Is Norwegian Cruise Line In Trouble?

Norwegian Cruise Line has canceled over seven months of sailings on its Norwegian Sun ship, the Norwegian Gem, and its Caribbean trip mid-journey due to Covid-19. The cruise company HX said that there is no reduction in guest spending, while the MS Maud lost power after a rogue wave crashed into it. Norwegian Cruise Line Holdings Ltd. raised its outlook for a third time this year, calming fears that compensation offered by the cruise line is not enough. The company offered a full refund for the trip to passengers and offered credit for a future voyage.

Norwegian Cruise Line executives are optimistic about demand returning to the Middle East region in 2024 after cutting some trips in response to the Israel-Hamas Cruises screeched to a halt in 2020 after Covid-19 cases spread. However, demand has returned, and operational efficiency efforts give Norwegian confidence it can improve its cash flows. The only collateral Norwegian Cruise Line has is proof of vaccination.

The company’s occupancy was 102.9% for the year, in line with guidance of 102.6%, and total revenue per passenger cruise day increased approximately 17%. Based on the latest financial disclosure, Norwegian Cruise Line has a Probability Of Bankruptcy of 35.0%, 15.44% lower than that of the hotels.

In addition, Norwegian Cruise Line has canceled all but three of its planned 2023 Caribbean sailings of Norwegian Sky. In statement, the company reported its first profitable year since 2019 as fourth-quarter losses narrowed dramatically.