Carnival Corp chief executive Arnold Donald reveals the company’s efforts to “weather the storm” caused by Covid-19
Carnival Corp is taking “decisive and concrete” actions to ensure the strength of the company in the face of the coronavirus pandemic, its CEO Arnold Donald said in a global media call.
He explained how Carnival Corp raised US$6.4Bn in funding in April that included new debt and equity offerings, on top of the previously announced US$3Bn the cruise conglomerate took from existing facility agreements.
He comments “We are also reducing capital expenditure and operating expenses across our company and working hard to seek additional liquidity options.
“Together, we believe these important moves will provide sufficient liquidity to fund our operations through the end of the year and beyond potentially, without any significant revenue coming in. We hope that will prove to be unnecessary, but we need to be prepared for the worst.”
He sums up “While we do not believe we will need a runway that long, we are prepared for the worst-case scenario. That has enabled our teams to focus on the immediate issues at hand and on our future, making certain we are in a position to succeed once cruising resumes.”
As the crisis evolved, Mr Donald told press the company has remained focused throughout on its highest responsibilities and top priorities, including compliance, protecting the environment and the safety, health and well-being of its guests, the communities it visits and its team, the shipboard and shoreside employees.
He singles out that the company has several major efforts to prepare for the eventual restart of operations, “that includes taking care of our dedicated crew members during this difficult time, maintaining our ships and continuing our focus on compliance. We are also optimising operations and our financial resources globally, and doing detailed planning around the return of cruise operations. That includes deployment, destinations, excursions, essentials, ship services, while also focusing on existing booked guests and future demand creation.”
One of the effects of the Covid-19 pandemic is that shipbuilding will be delayed. Carnival Corp is building a number of ships across its nine brands. In response to a question, Mr Donald says “I think the obvious thing is most of the newbuild timelines will be delayed. A number of the yards do not have workers, they are not operating right now for the same reasons. So that is going to produce delays.” He says the company is working with the shipyards to look at the schedule going further out to see the extent of the delays and decide whether any of the ships should be cancelled or pushed back further. They are “working in partnership with them to resolve that”.
When cruise operations start again, he says that due to the pandemic being global, the start-up is “not probably going to be uniform… it will probably be in certain locations, certain destinations, certain times”. Therefore, there is unlikely to be a full fleet right away.
Asked about the long-term impact to the business model, he says “I think long-term our business model is secure. I think in the near term, obviously, as we have been discussing. How long is near term and midterm? Once we start sailing, it is going to be different because I doubt all destinations will open simultaneously. There will be different protocols and regulations in one place versus another and we are going to stand in compliance with all of those.
“So, I am sure there will be changes to the business model in the near and short-term. But longer term, I think as the world overcomes the virus and it becomes either background noise or non-existent, we will return once more to the great experience we were enjoying before.”