Royal Caribbean posts $1.6bn loss for second quarter
Royal Caribbean has posted a second-quarter net loss of $1.6 billion, as the global pandemic continues to take its toll on the cruise sector.
The figure compares to a profit of $472 million at the cruise operator in the same quarter last year.
In May 2020, it posted a first-quarter loss of $1.4 billion.
The parent company of Royal Caribbean International, Celebrity Cruises, Azamara and Silversea paused all operations amid the global Covid-19 pandemic on March 13th.
Richard Fain, Royal Caribbean chief executive, said: “Our teams are working tirelessly to return to service soonest and doing so by developing new health and safety protocols to protect the well-being of our guests, crew and destinations we visit.
“In the meantime, we are using this time to refine our operations to be as efficient as we can while providing the great experiences that so many people are eagerly awaiting.”
Royal Caribbean Group estimates its cash burn to be between $250 million to $290 million per month during the suspension of operations.
Earlier this month, it announced it will be extending the suspension of sailings to include those departing on or before October 31st, excluding sailings from China and Australia.
Following the release of Royal Caribbean results, Ben Cordwell, tourism analyst at GlobalData, said smaller lines could faces serious problems moving forward.
“These kind of losses are clearly not sustainable and highlight the enormous financial pressure that COVID-19 has put all cruise companies under,” he explained.
“Fortunately for Royal Caribbean, the company has large cash reserves to fall back on, with $4.1 billion still available in the form of cash and cash equivalents.
“This cash will likely see Royal Caribbean through the pandemic; however, the future may look bleaker for smaller cruise operators with lower cash reserves.
“Despite the ongoing difficulties, Royal Caribbean has indicated bookings have been positive in 2021, with approximately 60 per cent of bookings being new reservations.
“However, a recent outbreak on board a cruise ship in the Arctic could have enormous repercussions for the cruise industry further down the line.
“If these kind of incidents become high-profile, it could be devastating for the industry.”