Carnival Corporation agrees $3bn in borrowing as cruises halted

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Carnival Corporation is to borrow $3 billion under a credit agreement for six months as the coronavirus crisis triggered a shutdown of global cruise operations.

Tapping the credit facility will increase the group’s cash position and “preserve financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak”.

The proceeds from the borrowings will be available to be used for working capital, general corporate or other purposes, the corporation said.

The move to bolster the world’s largest cruise company’s financial position came as its UK brands, P&O Cruises and Cunard, suspended operations until April 11 after other brands such as Princess Cruises paused operations.

Carnival Corporation said: “Due to the spread and recent developments, including growing port restrictions around the world, related to the Covid-19 outbreak, the corporation previously announced a voluntary and temporary pause of its fleet cruise operations by its continental Europe and North American brands.

“Subsequently, the corporation implemented a temporary pause of its global fleet cruise operations across all brands. Each brand has separately announced the duration of its pause.

“Significant events affecting travel, including Covid-19, typically have an impact on booking patterns, with the full extent of the impact generally determined by the length of time the event influences travel decisions.

“The corporation believes the ongoing effects of Covid-19 on its operations and global bookings will have a material negative impact on its financial results and liquidity.

“The corporation is taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing.

“Given the uncertainly of the situation, the corporation is currently unable to provide an earnings forecast, however, we expect results of operations for the fiscal year ending November 30, 2020, to result in a net loss.”

The group’s cruise lines operate 105 ships with 16 new vessels due to be delivered by 2025.

CEO Conversations: Carnival Corp.’s Donald on stability and innovation

Carnival Corp. CEO Arnold Donald, far right, was joined onstage during the CEO Conversation panel by John Chernesky-the-puppet of Princess Cruises. The session was moderated by editor in chief Arnie Weissmann, seated, left.

Carnival Corp. CEO Arnold Donald, far right, was joined onstage during the CEO Conversation panel by John Chernesky-the-puppet of Princess Cruises. The session was moderated by editor in chief Arnie Weissmann, seated, left. Photo Credit: Jamie Biesiada

FORT LAUDERDALE — Carnival Corp. CEO Arnold Donald told an audience at CruiseWorld that being the largest cruise company in the world comes with two key advantages — stability and innovation — that help Carnival’s brands deliver industry-leading results.

The company has more than 100 ships, and it operates in every segment and several global source markets. “One of every two people who cruise go with one of our nine brands,” Donald said, which include Princess Cruises, Holland America Line and Cunard Line, in addition to the namesake Carnival Cruise Line.

“Because we have such a large portfolio, it’s difficult for anyone thing happening somewhere in the world to take the company down,” Donald said.

Size matters in innovation too. “We have the scale and the capability to take on projects that others can’t,” he said.

A prime example of that is the costly OceanMedallion personalization technology that Carnival developed and rolled out initially on Princess Cruises.

“We invented it,” Donald said. “It’s not off-the-shelf apps.”

Donald ran down a list of developments at various Carnival brands, such as the roller coaster on next year’s Carnival Cruise Line newbuild, the Mardi Gras.

But when he forgot to mention Princess Cruises, a surprise guest made an appearance.

From behind the couch where Arnold was seated, up popped a Muppets-style character designed to look like Princess’ senior vice president of sales and trade marketing, John Chernesky. The puppet ribbed Donald and amused the crowd until the real John Chernesky bounded on stage to complain that the puppet has been impersonating him all over town.

The larger message to the puppet tomfoolery was to billboard the Jim Henson Creature Shop show, called “Inspired Silliness,” that will debut next month on the newest Princess ship, the Sky Princess.

When Donald finally regained the spotlight, he took some time to outline Carnival’s sustainability initiatives and defend the industry’s record.

He said that very little of the estimated 8 million tons of plastics in the ocean comes from ships, much less from cruise ships. “It comes from land; it comes through the rivers and gets into the ocean,” he said, adding, “Having said that, we don’t want anything going in the ocean. He said that Carnival has accelerated existing recycling efforts and processes to eliminate plastics from its waste stream.

Likewise, when it comes to greenhouse gas emissions, a Carnival brand was the first to use liquified natural gas (LNG) to provide power in port, and Carnival Corp. will be the first to bring an LNG-powered ship to North America, with the Mardi Gras.

“Ultimately we want to get to zero-emission,” Donald said. But he said cruise emissions are a tiny fraction of the global equation. “The reality is if the cruise industry didn’t exist, you wouldn’t be able to measure the difference in emissions,” he said.

Cunard unveils new ship design team

Cunard unveils new ship design team

A ‘world-class’ team of designers has been recruited by Cunard to create the interiors for its new ship.

Design details of the as yet unnamed vessel, due to join the fleet in 2022, are still under wraps.

However, award-winning designers Simon Rawlings, of David Collins Studio; Terry McGillicuddy, Richmond International and Sybille de Margerie of Sybille de Margerie Paris are already working with the creative director, Adam D Tihany, on Cunard’s fourth ship.

The ship is Simon Rawlings’ first project at sea, with responsibility for the atrium, grand lobby, the Queens Grill suites and the main dining room. Past projects have included Kerridge’s Bar and Grill, Corinthia London and The Apartment at The Connaught.

French interior studio, Sybille de Margerie Paris, whose projects have included The Mandarin Oriental Paris and Cheval Blanc in Courchevel, will handle retail spaces, the spa and the flagship Queens Room in its first work on a ship interior.

Richmond International, which counts The Langham London and the award-winning Four Seasons Budapest among its clients, will be responsible for the theatre, new entertainment spaces and the outside deck area.

Cunard president Simon Palethorpe said: “The calibre of talent we have brought together for this project will bring to life our vision of creating a truly world-class ship.

“Working alongside the legendary Adam D Tihany, the team is working hard to ensure that every aspect of our new ship is exciting and forward-looking, yet unmistakably Cunard.”

Tihany added: “We have assembled a dynamic, passionate team of talented creatives whose unique design sensibilities and innate understanding of the Cunard brand will move the dial forward while recapturing the beloved spirit of Cunard travel in this next generation cruise liner.”

The new ship will be the 249th vessel to sail under the Cunard flag and will bring the luxury line’s fleet up to four vessels for the first time since the 1980s, joining flagship Queen Mary 2, Queen Victoria and Queen Elizabeth.