Norwegian Plans Phased Return to Service

Norwegian Dawn

“I will do everything humanly possible to be able to look my own family in the eyes and say they will be safe on our cruise ships,” said Frank Del Rio, chairman and CEO of Norwegian Cruise Line Holdings (NCLH), on the company’s first quarter earnings call.

Del Rio said NCLH is working with experts to develop health protocols that will be robust to gain CDC approval and generate confidence among the public. The same process must be replicated around the world.

When the no-sail order is lifted by the CDC, Del Rio said he expects that the company’s brands will return to service in a phased order of roughly five vessels a month, assuming ports are open and they can sail their designated itineraries.

With 28 vessels, it will take roughly six months to bring the whole fleet back into service. It is also unknown at this point whether they will be allowed to sail at 100 percent capacity.

Consumer demand is still there, according to Del Rio, despite all the negative press. He noted that bookings are still coming in, despite the suspension of marketing activities, and expects that cash coming in will overtake the net cash outflow (refunds) in the next 60 days.

“There is pent up demand; people want to cruise again,” he added, noting that world cruise segments for the Regent and Oceania brands were sold out, with customers flying to embarkation points in Japan and Dubai.

However, with a booking curve from six to eight months out, it will take time before the pipeline is full or nearly full, he said.

Mark Kempa, CFO and executive vice president, commented that he sees 2021 as a transition year and that NCLH may be able to rebuild in earnest in 2022, bringing the company back on the track it was prior to COVID-19.

Newbuild deliveries may be delayed 12 to 18 months, added Del Rio.


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