Norwegian Cruise Line Holdings
has extended its suspension of cruise voyages by another month, through Dec. 31, signaling the challenges of quickly resuming operations for the entire industry.
Monday’s announcement by Norwegian comes after the Centers for Disease Control and Prevention said Friday that it was lifting its no-sail order for U.S. ports as of Oct. 31. The agency said it was taking “a phased approach to resuming cruise ship passenger operations in U.S. waters.”
Norwegian shares (ticker: NCLH) were down 7.4% in early trading, at $15 and change, as the broader market was up sharply.
Even though the CDC gave the cruise industry the green light, it attached some stringent requirements. There will be four phases in the relaunch, the first involving “the establishment of testing of crew onboard cruise ships in U.S. waters,” according to the CDC.
The second phase will have simulated voyages, which will include volunteer passengers, “to test a cruise ship operators’ ability to mitigate COVID-19 on cruise ships.” The next phase requires cruise operators to get certified by the CDC. The final phase would entail a return to passenger voyages.
“We have a lot of work to do between now and then,”
Royal Caribbean Group
(RCL) said in a statement Friday, referring to when its ships will return to service.
Royal Caribbean shares were down 3.3% in early trading, at $54 and change.
It will take some time for the cruise operators, including
(CCL), to work through these phases. As Norwegian’s extension of its timeline for cruise sailings shows, it will be difficult for these companies to resume operations by the end of the year—making a resumption of any significance early next year more likely.
A wild card, of course, is the recent surge of Covid cases in the U.S. and Europe.
One of Carnival’s brands, Germany-based AIDA Cruises, said last week that it was going to suspend cruises for a month as the German government on Oct. 28 imposed further restrictions to limit the spread of Covid.
Carnival’s stock was around $13 and change, down 5.5% in the first half-hour of trading.
Whenever cruising does resume in the U.S., the CDC is expected to require strict Covid testing of passengers and crews before the board ships and when they leave the vessels as well.
In a recent research note,
Brandt Montour calls those requirements “a heavy lift to be sure, but we believe this can be done using shore-side testing facilities on both ends of the trip.”
Write to Lawrence C. Strauss at [email protected]