Norwegian Cruise Line: 90-Day Window Still Needed Once CDC Gives Green Light to Sail

Although investors may be waiting just as eagerly as the cruise ship operators for the U.S. Centers for Disease Control and Prevention (CDC) to give the green light to resume sailing, Norwegian Cruise Line Holdings (NYSE:NCLH) says voyages won’t launch right away. It still needs another 90 days to get the cruise ships shipshape for sailing.

That means if the CDC gave the OK today, the earliest Norwegian could begin sailing would be the beginning of June. Unfortunately, no one is expecting the CDC to lift its embargo any time soon.

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Still a rudderless situation

Norwegian Cruise Line CEO Frank Del Rio said there were high hopes for resuming voyages in the first quarter after the CDC issued its conditional sail order last October, but as everyone quickly discovered, the agency’s conditional order really wasn’t much different from its no-sail order.

Norwegian ended up repatriating 4,000 crew members back to their home countries who had been on standby since it was clear no one was going anywhere.

As the CDC continues to vacillate over when it will actually allow cruises to resume, Norwegian is burning through some $175 million a month in cash. And those costs will rise when it begins preparing to reenter the ship into service.

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During the 90-day window, Norwegian will initiate a phased restaffing of its crew and start marketing cruises again. It also needs to recall the ships depending upon where they’re stationed in the world.

Del Rio noted to have 100% of its fleet operational by early 2022, it would require approximately six to seven months of pressing one ship a week into service, but that’s only if it got the go-ahead today. It’s expected the ships will only be allowed to operate at around 50% capacity at most once the green light is given.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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