First Signs of fleet disposal?

[york survey]

There has been a lot of talk about over capacity in the industry and that RCCL as a group will be looking to sell off or even scrap some of the fleet as the expected return to "normal" is potentially slow.

 

I've never understood this argument for 3 reasons

 

1. Who will be in the market to buy cruise ships?

2. Royal/Celebrity still carry substantial debt against it's ships

3. Fleets are relatively new and cost effective to run.

 

However overnight the following news came out https://www.cruiseindustrynews.com/cruise-news/23074-pullmantur-ships-move-to-cold-lay-up.html Pullmantur is a RCCL joint venture running 3/4 old retired Royal ships. 

 

All their cruises are now cancelled until 15th November 2020 and once in cold layup the ships could take months to recommission. Furthermore all the crew contracts have been transferred to CELEBRITY!

 

The RCCL group is clearly looking at options for this line. These ships could be brought back if things improve quickly or they might just disappear and be replaced by Constellation and Infinity. Reducing capacity and cutting out the "revolution" costs

 

Views?

 

Stuart

 

[BigAl94]

Quite a likely scenario

[TeeRick]

Thanks for posting.  It seems that some of this probably was a pre-determined strategy that just got accelerated to save cash.

[york survey]

13 minutes ago, TeeRick said:

Thanks for posting.  It seems that some of this probably was a pre-determined strategy that just got accelerated to save cash.

 

Which together with delaying new builds reduces short term capacity - Always like your comments!

 

 

[jelayne]

A month or so ago Fain or one of the other exes said that they could put some ships in cold layup to reduce the amount of cash being spent. 

[Saab4444]

Grandeur of the Seas has been scheduled for transfer, she is first in line.

[C-Dragons]

7 hours ago, york survey said:

There has been a lot of talk about over capacity in the industry and that RCCL as a group will be looking to sell off or even scrap some of the fleet as the expected return to "normal" is potentially slow.

 

I've never understood this argument for 3 reasons

 

1. Who will be in the market to buy cruise ships?

2. Royal/Celebrity still carry substantial debt against it's ships

3. Fleets are relatively new and cost effective to run.

 

The RCCL group is clearly looking at options for this line. These ships could be brought back if things improve quickly or they might just disappear and be replaced by Constellation and Infinity. Reducing capacity and cutting out the "revolution" costs

 

Views?

 

Stuart

 

In response to point # 3- X's Millennium class are older ships and not as cost effective as the newer ships in the Fleet, especially the E class. Post pandemic it may be necessary to downsize, especially if X intends to go forward with the larger, more efficient E class ships as planned.

There are subsidiaries of RCCL that the M class ships could be transferred to, or just sold off to another cruise line. IMO, going forward, the odds are pretty high that this may happen.

 

Edited June 11, 2020 by C-Dragons

[DrKoob]

14 hours ago, york survey said:

There has been a lot of talk about over capacity in the industry and that RCCL as a group will be looking to sell off or even scrap some of the fleet as the expected return to "normal" is potentially slow.

 

I've never understood this argument for 3 reasons

 

1. Who will be in the market to buy cruise ships?

2. Royal/Celebrity still carry substantial debt against it's ships

3. Fleets are relatively new and cost effective to run.

 

However overnight the following news came out https://www.cruiseindustrynews.com/cruise-news/23074-pullmantur-ships-move-to-cold-lay-up.html Pullmantur is a RCCL joint venture running 3/4 old retired Royal ships. 

 

All their cruises are now cancelled until 15th November 2020 and once in cold layup the ships could take months to recommission. Furthermore all the crew contracts have been transferred to CELEBRITY!

 

The RCCL group is clearly looking at options for this line. These ships could be brought back if things improve quickly or they might just disappear and be replaced by Constellation and Infinity. Reducing capacity and cutting out the "revolution" costs

 

Views?

 

Stuart

 

 

Stuart,

Thanks for a great post. Totally agree with you that this scenario is possible. In fact it makes great sense. Hate to see it happen though as we have sailed Infinity seven times and love that ship. It was our first X ship. 

[Georgia_Peaches]

Yeh I’d hate to see them go as well. Constellation was our introduction to Celebrity. Change is painful sometimes but if it helps the greater good of the company, totally understand. Thanks for posting!

[Germancruiser]

Well as my favorite X vessels - the M- Class-  are ageing it is to be expected that they have to go sooner or later- now rather sooner, I fear!

Maybe I sail the Grandeur when she is transfered to Pullmann- just for a rememberence cruise- since that was my first big ship I sailed on back in 1996- when she had just entered service! In them days she was considered one of the biggest ships in the world- and they were called " Mega- Liners"! Oh yes- the times- they do change. LOL!

[dandee2]

Any accountant around?

 

If they dispose of some ship, is that a write-off?
I understand that these ship are all registered in financial loophole countries and each ship is basically its own entity (or company).

[groryjm]

15 hours ago, C-Dragons said:

In response to point # 3- X's Millennium class are older ships and not as cost effective as the newer ships in the Fleet, especially the E class. Post pandemic it may be necessary to downsize, especially if X intends to go forward with the larger, more efficient E class ships as planned.

There are subsidiaries of RCCL that the M class ships could be transferred to, or just sold off to another cruise line. IMO, going forward, the odds are pretty high that this may happen.

 

In terms of age Milenium is Celebrity's oldest ship commisioned in 2000. There are 7 ships in RCL's fleet that are older still including Empress of the Seas which was commisioned in 1990 so surely those would be dropped before the M class shipes?

[hcat]

Thanks for pisting..Looks like things are happening.

 

Losing Connie would mean no X ship for Tampa..unless another is moved there. 

I do not believe the larger ships  can clear this port?

 

Our only booked  X cruise right now is for Connie in 2021. If Connie is removed, we will be stuck with a $2000 fcc unless we cruise from another Port or they bring a diff M Class ship to Tampa.

 

Time for a back up plan!

[ipeeinthepool]

8 hours ago, Germancruiser said:

Well as my favorite X vessels - the M- Class-  are ageing it is to be expected that they have to go sooner or later- now rather sooner, I fear!

Maybe I sail the Grandeur when she is transfered to Pullmann- just for a rememberence cruise- since that was my first big ship I sailed on back in 1996- when she had just entered service! In them days she was considered one of the biggest ships in the world- and they were called " Mega- Liners"! Oh yes- the times- they do change. LOL!

 

We also share found memories of the Grandeur, we have one last cruise on her booked for November, but we're not sure that's going to happen. 🤔

[D C]

19 hours ago, C-Dragons said:

In response to point # 3- X's Millennium class are older ships and not as cost effective as the newer ships in the Fleet, especially the E class. Post pandemic it may be necessary to downsize, especially if X intends to go forward with the larger, more efficient E class ships as planned.

There are subsidiaries of RCCL that the M class ships could be transferred to, or just sold off to another cruise line. IMO, going forward, the odds are pretty high that this may happen.

 

Cost effective is for the beancounters to determine :)
The gross operating cost of an Edge class at full capacity might be lower than an M-class at full capacity, but do those figures hold true with vacant cabins? or does the size of the E make for a larger crew regardless of the number of guests?  I would think that the mortgage payment on the E-class would reduce its operating margins.

 

The big picture is going to involve a lot of factors, including port availability and regional issues.  We have Canada closed off months, Guernsey is "COVID-free" and essentially isolated for who knows how long, and we have no idea about the Caribbean.  That's not to mention the Med, Asia, and Australian markets. 

 

 

 

[upwarduk]

5 hours ago, groryjm said:

In terms of age Milenium is Celebrity's oldest ship commisioned in 2000. There are 7 ships in RCL's fleet that are older still including Empress of the Seas which was commisioned in 1990 so surely those would be dropped before the M class shipes?

But Millennium has gone through an extensive refurb already. Why get rid of a ship they have invested so much money into?

[C-Dragons]

6 hours ago, groryjm said:

In terms of age Milenium is Celebrity's oldest ship commisioned in 2000. There are 7 ships in RCL's fleet that are older still including Empress of the Seas which was commisioned in 1990 so surely those would be dropped before the M class shipes?

My comment was only regarding X ships, not Royal. We don’t sail Royal, so I don’t know much about their fleet.

[C-Dragons]

1 hour ago, upwarduk said:

But Millennium has gone through an extensive refurb already. Why get rid of a ship they have invested so much money into?

X had no intention to sell the ships that had been refurbished pre-Pandemic.

Now financial situations may require them to. Refurbishments make the ships more attractive to potential buyers - they’re ready to put into service. But RCCL may keep them, just move the ships from X to a subsidiary.

Edited June 12, 2020 by C-Dragons

[SHIP TRAVELER]

This kind of uncertainty is the reason we have duel reservations in April of 2021.  We originally had a black Friday deal on a TA to Amsterdam on the Reflection in April 2021.  When our April 2020 TA on the Infinity was cancelled, we lifted and shifted our sky suite to the Infinity TA to Rome.  We are keeping the Reflection as a back up until final payment in case the Infinity disappears.

In these uncertain days nothing is a sure thing.

[hcat]

Celebrity will keep its plans secret for as long as it can with little or no regard for cruisers who need to make plans!

 

Same policy they follow regarding cancellations or  when negotiating a full charter...  They wrangle, we dangle.!

[Cruising89143]

I could see RCI retiring the three Pullmantur ships and move the three remaining Vision class ships to Pullmantur along with the Granduer. That would help reduce their capacity under the RCI brand. I don’t see any ships from X going anywhere. The Vision class ships entered service in the mid nineties. 
 

The Sovereign, Monarch and Horizon are late eighties/very early nineties and are expensive to operate. RCI also has the older Majesty and Empress who are probably at risk. 

[beaveh]

We can always club together and get our own celebrity ship

Only 300 million

https://commercial.apolloduck.com/boat/commercial-vessels-cruise-ship/563969

[dabear]

28 minutes ago, beaveh said:

We can always club together and get our own celebrity ship

Only 300 million

https://commercial.apolloduck.com/boat/commercial-vessels-cruise-ship/563969

 

The first ship listed for sale appears to be the Connie, which  is m class, has the same dimensions, gross weight and was built in 2002. 

Edited June 12, 2020 by dabear

[C-Dragons]

That website says the ship's current location is in Germany.

Connie is docked in Greece at the moment.

[diamondintn]

14 hours ago, D C said:

Cost effective is for the beancounters to determine 🙂
The gross operating cost of an Edge class at full capacity might be lower than an M-class at full capacity, but do those figures hold true with vacant cabins? or does the size of the E make for a larger crew regardless of the number of guests?  I would think that the mortgage payment on the E-class would reduce its operating margins.

 

The big picture is going to involve a lot of factors, including port availability and regional issues.  We have Canada closed off months, Guernsey is "COVID-free" and essentially isolated for who knows how long, and we have no idea about the Caribbean.  That's not to mention the Med, Asia, and Australian markets. 

 

 

 

I read an article on MSN today about some countries opening up this week for tourism. Two of them caught my eye because we are sailing to them April 2021 on Reflection. St Lucia and Antigua.