Norwegian Cruise Line is optimistic about sailing in 2021 after suspending its operations throughout 2020 because of the coronavirus pandemic.
The encouraging news came as the cruise line released its third-quarter earnings report on Monday while also providing a business update on its operations.
While Norwegian said its booking volumes remain below historical levels, it is still seeing demand for future cruises, particularly in the second half of 2021 and beyond.
The bookings are below historical ranges for the first half of 2021, as expected because of the pandemic, but the second half of the year is in line with normal levels. The company saw record bookings in September and October, demonstrating pent up demand for future cruises.
The cruise line also said that its full-year pricing is on track with pre-pandemic levels despite the impact of the virus on its operations, which included future cruise credits that were doled out to travelers for canceled bookings at the height of the health crisis.
As of Sept. 30, the cruise line had $1.2 billion in advance ticket sales, which included $0.85 billion in future cruise credits.
The news of demand for vacations follows the U.S. Centers for Disease Control and Prevention’s (CDC) Framework for Conditional Sailing Order that now permits cruise ship passenger operations to sail in U.S. waters under certain conditions.
These conditions include the implementation of COVID-19 testing for crewmembers and building of laboratory testing for guests and crew in the future, simulated voyages to test a cruise ship operator’s ability to mitigate COVID-19 risk, certification for ship operators the meet specific requirements, and phased returned to passenger sailing to reduce COVID-19 transmission risk to the crew, guests, and communities visited.
Previously, the CDC issued a No-Sail Order the prevented cruise operations from sailing in U.S. waters through Oct. 31.
President and CEO Frank Del Rio called the new Framework for Conditional Sailing Order a “step in the right direction on the path to the safer and healthier resumption of cruising in the U.S.”
Del Rio continued: “While we have a long road of recovery ahead of us, we are encouraged by the continued demand for future cruise vacations, especially from our loyal past guests, across all three of our brands.”
While things are looking up for Norwegian, it reported a decrease in revenue to $6.5 million compared to $1.9 billion in 2019 based on the suspension of its operations throughout the quarter. Adjusted net losses for the quarter were $638.7 million.
To mitigate the impact of the pandemic, Norwegian has taken a number of steps to stop the cash bleed, including reducing its operating and capital expenditure. The company also extended workforce furloughs and 20% salary reductions for shoreside crewmembers.
The company had a total debt of $10.9 billion as of Sept. 30 and cash and cash equivalents of $2.4 billion. Cash burn for the third quarter was about $150 million per month with an expected cash burn for Q4 of about $175 million per month, which Norwegian