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RCI bankruptcy possibility - deposits and FCCs


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10 minutes ago, rimmit said:

Carnival will definitely survive.  RCL and NCL are the most at risk for Chapter 11.  CCL has not increased their liquidity since this started that I am aware of. RCL and NCL both have.

 

40% of CCL's total debt obligation is due in 2020 and 2021; about $8 billion dollars.  

 

They have $500 million cash on hand. 

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1 hour ago, torpeedo said:

Last year we were sitting at a luncheon with one of the Captains.  For some reason the conversation went to discussing the Costa Concordia disaster.  The Captain told us that if this had been a Royal ship, it would have been the end of Royal.  They could never withstand some thing like this.  We gulped and were shocked but he was dead serious.  I won't name the Captain, mainly because I can't remember!!LOL!  But since then Royal has taken on a lot of debt with Coco Cay and the new builds.  
I hope Royal is able to withstand this disaster with the help of the government.  I surely don't want them to go under. I know we do our share as frequent cruisers with Royal!

 

With the help of what government?? Where does Royal pay taxes again?? It's definitely not the US or Canada.  

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1 hour ago, alfaeric said:

Is it possible?  Sure.

 

But it would also be suicide.  The people who are most likely to come back quickly to the cruise line are the loyalists, and the quickest way to alienate them is make them start over. 

 

Do you know who is not likely to book a cruise AT ALL, EVER? A TON of people who were always on the fence about cruising; especially the under 30 set that still viewed it as for the newly wed and nearly dead crowd.  The name brand Princess is Toxic Waste.  Any "Name Brand" will be in the American public's mind.  

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1 hour ago, LMaxwell said:

 

Their argument is they won't be able to provide you the same services, nor sell you a week long cruise for $499. Not saying you are wrong, you make a good point.  But all those FCC holders would be in for a rude shock when the cost of a replacement cruise is 3x higher 

It may very well be that way anyway. For the next 12 months or so cruise prices will likely be higher....especially because of the high numbers of FCCs floating around. Pay an extra 500 for your next cruise or lose your 2000 FCC. hmmmm

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31 minutes ago, gkbiiii said:

 

Well see that's their problem: US bailout, US Labor laws.

And yours, if you want to cruise.   Not only that, but shipping laws apply across the board to all, not just cruise ships.  Be careful what you ask for.

Edited by BND
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While cruise industry is in crisis so are many other travel and entertainment industries including hotels, airlines, car rentals, resorts and professional sports. In such a time government will legislate some form of relief as well as instruct lenders to be patient in order to avoid economic collapse.  

 

For RCCI believe possibility of bankruptcy is extremely remote even if suspension of sailing extends past summer.  Some of their largest expenses such as fuel and ta commissions will naturally shrink, some crew will be furloughed and capital expenses deferred.  Over $1.2B of annual expense is depreciation, a non-cash item.  Like all companies RCCI has lines of credit they can draw on for liquidity (including the $550MM added last week).  Existing long term debt can be refinanced, and additional debt and stock issued (terrible time for it).    

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Royal is not going bankrupt because of a few months of bad business and I haven't heard a single analyst worth his salt that implied that. In a year all will be back to normal and the stock doubles or more easy

Some think going bankrupt would be the end of the company. WRONG!

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21 minutes ago, Baron Barracuda said:

  Existing long term debt can be refinanced, and additional debt and stock issued (terrible time for it).    

 

Usually only if you have positive cash flow.  

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2 minutes ago, drsel said:

They will have to recover the losses by both increasing cabin prices as well as reducing employees salaries

Not really. If you were in business and did that, how do you think that would go?

They will recover by simply filling their ships and making a profit from doing so like they always have

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1 minute ago, cruisinfanatic said:

Not really. If you were in business and did that, how do you think that would go?

They will recover by simply filling their ships and making a profit from doing so like they always have

The problem is how will they fill their cabins when many are afraid of cruising

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4 hours ago, Mapleleafforever said:

Imagine they do go bankrupt and open up shop under a different name and all our statuses are now back to day 1??


That would free up some space in the lounges. 😱

 

 

3 hours ago, RETNAVY1996 said:

Let’s make a deal, you change your Flag to a US company, follow our laws and pay our taxes and we will bail you out.  That would be interesting.

 

they are a big company, could most likely write it all off anyways.  

 

I doubt it would ever get to that.

 

2 hours ago, alfaeric said:
1 hour ago, LMaxwell said:

Their argument is they won't be able to provide you the same services, nor sell you a week long cruise for $499. Not saying you are wrong, you make a good point.  But all those FCC holders would be in for a rude shock when the cost of a replacement cruise is 3x higher 


I think that would also bring about mandatory tips being paid in the cruise fare. Which I am good with. 

 

 

Edited by A&L_Ont
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I haven’t read the whole thread but wanted you to know I’m still waiting for my refund from cancellation of Spectrum Shanghai cruise. Royal canceled on Feb19th and said I’d probably have my refund by February 27th or sooner. After 3 weeks I wrote to Michael Bayley’s office and received partial refund. I’m only out $740 but still that’s a lot of money that some people can’t afford to lose. Hopefully other passengers have better luck than I did. 

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8 minutes ago, A&L_Ont said:


That would free up some space in the lounges. 😱

 

 

 

I doubt it would ever get to that.

 


I think that would also bring about mandatory tips being paid in the cruise fare. Which I am good with. 

 

 

No tipping mentioned in here 🙂 

 

But I will say this; if I ever set foot back on a cruise ship I am wearing absolutely whatever I want to the dining room and they'll thank me doubly 🙂 🙂 🙂

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Did not the today's President say "let Detroit go bankrupt" back in 2008 when he was not the President but commenting on everything that President was doing?  (I do know that Mr. Romney said it) Bankruptcy means re-organizing the business and usually it is the creditors and lower paid workers that take the hit.  I think the President (this one) knows how all of that stuff works.🤔🤔

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1 minute ago, hotsauce126 said:

 

Impacted but not hugely. Commercial shipping is the main business of every port 

 

Floridas main tax revenue is sales taxes.  On tourism.  You live here and enjoy relatively low property taxes compared to other states, and we have no state income tax.  What do you think will happen when tourists stop coming here for hotels? Ripple effect to rental cars.  Restaurants.  Smaller parks and attractions, etc....then those service industry workers are out of business since we have no core industrial export in Florida.  

 

So I beg to differ.  We have a huge shortage of tax revenue looming going hand in hand with the possibility of a lot of lower paid workers losing jobs; these are not people typically with big emergency funds or that can switch jobs very easily to something requiring skilled or semi-skilled labor. 

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This topic is what made our final decision to cancel our june cruise last week rather than make our final payment on its due date of March 16.  I would rather have $500 per cabin wrapped up in FCC rather the full cabin price of $3500 and we had 2 cabins so over $7k in FCC if we would have made the final payments.  While we think its a low chance that they will go bankrupt, its not out of the realm of possibly.  Look at American Airlines...

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1 hour ago, LMaxwell said:

 

40% of CCL's total debt obligation is due in 2020 and 2021; about $8 billion dollars.  

 

They have $500 million cash on hand. 

If CCL goes down, so are the creditors. Go ahead and pull the plug.

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Just now, sfaaa said:

If CCL goes down, so are the creditors. Go ahead and pull the plug.

 

Mickey's not gonna bust open his bankroll.  There's no telling how long this drags on.  Talks of economic bailout for companies that suspended operations 2 days ago is premature.  What we do know is we are in for a health crisis and world economic crisis that I don't think anyone alive has experienced or can predict the outcome of. 

 

There is going to be wholesale socio-economic change on a scale I don't think any of us can understand or process yet.  

 

 

 

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They don’t pay US taxes so I’m not for a bailout.  

One of the little know facts about the cruise industry is that it pays virtually no U.S. taxes.

The cruise lines take advantage of an obscure provision in the U.S. tax code which permits shipping companies to evade taxes by incorporating overseas and flying the flags of foreign countries.  That’s why Carnival is incorporated in Panama, Royal Caribbean is incorporated in Liberia, and Princess Cruises is incorporated in Bermuda.

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Current Coronavirus crisis will be over when a vaccine is found, likely 12 months away. It will then be business as usual for cruise lines. Most current cruisers are itching to get back on cruise ship asap when cruising is deemed safe again. I know I will.

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