over and just about put her hand in front of my face.” Still, Adrienne refused to leave. “We’d made wedding vows, and we believed in what we said, so when they wanted to shuffle me out, I said, ‘No, I can’t go. If he’s dying, I have to stay.’ ”
Bill died on April 10, the day after the couple’s 57th wedding anniversary. Adrienne was told only near the end that he’d been diagnosed with Covid-19, almost certainly acquired while he was in the hospital“secondhand or thirdhand from the Ruby Princess,” as she now knows. At first, she found it hard to understand how the virus could have made it all the way to her isolated corner of the world. “I thought, ‘That comes from cruise ships. And we haven’t even been near a cruise ship.’ ”
-- With Jason Scott
© 2020 Bloomberg L.P.
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| From: Jon Koplik | 9/24/2020 3:17:19 PM | | | | | | Bloomberg / For Carnival, ‘Death on the High Seas Act’ Protects the Bottom Line .................
Updated September 23, 2020
For Carnival, ‘Death on the High Seas Act’ Protects the Bottom Line
By Christopher Yasiejko
For passengers killed by virus, payout may be just burial cost
Century-old maritime law limits damages for shipping industry
Carnival Corp. is poised to dramatically curb monetary damages for passengers killed by the coronavirus under the latest court decision to side with the company.
If a ruling Monday by a Los Angeles federal judge is followed by others, it could offer the cruise line something of a safe harbor under the Death on the High Seas Act. The century-old federal law limits payouts for survivors to “pecuniary” damages such as how much the deceased contributed through wages or housework. One maritime lawyer said that in the case of retirees, who make up a large portion of Carnival’s customers, the recovery may amount to little more than burial costs.
The subject of the ruling was a 71-year-old man who died in April after allegedly contracting Covid-19 while cruising on the Coral Princess. His family was trying to keep its wrongful-death lawsuit in state court, where they were seeking punitive damages as well as recovery for other losses. But the judge said the only way to proceed was under federal law.
The ruling comes as Carnival and other major cruise lines including Royal Caribbean Cruises Ltd. are seeking a nod from the U.S. Centers for Disease Control and Prevention to return to sailing after the CDC’s “no sail” order expires at the end of the month. The industry, one of the most heavily battered by the virus, is putting in place new rules to entice vacationers back onto its boats, announcing through a trade group this week that it will require Covid-19 tests for guests and crew. Masks will be mandatory whenever social distancing isn’t possible.
Carnival’s Princess Cruise Lines Ltd. declined to comment on pending litigation. Shares in the company were up by as much as 4.44% after markets opened in New York and had leveled to $14.53 at 10:35 a.m. Before Wednesday, the stock had declined 72% this year.
“Princess Cruises has been sensitive to the difficulties the Covid-19 outbreak has caused to our guests and crew,” spokesperson Negin Kamali said in an email. “Our response throughout this process has focused on the well-being of our guests and crew within the parameters dictated to us by the government agencies involved and the evolving medical understanding of this new illness.”
Princess Cruise Lines already scored a significant victory in another case by convincing a judge that mere exposure to Covid-19 doesn’t give passengers grounds to sue for emotional distress.
In the case in which the court ruled Monday, the family of Wilson Maa tried to argue that the federal law didn’t apply because he died after returning to shore -- not while at sea.
1920 Law
But U.S. District Judge Dale Fischer agreed with Carnival’s argument that where he died was irrelevant because the alleged negligence occurred “on the high seas beyond 3 nautical miles from the shore of the United States.”
“It is clear from the face of the complaint,” the judge wrote in Monday’s ruling, that the deceased passenger “contracted Covid-19 on the ‘high seas.’”
Lawyers for Maa’s estate didn’t immediately respond to a request for comment.
“Basically, the question to the widow is, ‘What did it cost you to lose your husband?’” said Charles Naylor, a lawyer who specializes in maritime injury and death. “‘If it didn’t cost you anything, we don’t owe you a nickel.’”
Naylor, who in his own practice is not taking on Covid-19 cases, said the 1920 law is “very out of step with modern wrongful-death statutes.”
Naylor said that if the ruling survives a likely appeal, the vast majority of Covid-19 cases among cruise line passengers will proceed under the 1920 law, “which will strictly limit the damages.”
In another Los Angeles case over the virus outbreak on the Coral Princess, a North Carolina passenger contends Carnival had detailed knowledge of the threat posed by a contagion, but jeopardized public health when the ship “seeded the shores of California” with infected passengers.
That passenger says in her recently filed revised complaint that the Coral Princess has had “significant viral outbreaks at least eight times since 2004.”
The wrongful-death case is Maa v. Carnival Corp. & Plc, 20-cv-6341, U.S. District Court, Central District of California (Los Angeles).
© 2020 Bloomberg L.P.
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| From: Jon Koplik | 11/17/2020 3:48:27 PM | | | | | | Bloomberg -- Billions in New Cruise Ships Are Ready to Sail, With Nowhere to Go ................
November 17, 2020
Billions in New Cruise Ships Are Ready to Sail, With Nowhere to Go
Around the world, cruise lines are cutting the ribbon on extremely expensive new vessels -- then keeping them indefinitely docked.
By Fran Golden
Normally, when a new ship wraps construction at a shipyard, it’s cause for a party, with executives in sharp suits and free-flowing Champagne. But when the sparkling 596-passenger ultraluxury ship Silver Moon joined Royal Caribbean Group’s elite Silversea Cruises brand in late October -- the culmination of a $380 million, 20-month project -- there was little pomp and circumstance. No media were on hand at the Italian shipyard to ooh and ahh over such exquisite design features as bespoke Lalique panels in the French restaurant and handcrafted Savoir beds in the top suites.
This time, even Royal Caribbean’s top brass bowed out of the celebration and teleconferenced from Miami. And the ship’s handover, in Ancona, Italy, came with a cringe. After all, Silver Moon has nowhere to go. With border restrictions and a second wave of the Covid-19 pandemic freezing all kinds of travel, she may have to wait at least until spring to make her maiden voyage -- and start turning any kind of profit.
“It’s very painful in many ways,” says Jason Liberty, Royal Caribbean Group’s executive vice president and chief financial officer. “All this energy -- whether it’s design, creating unique activities and venues -- obviously you’re investing money as well, and you take delivery of the ship and you can’t do what you do best: delivering the best vacations in the world.”
Liberty isn’t alone in his frustration. At least 10 ships -- ranging in cost from $75 million to near $1 billion -- have wrapped construction amid the pandemic, representing an industry investment of more than $3.84 billion. Three additional vessels debuted at the beginning of the year. Most are stuck in holding patterns until the U.S. Centers for Disease Control and Prevention and its counterparts around the world greenlight a return to cruising.
All Dressed Up, With Nowhere to Go
At this point last year, 2020 had been predicted in the cruise world as the beginning of a boom decade for ship building. According to trade publication Cruise Industry News, the year started with 117 cruise ships on order by 2027, a new record in the history of cruising. After all, the industry’s fast-growing popularity -- 32 million projected cruisers in 2020, up from 30 million in 2019 -- made new tonnage feel like a foolproof bet. Now it just feels like a sunk cost, adding to billions of dollars in quarterly losses that some companies were already experiencing.
Entirely new brands, such as the adults-only Virgin Voyages and the luxe Ritz-Carlton Yacht Collection, may be among the hardest-hit. They’ve invested in multiple ships, with no previous revenue to defray costs, only to have their first planned year of operation wiped out. Worse, they cater to a new-to-cruise market that may be especially skeptical in the post-pandemic world. (Both debuts have moved to 2021.) Also launching next year is new luxury expedition brand Atlas Ocean Voyages -- which has added complimentary Covid-19 health insurance to its all-inclusive fares.
Boom Gone Bust
Of the 13 ships that have wrapped construction in 2020, few have carried guests. In addition to Silver Moon, they include the French-built, 2,918-passenger Celebrity Apex -- whose high-tech features such as an off-the-ship “Magic Carpet” platform drove the cost up to nearly $1 billion -- and the 100-passenger Silver Origin, which will sail the Galapagos region with butler-serviced suites.
Many of these debuts should have been media juggernauts for the ships’ parent companies, none more so than Windstar Cruises’ first “stretched” ship, set to debut later this month after being cut in half and getting stitched back together with 84 feet added to its midsection. The major transformation of the 312-passenger Star Breeze -- which adds 50 suites to each deck -- has been anticipated for two years; now, it will get shown off quickly via video feed and remain docked, indefinitely, at its shipyard in Sicily.
“Who would have thought a year ago that you would bring out a ship and not immediately put it into operations?” says Christopher Prelog, president of Windstar Cruises. Originally set to sail on June 29 before a delivery delay, Star Breeze will now be held in place until the end of March, costing Windstar roughly $1 million a week in lost fares.
Silver Linings
On the plus side, Prelog says that virtual handovers avoid the last-minute stress of scrambling to get a ship ready for guests. “The focus now is to maintain it so that when the guests do come on board, it still has that sparkly and newness factor to it.”
Then there are construction delays, which usually come as bad news. They’ve been common this year, because of temporary shipyard shutdowns -- good news these days, given that executives rarely sign the biggest checks until the job is done. Some vessels were delayed up to 10 months, with more than two dozen now slated to debut in 2021. That should help minimize cash drain until sailings resume, which may not happen until well into next year, depending on border reopenings and whether the industry can prove operations are safe before a vaccine is widely rolled out.
Plus, brands will be armed with plenty of buzz whenever it’s safe to set sail again. New ships such as Carnival’s forthcoming 5,282-passenger Mardi Gras, outfitted with the first roller coaster at sea, tend to draw loyalists who want to be the first onboard, as well as new-to-cruise travelers looking to try the latest and greatest.
Will all this new-ship buzz help the industry recover from last winter’s images of hazmat-suited health officials investigating shipboard Covid-19 outbreaks? Barbara Muckermann, Silversea’s chief marketing officer, says it will, and she'll have an unprecedented three ships to showcase next year. “New ships provide a lot of marketing excitement, and I think that’s needed,” adds Liberty.
Still, that’s only true if she and her peers can persuade the market that cruising is safe -- a looming question mark, given that at least three small-ship companies have already experienced Covid-19 outbreaks aboard vessels since resuming sailing this summer, even in the face of stringent precautions such as operating in a so-called “bubble” in which all guests quarantine and get PCR-tested before boarding.
Glitz and glamour is great, says Windstar’s Prelog, who adds that “safe to cruise has to be the main message.”
© 2020 Bloomberg L.P.
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| From: Jon Koplik | 3/2/2021 1:01:08 AM | | | | | | WSJ / "latest" on Royal Caribbean / Could Pay Down Debt After Share Sale .................................
March 1, 2021
Royal Caribbean CFO to Bolster Liquidity, Could Pay Down Debt After Share Sale
The cruise operator is offering 16.94 million shares at $91 apiece
By Nina Trentmann and Dave Sebastian
Royal Caribbean Group’s finance chief plans to use the proceeds from a $1.5 billion share sale to boost the cruise operator’s liquidity and, potentially, to reduce its debt, which ballooned during the pandemic.
The Miami-based company, which is nearing the first anniversary since it stopped sailings in North America, said Monday it has launched an equity offering of 16.94 million shares at $91 apiece. The sale is expected to close Wednesday and provide Royal Caribbean with additional funds, Chief Financial Officer Jason Liberty said.
“We are always evaluating and opportunistic about accessing the capital markets. We saw an opportunity here,” Mr. Liberty said.
The fresh capital could help the company pay down its debt, Mr. Liberty added, noting that “last year, we took on a lot of debt.”
Royal Caribbean’s net debt rose more than 42% to $16.45 billion in 2020 from the prior year, according to S&P Global Ratings, a data provider and ratings firm. The cruise operator, which ended 2020 with about $4.4 billion in cash, expects to burn through between $250 million and $290 million a month during the hiatus, Mr. Liberty said. Royal Caribbean last week reported a net loss of $5.8 billion for 2020, compared with net income of $1.9 billion in 2019.
Royal Caribbean has suspended sailings on most of its ships through at least April 30. Its peers Carnival Corp.’s Carnival Cruise Line and Norwegian Cruise Line Holdings Ltd. have scrapped U.S. sailings through the end of May. Mr. Liberty declined to comment on whether Royal Caribbean would extend its sailing suspension.
The timing for resuming U.S. voyages ultimately depends on obtaining a permit from the U.S. Centers for Disease Control and Prevention, which requires operators to conduct mock sailings and apply for permits at least 60 days before offering passenger cruises. Mr. Liberty said Royal Caribbean is in touch with the CDC, but declined to comment further.
A CDC spokesman last week said no cruise operator has held mock voyages or applied for a permit, as the CDC has yet to publish technical instructions for agreements between cruise operators and port and local health authorities.
Canada recently extended its cruise ban by a year to February 2022. Royal Caribbean is currently considering if and how it could offer travel to Alaska and New England despite the Canadian ban, Mr. Liberty said.
Mr. Liberty will see some more cash coming in when the company’s sale of its Azamara business closes. Royal Caribbean in January said it had agreed to sell the cruise line to private-equity firm Sycamore Partners for $201 million in cash. “Every dollar counts,” Mr. Liberty said about the transaction.
He declined to comment on how much Royal Caribbean would need to spend on health and safety measures once it resumes the majority of its operations. “The range is too extreme to provide an estimate for it,” Mr. Liberty said. Competitor Norwegian has said it has put aside about $300 million for health and safety efforts.
Royal Caribbean’s equity offering was received positively by S&P. The ratings firm said the stock sale would provide the cruise operator with “a liquidity cushion to support its ongoing cash burn while operations remain suspended and as they gradually resume.”
The proceeds also could help Royal Caribbean reduce its leverage levels, S&P said.
S&P last week downgraded its issuer-credit rating on Royal Caribbean further below investment-grade. Mr. Liberty said Royal Caribbean wants to return to an investment-grade rating, but didn’t provide a specific timeline for that.
Write to Nina Trentmann at Nina.Trentmann@wsj.com and Dave Sebastian at dave.sebastian@wsj.com
Copyright © 2021 Dow Jones & Company, Inc.
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| From: Jon Koplik | 4/6/2021 9:55:43 PM | | | | | | Bloomberg -- CDC Says Cruises Possible by Mid-Summer as Tensions Boil Over ......................................
April 6, 2021
CDC Says Cruises Possible by Mid-Summer as Tensions Boil Over
By Jonathan Levin
Agency responds after Carnival threatens to relocate ships
Shares rise on optimism that companies can resume voyages
U.S. cruises could resume by mid-summer with restrictions, the Centers for Disease Control and Prevention said Tuesday after Carnival Corp., the largest operator, threatened to relocate ships to other markets.
The agency’s signal sent shares of cruise companies rising in after-market trading, with Carnival gaining as much as 4.9%. Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. also advanced.
The industry has been pressuring the agency, saying it is restricting their return to the seas even as other hospitality industries like hotels and theme parks reopen. Earlier Tuesday, Carnival threatened to move some U.S. ships to other ports, more than a year after the industry essentially went on hiatus over the Covid-19 pandemic.
The CDC technically lifted its ban on cruises in October but issued a so-called conditional order with a multi-step process that companies must meet to sail again. They claim the process is overly burdensome, that the CDC hasn’t met its own timeline, and that the whole process treats them more harshly than other tourism-related businesses. They need about 90 days to prepare ships to sail again, and the uncertainties of the process have left them in limbo.
“CDC is committed to working with the cruise industry and seaport partners to resume cruising following the phased approach outlined in the conditional sailing order,” CDC spokeswoman Jade Fulce said in a response to questions about Carnival. “This goal aligns with the desire to resume passenger operations in the United States expressed by many major cruise ship operators and travelers; hopefully, by mid-summer with restricted revenue sailings.”
‘No Choice’
Carnival warned that its namesake cruise line won’t sit by if the CDC’s process drags on.
“While we have not made plans to move Carnival Cruise Line ships outside of our U.S. home ports, we may have no choice but to do so in order to resume our operations, which have been on ‘pause’ for over a year,” Christine Duffy, president of the company’s namesake Carnival division, said in a statement Tuesday.
The brand is extending the suspension of U.S. operations through the end of June. But under current government restrictions, management essentially had no choice. The company’s Seabourn luxury division announced plans on Tuesday to restart cruises from Greece in July.
The cruise industry in recent weeks has called on the CDC to let voyages from U.S. ports resume by Independence Day, when President Joe Biden has said the country can return to a version of normal. Florida Governor Ron DeSantis, whose state is home to the major lines and a gateway port for Caribbean cruises, added to their voices.
Norwegian Cruise Line Holdings Ltd., the No. 3 player, said Monday it plans to start cruising from U.S. ports on July 4 with fully vaccinated guests and crew.
Cruise Lines International Association, the lobbying group that represents most of the companies, wants the CDC to drop the conditional framework completely and guarantee that sailings can start by July.
© 2021 Bloomberg L.P.
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| From: Jon Koplik | 6/1/2021 3:15:23 PM | | | | | | WSJ -- shipping industry / difficulty / 2050 emissions-reduction target ...............................
Shipping Matters
May 27, 2021
Shipping’s Carbon-Cutting Fuel Tanks So Far Remain Empty
The industry faces a 2050 emissions-reduction target with choices yet to be made on what clean fuels to use
By Costas Paris
Imagine going to a car dealership for a new vehicle that’s climate friendly and being told that it isn’t clear what clean fuels will be available to fill it up, or how much those fuels will cost. You probably would walk away or opt for a car that runs on gasoline.
That’s the dilemma faced by the shipping industry as it looks to shift to cleaner vessels to meet emissions reduction goals.
The industry has agreed to boost the global fleet’s energy efficiency by at least 40% over the next decade and cut overall greenhouse-gas emissions from ship exhaust in half by 2050 compared with 2008 levels.
The difference with cars is that a cargo ship’s lifespan is around 25 years and it takes around two years to build a cargo vessel. If the owners want to meet the deadlines without crashing their operating budgets they will have to start buying zero-emission vessels within a few years, but there is no consensus yet on how green ships will be powered.
“We can build green vessels, but with no consensus on what kind of fuel will be used, the deadlines are just a theoretical exercise that can’t be met,” said a senior executive at Korea Shipbuilding & Offshore Engineering Co., one of the world’s largest yards. “First you need the fuels, then the necessary volumes and a global bunkering network that will all have to come together at a competitive price. We’re only at the start of a long and expensive process.”
The focus on new fuel sources marks the biggest change in ship power since the sector switched from coal to the high-polluting heavy oil known as bunker more than 100 years ago.
The deadlines, set by the International Maritime Organization, the United Nations marine regulator in 2018, likely will become more stringent in 2023 when the body meets to review its strategy. Shipping services provider Clarkson Research Services Ltd. has estimated that it may cost the industry more than $3 trillion for ships to switch to new forms of power.
The choices by carriers will carry high stakes for shipping customers.
Shipping executives say they would seek to pass at least some of the costs of switching fuel sources along to cargo owners. That would drive up expenses in international supply chains for big retailers like Walmart Inc. and Amazon.com Inc., mining companies, and agricultural exporters moving raw materials in bulk.
Such companies also are looking to reduce the carbon footprint across their supply chains, so they may be able to incorporate some of the cutbacks in shipping pollution into assessments of their own operations.
If there is ample supply of new fuels, freight rates for transport on green ships may be similar to the price of shipping on vessels that run on traditional oil. But industry executives say they are bracing for higher costs.
“The tricky thing is that any zero-emission alternative is so far more expensive than oil,” said Lars Robert Pedersen, deputy secretary general of Denmark-based shipping trade body Bimco. “If you have to run a ship on fuel three times as expensive as bunker oil, you are out of business. The freight rates won’t cover it because cargo owners will go with the cheapest vessel.”
The alternative fuels attracting the most attention and investment so far include ammonia and biofuels. The International Energy Association said this month that if the global energy sector reaches net-zero emissions in 2050, ammonia could account for 45% of energy demand from shipping.
The Korean Registry of Shipping said earlier this month that more ammonia plants would come on line starting in 2025, allowing production of the chemical as a fuel at an estimated $650 to $850 per metric ton. By comparison, the bunker fuel currently used averaged $454 per ton for mid-May deliveries.
Ammonia is already a traded commodity, but there are complications with using it on ships.
“Ammonia is very toxic if it spills,” Mr. Pedersen said, “It also burns poorly and it’s difficult to ignite. The ratio of ammonia versus oxygen in the combustion chamber has to be very accurate. If not, the engine will cough and stall.”
‘If you have to run a ship on fuel three times as expensive as bunker oil, you are out of business.’
Lars Robert Pedersen, deputy secretary general of Bimco
An executive at a major state-owned shipbuilder in China said ammonia-powered ships would need special ventilation systems because of the chemical’s toxicity and because engine parts like valves can corrode quickly once exposed to ammonia.
“The ship must have gas masks and personal protection equipment for everyone aboard, in case it leaks,” he said. “This means the fuel won’t work for passenger vessels. It’s too much of a risk.”
Sustainable biofuels could provide about 20% of total shipping energy needs, according to the IEA. Danish shipping giant A.P. Moller Maersk A/S will add to its network what is expected to be the first ship that will run on biomethanol in 2023 and says it plans to make its fleet entirely carbon-neutral by 2050.
Biomethanol can be sourced from paper-mill waste and other byproducts, or by mixing hydrogen with carbon dioxide trapped from industrial exhaust systems.
Palm oil and sugar cane are main sources of biofuels, raising critical environmental questions because of the impact of sourcing the materials. Farming of those materials can involve cutting back rainforests, which can have a negative environmental effect and defeat the purpose of reducing CO2 levels in ship operations.
The U.S. and the European Union both are aiming to reach net-zero greenhouse-gas emissions by 2050 as part of their commitments to the Paris Agreement on climate change.
Net-zero emissions mean that the amount of greenhouse gasses produced will be equal to the amount taken out of the atmosphere.
“With climate change in the forefront, you would expect orders of green ships to be coming in,” the state shipbuilding executive in China said. “But it’s not happening. We got blueprints and some inquiries, but the orders are for conventional ships.”
Write to Costas Paris at costas.paris@wsj.com
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| From: Jon Koplik | 9/22/2021 7:05:01 PM | | | | | | Cato Institute -- Alaska Delegation Targets Cruise Ship Protectionism ................................................
September 17, 2021
Alaska Delegation Targets Cruise Ship Protectionism
By Colin Grabow
After decades of maritime protectionism diverting Alaska bound cruise ships (and tourist dollars) to Canadian ports, some measure of common sense may finally prevail. Earlier this week Sen. Lisa Murkowski (R-AK) announced her forthcoming introduction of legislation to ease the burden of the Passenger Vessel Services Act (PVSA) on Alaska. In so doing, Murkowski will become the second member of Alaska’s congressional delegation to target the PVSA in recent months, with Rep. Don Young putting forth a separate bill in July to loosen the law’s shackles.
It’s welcome news. Legislation to pare back the PVSA is long overdue, particularly for Alaska.
Passed in 1886, the PVSA restricts domestic waterborne passenger transport to vessels that are U.S.-flagged, U.S.-built, and mostly U.S. crewed and owned (essentially the Jones Act but for cruise vessels and ferries). But none of the large cruise ships that transport passengers to Alaska from the Lower 48 meet those conditions and must stop in a Canadian port -- making the trip international rather than purely domestic -- to avoid running afoul of the PVSA.
While a boon to Canada’s tourism industry, the PVSA comes at the expense of passengers who would rather spend their Alaska cruise actually visiting Alaska. The forced stops are also a missed opportunity for Alaska’s tourism sector as well as cruise ship operators who bear the expense of an otherwise unneeded port call. But earlier this year the law went from costly annoyance to grave threat when Canada closed its ports to cruise vessels through February 2022 -- a move that effectively slammed the door shut on visits to Alaska by large cruise ships suddenly unable to dock at a nearby foreign port.
To salvage the state’s cruise season the three members of Alaska’s congressional delegation introduced legislation -- quickly signed into law -- that effectively suspended the PVSA for Alaska voyages on large cruise ships until Canada’s ports are re opened. Having now tasted the freedom of unimpeded cruise ship access between Alaska and other U.S. ports, Sen. Murkowski and Rep. Young have decided that the situation should be made permanent.
Sen. Murkowski’s apparent plan is to exempt Alaska cruise ships carrying more than 1,000 passengers from the PVSA. While Murkowski says the exemption would expire once a U.S.-built cruise ship enters the market, in practice it would likely be permanent given that no U.S. shipyard has delivered such a vessel since 1958.
Rep. Young’s bill, meanwhile, takes a different approach. Called the Tribal Tourism Sovereignty Act, it would grant foreign status to any port owned by a federally recognized Indian tribe, either in Alaska or elsewhere in the country. Essentially, the bill would deem domestic voyages by foreign vessels to be PVSA compliant so long as they include a stop at one of these ports.
Each bill has its pluses and minuses. One virtue of Murkowski’s bill is its simplicity: vessels carrying more than 1,000 passengers that visit Alaska are exempt from the PVSA’s restrictions. But the bill is scope is narrow, both in the types of vessels that it applies to as well as geographically. That’s unfortunate, as the PVSA is not only a problem for Alaska but the rest of the country as well. It means that cruises from California to Hawaii typically include a stop in Mexico. The law also makes it impossible for large cruise ships to offer purely U.S. itineraries along the East, West, and Gulf Coasts. It has even proved a headache for vessels on the Great Lakes.
Young’s bill, meanwhile, is more expansive but brings added complications that make its benefits less clear. How many Indian tribes control ports capable of accommodating cruise ships? And how many of those are located in areas of high demand for tourism?
Either measure, however, is preferable to the absurd status quo (Canadians feel differently). Beyond ludicrous outcomes such as the diversion of ships and passengers to Canada, the PVSA’s application to large cruise ships is protectionism for an industry that is nearly non existent. The entire fleet of U.S.-flagged such vessels consists of a single ship, the Hawaii based Pride of America. And that ship was delivered by a German shipyard and is only deemed PVSA compliant due to a special waiver.
It’s regrettable that Congress was not spurred to action until the combination of a global pandemic and this ancient bit of protectionism nearly proved ruinous for Alaska’s tourism industry. But if COVID-19 and its ensuing fallout help ease the PVSA’s burden on Alaska, then it will have succeeded where basic logic has thus far fallen short.
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