Carnival Corporation provided a business update to investors, which outlines its plan to sell off 13 cruise ships quicker, while delaying new ship arrivals into the fleet.
Instead of selling off ships over the next few years, Carnival will accelerate the removal of ships in fiscal 2020.
Carnival has already sold Costa Victoria in June 2020, and has agreements for the disposal of five ships and preliminary agreements for an additional three ships, all of which are expected to leave the fleet in the next 90 days.
These agreements are in addition to the sale of four ships, which were announced prior to fiscal 2020.
In total, the 13 ships expected to leave the fleet represent a nearly nine percent reduction in current capacity.
In terms of new ships, Carnival currently expects only five of the nine ships originally scheduled for delivery in fiscal 2020 and fiscal 2021 will be delivered prior to the end of fiscal year 2021.
In addition, the company expects later deliveries of ships originally scheduled for fiscal 2022 and 2023.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, "We have been transitioning the fleet into a prolonged pause and right sizing our shoreside operations. We have already reduced operating costs by over $7 billion on an annualized basis and reduced capital expenditures also by more than $5 billion over the next 18 months. We have secured over $10 billion of additional liquidity to sustain another full year with additional flexibility remaining. We have aggressively shed assets while actively deferring new ship deliveries. We are working hard to resume operations while serving the best interests of public health with our way forward informed through consultation with medical experts and scientists from around the world."
Donald added, "We will emerge a leaner, more efficient company to optimize cash generation, pay down debt and position us to return to investment grade credit over time providing strong returns to our shareholders."