The CDC's extension to its no sail order isn't entirely surprising, but it will make certain more financial pain for major cruise lines that are furiously raising cash to survive.
The Centers for Disease Control and Prevention extended its no sail order for the cruise industry on Thursday, banning cruises from operating out of U.S. ports through Sept 30. It first issued the order on March 14 that was set to expire next week.
In its extension, the CDC reiterated its belief that “cruise ship travel exacerbates the global spread of Covid-19, that the scope of this pandemic is inherently and necessarily a problem that is international and interstate in nature, and such transmission has not been controlled sufficiently by the cruise ship industry or individual State or local health authorities.”
The major cruise industry operators in the U.S. had already voluntarily extended suspended operations until mid-September. Industry insiders told Skift this week they saw this move as a preemption of the inevitable: That no cruise line was ready to sail, and pausing operations before an extension of the No Sail order provided better optics.
The CDC’s order said that while it welcomed much of the industry’s voluntary suspension, it re-upped the order because not all cruise lines had made the same commitment.
In a striking example of how much federal resources have been spent trying to solve the problem of Covid-19 on cruise ships, the agency noted that as of July 10, it had expended “an estimated 38,000 person-hours on the cruise ship COVID-19 response since March 14, 2020—in addition to the thousands of hours invested by other HHS components, other U.S. government agencies, and state and local authorities. CDC continues to have regular conversations by phone and email with cruise lines, often daily.”
In addition, CDC data showed that as of July 10, there were 2,973 Covid-19 or Covid-like illness cases on cruise ships, with 34 deaths. This translates to 99 outbreaks on 123 different vessels, “meaning that 80 percent of ships within U.S. jurisdiction were affected by Covid-19 during this time frame. In addition, nine ships still have ongoing or resolving Covid-19 outbreaks on board.”
In its last extension of the No Sail order, dated April 15, the agency asked all major cruise lines to issue a response plan to the order, stipulating precisely what that needed to entail. As of July 10, the agency said only one cruise line — Bahamas Paradise Cruise Line — has come up with a plan that adequately meets all the requirements. It added that the “difficulty of cruise ship operators in submitting appropriate [No Sail Order] response plans was compounded by several instances of potential non-compliance with the requirements of the April 15, 2020 Extension.” These include alleged improper disembarkations of crew and crew not adhering to social distancing on board.
In the last two weeks, the three major cruise companies — Carnival, Royal Caribbean, and Norwegian Cruise Line — have trumpeted public facing initiatives to come up with best practice to safely resume passenger sailings. The CDC characterized these efforts as “tentative steps” but called for “further industry-led engagement as to which strategies, best practices, and procedures, either singularly or in combination, would be most effective in protecting the health of passengers, crew, and global communities.”
In an earnings call with investors last week, Carnival Corp. CEO Arnold Donald admitted that thus far, conversations with the agency had concerned the “current pause and the handling of the ships during the pause, which has exclusively crew onboard the ships. We have not actually gotten to the point of serious resumption of cruise discussions with the CDC. But of course, that’s coming.”
A statement from the Cruise Lines International Association, the cruise industry’s lobby group, said its members “remain aligned with the CDC in our commitment to public health and safety. We are also pleased that the CDC has announced its intention to issue a request for information about the industry’s resumption of passenger operations. As we continue to work towards the development of enhanced protocols to support the safe resumption of cruise operations around the world, we look forward to timely and productive dialogue with the CDC.”
While some passengers are optimistically booking cruises for 2021, the major lines have been forced to raise large sums cash to stay afloat. Carnival Corp this week announced the pricing of $1.2 billion in senior secured notes, in addition to financial aid from the UK government. Norwegian Cruise Line said Thursday it plans to raise $925 million in bond offerings in the face of “insignificant” second quarter revenue.
UPDATED: This story was updated after publication to include CLIA’s statement.
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Photo credit: After two coronavirus cases abroad its ships, Princess Cruise Lines suspended operations. Jeff Chiu / Associated Press