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Norwegian suffers huge loss as 60 per cent of passengers demand refunds
Norwegian Cruise Line has reported a loss of US$715m in the second quarter and warned its financial position will continue to worsen if cruising remains off limits.
The huge loss compares to a profit of $240m in the same period last year. Revenue collapsed from $1.7b to $16.9m
Norwegian said 60% of passengers booked on cancelled voyages requested refunds.
"The Covid-19 pandemic has had a significant impact on the Company’s financial position and results of operation," the company said. "If the temporary suspension of sailings is further extended, the Company’s liquidity and financial position would likely continue to be impacted."
Cruises are currently suspended until October 31.
Norwegian said cumulative bookings for 2021 are ‘within historical ranges’ but include future cruise credits.
As of 30 June it had $1.2 billion of advanced ticket sales, $0.8 billion of which is future credit.
Despite the dire results, Executive Vice President and Chief Financial Officer Mark A. Kempa insisted the company was financially secure.
"We continue to adapt to this unprecedented and fluid environment and take swift and proactive measures to reduce costs, conserve cash and enhance our liquidity profile," he said. "Our recent capital raises have enabled us to extend our debt maturity profile and secure additional liquidity providing us with a strong foundation to withstand the impact of Covid-19."
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