Del Rio told analysts on Tuesday during the company’s third-quarter earnings call that the vaccine news resulted in higher-than-usual bookings on Monday. Norwegian stocks were trading above 5% on Tuesday after reporting mixed results and lingering uncertainty over whether shipping will resume.
“Reservations for the last 24 hours yesterday were pretty good, better than the previous four or five Mondays. And that, I think, is attributable to the vaccine news, ”he said. “We haven’t had any special promotions or excessive marketing. ”
Del Rio touted the Pfizer news as “a milestone” and also noted that the Food and Drug Administration cleared Eli Lilly’s antibody treatment on Monday evening. Both of these developments, executives said, along with progress in Covid-19 testing will help resume cruise travel.
While most industries have suffered from the pandemic, the cruise industry is among the hardest hit. The industry was brought to a halt in mid-March when the Centers for Disease Control and Prevention issued a shipping ban after coronavirus outbreaks occurred on several ships. The CDC previously said “cruise ship travel is exacerbating the global spread of Covid-19” to justify the order.
Last month, the CDC lifted the no-sail order and replaced it with a “conditional navigation order,” which sets out a phased approach to help cruise lines resume operations in US waters.
With the replacement of the no-veil drive and advancements in Covid-19 vaccines, tests and treatments, Del Rio said “the level of excitement hasn’t been this high for a long, long time.”
The company is in talks with the CDC on how to interpret the conditional navigation order, Del Rio said, and Norwegian hopes to launch “test cruises” with the agency in January. Such test cruises would review the health protocols that Norwegian and its industry peers have put in place to see if they are effectively limiting the spread of the virus and protecting passengers.
Norwegian teamed up with rival Royal Caribbean in July to hire a handful of top epidemiologists and former U.S. health officials to develop a public health proposal for the CDC that would allow them to resume shipping. Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy at the University of Minnesota, sits on the board, was appointed this week to President-elect Joe Biden’s Covid task force.
Norwegian CFO Mark Kempa said the company has set aside $ 300 million for investments in health and safety. Del Rio added that the $ 300 million will likely be spread over “the next few quarters.”
Del Rio said he hopes the company’s full fleet can resume operations in six to nine months, although he added that this is only a “best answer today” and that he there are many uncertainties.
Kempa said the company continues to improve its liquidity and conserve liquidity. The company currently has $ 2.3 billion in cash, including money set aside for health and safety investments. However, Kempa warned that monthly cash consumption is expected to increase as the company begins to mobilize its fleet and staff to prepare for a gradual return to service.
Kempa said the company has sufficient cash to continue operating, noting that it expects a “cash flywheel” when the cruise resumes. In May, the company issued a going concern warning to investors, saying there was “substantial doubt” about its ability to continue. But the company quickly raised over $ 2 billion in new debt, consolidating its finances for “well over” a year.
“Looking ahead, we don’t expect a straight-line recovery,” he said. “We will therefore take a thoughtful and disciplined approach to reintroducing costs as we resume our trips to save money, while balancing the need to generate new cash bookings.” “