The cruise industry has once again led the market to new lows with Carnival Cruises (NYSE: CCL) declining by an eye watering 33% by the market close on Wednesday. This comes as the company reports up to 6,000 passengers stranded at sea due to the coronavirus pandemic.
Cruise lines have endangered their passengers and crews by refusing to cancel itineraries and refund passengers at the earlier stages of the crisis. Now, they are trapped in a nightmare scenario that has repeated itself too many times.
Thankfully, major cruise companies will pay for their mistakes. These foreign-registered companies are not included in Trump’s $2 trillion stimulus package. And they will have to turn to the governments of Libera, Panama, and the Bahamas (where many ships are registered) to beg for handouts while they inevitably slide towards bankruptcy.
The cruise ship industry is playing a dangerous game with the lives of its passengers by continuing operations at a time like this. The coronavirus pandemic has infected over 900,000 people around the world and is killing thousands a day. But cruise lines continued to cram passengers on tightly packed ships under conditions one Japanese expert has called a “coronavirus mill”.
The high profile disasters on the Grand Princess and the Diamond Princess, which saw 542 of its 3,500 passengers fall ill to coronavirus, were a wakeup call for the industry. But it was too little too late.
While Jan Swartz of Princess Cruise (a subsidiary of Carnival Co.) did the ethical thing and suspended operations, she didn’t recall ships that were already on itineraries. Now, another Princess ship, the Coral Princess, is heading toward Florida with an unknown number of sick passengers. And the Holland America Zaandam, where four people have already died, is desperately pleading for entry into Florida.
Florida’s hard-nosed governor, Ron DeSantis, has agreed to accept Florida residents from the infected Zaandam ship. But other people on the ship could be left to fend for themselves. And this may lead to preventable deaths.
We are going to be willing to accept Floridians on board. My understanding is most of the passengers are foreign nationals
My concern is that we have worked so hard to make sure we have adequate hospital space in the event of a COVID-19 surge, we wouldn’t want those valuable beds to be taken because of the cruise ship.
These are scenarios that no industry wants to be associated with. People are stranded on a cruise ship with an unknown number of infected people and at least four bodies that may soon start the decomposition process. Those who are in critical condition may not get the healthcare they need until the ship finds a place to dock.
And innocent passengers are being left to fend for themselves and potentially die just because they are not Americans or residents of the state of Florida. This is how civilization breaks down. It’s a nightmare scenario that seems out of place for 2020, and it gets even more surreal.
To make matters worse, the U.S. Coast Guard has directed cruise ships with infected passengers to stay offshore indefinitely. They even instruct foreign-flagged vessels to attempt to evacuate passengers through their countries of registration (like the Bahamas for example) – a nation with extremely limited hospital capacity compared to the U.S.
While such orders serve tax-dodging cruise companies right, they seem a little cruel to the innocent passengers who may not get the healthcare they need to survive a COVID-19 infection.
To add insult to injury, cruise companies are not included in Trump’s massive $2 trillion stimulus package. This even as Carnival Cruises’ CEO, Arnold W. Donald asks the federal government for a $6 billion bailout to weather the existential crisis his company is now facing.
Shares in Carnival Cruise dropped a staggering 33% to close at 8.80 on Wednesday. Royal Caribbean felly by 20% and Norwegian Cruise fell by 13%. This may be the beginning of the end for the industry. Bankruptcy is definitely on the table.
The above should not be considered trading advice from CCN.com.
Last modified: April 2, 2020 7:51 AM UTC