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Cruise liners leave port – but will investors get back onboard?

‘The first quarter of 2020 saw 54 infected ships with 2,592 ill crew members and passengers around the world’

The cruise ship industry has begun to set sail again after a year in which most operations ground to a halt, according to reporting from The Guardian.

As of the end of last week, the cruise ship Britannia began carrying passengers again over the weekend. Other tour operators such as Saga, MSC Cruises, and Royal Caribbean are also set to launch trips once again. However, it is understood that these will be short cruises circumnavigating the British Isles.

Saga’s offering, taking place on the Spirit of Discovery, will travel from Tilbury docks in London for six days, eventually returning to the same place. Others such as the Switzerland-based MSC Cruises will begin at Southampton, calling in at Liverpool and Belfast.

In the US, reported the Associated Press, a ship known as Celebrity Edge became the first cruise liner to leave a US port since the beginning of the pandemic when it departed Fort Lauderdale, Florida, a few days ago. That vessel took to the water with about 40% capacity, and with all 1,100 passengers vaccinated.

There will be reportedly strict anti-covid measures in place on the UK with P&O only allowing those doubly-vaccinated to take part.

And, according to The Guardian, “Saga meanwhile has doubled its medical teams and created new isolation wings. The wearing of masks will be obligatory indoors except for the cabins, and health declarations by the double-vaccinated will be topped up with antigen tests for every passenger before boarding.”

Cruise companies were hard hit

Writing in Science Direct, Ana Lucia Rodrigues DaSilva, said: “As a result of the covid-19 pandemic and the many infected ships in the first quarter of 2020, the entire cruise industry was stopped and a prohibition on resuming this industry was imposed worldwide.”

She added: “This pandemic has been the largest crisis faced by the cruise industry to date, there are no precedents, neither in size nor in consequences. The first quarter of 2020 saw 54 infected ships with 2,592 ill crew members and passengers around the world.”

Individual stories from aboard the cruise ships have been uniformly distressing, particular in those like the outbreak on the Diamond Princess and the high numbers of suicides among cruise staff.

Faced with a complete shutdown, some cruise liners turned to issuing bonds to stay afloat. Among these were Carnival, who issued multiple bonds last year, some of which were secured against the value of their own ships. It was reported that the industry shutdown has been costing the company $600m a month.

As the Financial Times recently reported on the company, “One year ago, [Carnival] pawned its ships to borrow $4bn from investors demanding an 11.5% interest rate. Now the yield on those bonds has dropped to below 4% as the bonds jump in value.”

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