So is NCL ( NCLH ) in financial trouble ?

[eroller]

27 minutes ago, Beezo said:

 

 

Having said that - ALL of the cruise lines have a significant level of debt. Carnival is struggling to pay this down - they have had to dispose 20%+ of their fleet.  Below is a quick analysis of chances of bankruptcy.  Do take this lightly since there are a lot of factors than can happen - Ship sales, restructuring debt as it comes closer, etc.  NCL feels they can pay down their debt organically without issuing more shares and tapping into $1.7B of revolving credit they DO have access to. And remember - NONE of the cruise lines received bailouts like the airlines.

 

 

Interesting analysis thanks for sharing.  
 

None of the major cruise lines received bailouts for good reason.  The companies are not incorporated in the US therefore they were not eligible.  They benefit a great deal financially (year after year) compared to US incorporated companies so I have zero sympathy in that regard.  
 

I do hope they all get back on track and avoid bankruptcy, if for no other reason so we possibly see a reverse of the pay more and get less trend.  

[DCGuy64]

1 minute ago, eroller said:

None of the major cruise lines received bailouts for good reason

I disagree that that's a good reason. Our government routinely sends aid packages to the tune of billions of dollars annually to foreign countries, as well as providing food and shelter to people who aren't US citizens. I think it's pathetic that the government had the power to stop foreign-flagged cruise ships from sailing here and earning money, while simultaneously denying them any bailout money. There's something fundamentally wrong about being able to deprive someone of income and tell him to go to h*** when financial assistance is later available.

[chengkp75]

1 minute ago, DCGuy64 said:

I think it's pathetic that the government had the power to stop foreign-flagged cruise ships from sailing here and earning money, while simultaneously denying them any bailout money

The government didn't stop them from doing business, just from doing business in the US.  The fact that the rest of the world agreed is what caused the cruise lines' difficulties.  If the cruise lines wanted assistance from the US government, they should have flagged their ships in the US.  So, you equate humanitarian aid to cruising?  Wow.

[DCGuy64]

7 minutes ago, chengkp75 said:

they should have flagged their ships in the US

You and I both know why they don't, please don't insult my intelligence.

[eroller]

14 minutes ago, DCGuy64 said:

I disagree that that's a good reason. Our government routinely sends aid packages to the tune of billions of dollars annually to foreign countries, as well as providing food and shelter to people who aren't US citizens. I think it's pathetic that the government had the power to stop foreign-flagged cruise ships from sailing here and earning money, while simultaneously denying them any bailout money. There's something fundamentally wrong about being able to deprive someone of income and tell him to go to h*** when financial assistance is later available.

 

They already receive the equivalent of bailouts year after year by not being incorporated in the US.  That is already a big competitive advantage over US incorporated companies.  

[LloydJr]

NCLH stock has gone up about 7% over the past two days, so some investors don't appear to be worried about financial troubles.

[eroller]

10 minutes ago, chengkp75 said:

 If the cruise lines wanted assistance from the US government, they should have flagged their ships in the US.  

 

Agree 100%.  I believe American Cruise Line and AQV did receive some aid, as those cruise companies are incorporated in the US and have ships flagged in the US.  At great expense I might add compared to foreign flagged ships. 

[DCGuy64]

3 minutes ago, eroller said:

They already receive the equivalent of bailouts year after year by not being incorporated in the US.  That is already a big competitive advantage over US incorporated companies.  

OK, riddle me this: if it's so easy for a cruise company to incorporate in the US, would you care to guess how many US-flagged cruise ships there are in the United States? And I'm talking about ocean-going vessels, not river boats. The only one I'm aware of that is a big player is the NCL Pride of America. There may be other, smaller companies, but the fact is that RCI, Carnival, NCL, MSC and others choose to incorporate elsewhere because otherwise they would go out of business. There's no way they could pay US taxes and labor costs and still be able to offer the product they have to enough people and still remain profitable. Period. It would never happen, because if it did, they'd all have incorporated here long ago.

[chengkp75]

25 minutes ago, DCGuy64 said:

You and I both know why they don't, please don't insult my intelligence.

Then don't insult my intelligence by equating humanitarian aid with cruising.

14 minutes ago, DCGuy64 said:

There may be other, smaller companies, but the fact is that RCI, Carnival, NCL, MSC and others choose to incorporate elsewhere because otherwise they would go out of business.

So, they receive a "subsidy" by not paying wages and taxes, and not hiring US citizens, and then should be granted a further subsidy (bailout) just like companies that do pay US taxes and hire US citizens and pay wages that stay in the US to aid our economy?  Nike makes shoes in China, because they would go out of business trying to do it in the US, so should they have been considered for subsidy money?

[njhorseman]

3 hours ago, Beezo said:

 

A&K didn't just get the ships - they bought the whole brand, which also includes customer records.  Gave them a significant headstart over just buying two ships and creating a brand (like Ambassador, CFC, Cordelia).

 

Yes, A&K also bought the Crystal name and customer database, but that was a separate purchase made from Crystal's  assignment for the benefit proceedings in Florida. Crystal Cruises LLC owned the Crystal brand name and database, but they did not own the cruise ships, which had been arrested for non-payment of fuel bills and other monies owed to creditors.

 

Crystal's third ship, the Crystal Endeavor, was purchased by Royal Caribbean for a reported $275 million for its Silversea subsidiary and was renamed Silver Endeavour, so far more was paid for the newest of the three ships, which obviously did not come with the rights to the Crystal name or its customer database. Very simply, the nearly-new Crystal Endeavor could be placed back in service with little or no additional investment and its entire useful lifespan ahead of it, making it a far more valuable physical asset than the two much older Crystal ships that need expensive renovation and are many months away from returning to service. A&K reportedly also bid on Crystal Endeavor but were outbid by Royal Caribbean.

 

[DCGuy64]

2 hours ago, chengkp75 said:

Then don't insult my intelligence by equating humanitarian aid with cruising.

I didn't, you did that. I never equated the two, I compared them. Not the same as equating. I think we've pretty much exhausted the usefulness of this discussion so I won't comment further. Have a great day.

Edited January 5, 2023 by DCGuy64

[J0Y0US]

On 1/4/2023 at 10:08 AM, PATRLR said:

I'm sure this is coming, but, I for one would object.  I like my hardcopy Freestyle Daily.  

 

Do it by request is the fix. Additionally if you provide the FreeStyle format in PDF for you to get on your phone even better in addition to a normal app interface.

 

Heck even further when you get down with an event on the ship you can rate it and then state you would want to do it on your next cruise. When you get on your next cruise its premarked as its the same or similar to what you liked to do in the past.

 

Issue is they would need software developers to drive this action and someone thinking outside the box on how to get better engagement from their guests.

 

Another example they miss on is something that Royal already does which is allow you see all sailings daily schedule before you even board. That way you can check before you book or even after you book leading up to your cruise.

[J0Y0US]

3 hours ago, DCGuy64 said:

OK, riddle me this: if it's so easy for a cruise company to incorporate in the US

 

It would be much easier if other cruise companies didn't skirt US law and taxes..... They do skirt it so they don't as a business deserve a bailout with US tax money.

 

In the end US flag cruise ships do exist both in the River Cruising and Hawaii because its harder for other cruise lines to skirt the laws to cut costs.

 

3 hours ago, DCGuy64 said:

Our government routinely sends aid packages to the tune of billions of dollars annually to foreign countries, as well as providing food and shelter to people who aren't US citizens.

 

Non related and non relevant to the conversation. Aid packages and business bailouts have no correlation.

 

Now find a non-critical, non-humanitarian, non-diplomatic money being sent outside the US and we can talk about it.

[DCGuy64]

3 minutes ago, J0Y0US said:

 

It would be much easier if other cruise companies didn't skirt US law and taxes..... They do skirt it so they don't as a business deserve a bailout with US tax money.

 

In the end US flag cruise ships do exist both in the River Cruising and Hawaii because its harder for other cruise lines to skirt the laws to cut costs.

 

 

Non related and non relevant to the conversation. Aid packages and business bailouts have no correlation.

 

Now find a non-critical, non-humanitarian, non-diplomatic money being sent outside the US and we can talk about it.

Thank you for your comments.

[PATRLR]

2 hours ago, J0Y0US said:

Do it by request is the fix. Additionally if you provide the FreeStyle format in PDF for you to get on your phone even better in addition to a normal app interface.

 

Heck even further when you get down with an event on the ship you can rate it and then state you would want to do it on your next cruise. When you get on your next cruise its premarked as its the same or similar to what you liked to do in the past.

 

Issue is they would need software developers to drive this action and someone thinking outside the box on how to get better engagement from their guests.

Agreed, there is so much they could do with technology here. Sooo much!  And it would benefit the passengers who embrace the technology and could also benefit them with data on how passengers on what passengers are spending their time on.    But then all we need to do is look at the title of this thread and there's no doubt they won't be making the required investment any time soon.  

 

[armwinder]

On 1/4/2023 at 3:34 AM, shof515 said:

Teppanyaki is also reducing the food quality too. ive been seeing a new menu being posted that filet mignon is being replaced with a ny strip piece of meat

That is  too bad, the steak and eggs used to have a 5 oz filet a year or so they substituted  a new York strip, really thin also over seasoned in my opinion. 

[eileeshb]

15 hours ago, J0Y0US said:

 

{snipped}

 

Another example they miss on is something that Royal already does which is allow you see all sailings daily schedule before you even board. That way you can check before you book or even after you book leading up to your cruise.

yes, yes, yes... this would be fantastic. Heck, we know there's minimal changes to the schedule from sailing to sailing unless the ship is changing itinerary,  it's why people look for copies from people who are currently on the ship. Just upload the defaults permanently and then advertise changes like when a new show cast comes aboard or a staff change causes changes.  Imagine we could all plan our dining, show preferences and even excursion plans when we know which night  the seafood is on in the Buffet or which night Six is most likely to be on and the times. 

 

Of course the idiot brigade would have a meltdown over any change from the very first version of the schedule.

 

BTW in terms of potential money making for the Cruise lines they could approach places dealing with refugee crises like Ireland. There are so many asylum seekers and Ukranian refugees here some are in tents in the middle of winter !! The Irish government would probably quite happily hire a ship to house a few thousand until they get our national housing shortage fixed. 

[BCCRUSINGCOUPLE]

Some very interesting reading for sure.  I think the cruise lines definitely had issues during Covid and will take a while to get back on line. However, I’m sure they will be back at printing money.  Some of the big issues I notice was a lot of people defending the cruise lines when they were struggling which I understand however, now the shoes on the other foot they’re still cutting service raising rates and it’s coming to the point we’re paying for services that we’re not receiving. I feel it is still very important as a consumer that we speak up as if no one says anything the cruise lines will continue to keep cutting services 

[mking8288]

The Norwegian Pearl isn't likely to face problems filling the ship for a little while - anyone booked on the Pearl, especially this Spring ... probably should check carefully to see 

 

Charters, Meetings and Incentives (“CM&I”) division, will host 13 consecutive events over 66 nights in Spring 2023 showcasing (NCL)’s dedication to providing one of a kind, immersive adventures at sea for a range of passionate affinity communities. The newly formed “Experiences at Sea” brand will leverage Sixthman’s 21 years of experience ...  (oops - wait, full ship chartered - good for Frankie & company)

https://finance.yahoo.com/news/norwegian-cruise-line-holdings-experiences-140000208.html

 

This has been in the news and not discussed/debated here  😉   This should be forward-looking as positive for revenue outlooks.   And, the Epic is doing charter in the Fall as well.  Surely, it is good for Sail and Sustain.  

 

Now, happy debate. 

[DaCruiseBug]

On 1/5/2023 at 12:02 PM, DCGuy64 said:

I disagree that that's a good reason. Our government routinely sends aid packages to the tune of billions of dollars annually to foreign countries, as well as providing food and shelter to people who aren't US citizens. I think it's pathetic that the government had the power to stop foreign-flagged cruise ships from sailing here and earning money, while simultaneously denying them any bailout money. There's something fundamentally wrong about being able to deprive someone of income and tell him to go to h*** when financial assistance is later available.

 

Maybe it's just me but...i'd like to see the Government bailout nobody. My tax dollars should go to pay for our military, infrastructure, national parks etc...not bailing out private entities who made decisions which ultimately let to their financial ruin.

 

Also, the aid to foreign countries is generally viewed as being in the interest of the American people in terms of safety and security. Feeding people in Africa...well...seriously? Please don't ever compare this spending to wanting to have a cruise line bailed out so you can have a Mojito on the Lido deck ever again.

[zzdoug]

On 1/4/2023 at 8:57 AM, schmoopie17 said:

Not to mention the Freestyle Dailies and the inserts. Couldn't they just put that info on the TV and be done with it? 

 

Of course, that would greatly reduce the number of people asking current cruisers to post copies on CC...

Carnival did away with hard copies of the schedule handouts (Capers, fun sheets, or  whatever they call them) in favor of the app immediately after the pandemic restart in 2021. I believe they still offer the paper version at guest services desk but won't deliver it to cabins by default. I'm sure it saves a lot of paper and ink. I prefer paper but expect NCL to eschew paper by our next cruise in May. 

[zzdoug]

On 1/4/2023 at 4:01 PM, asmit4 said:

So here is a question for everyone--let's say they are in huge massive trouble. Let's say they go under---what happens with all the ships? The ships are their collateral and it's not like there are many buyers looking to buy the Prima or the Bliss. It's not like when someone goes bankrupt and the banks could take their house and resell it to a huge number of buyers. The only collateral they have to 'give up' are the ships themselves. Hardly a market for them. My guess is that the creditors are going to lose their butts but NCL will pull through just fine somehow. I feel like these cruise lines are too big/too unique to fail. 

One option is to sell the ships themselves and lease them back. It's pretty common in commercial real estate and most of the hotels in Las Vegas have done this.  I don't know how common it is for passenger or cargo ships but it seems theoretically possible. They may be limited by the debt already on each ship which is considerable, and also by the reality that a cruise ship is probably only useful to ncl for about 30 years, less than a hotel typically lasts. 

[ontheweb]

1 hour ago, zzdoug said:

Carnival did away with hard copies of the schedule handouts (Capers, fun sheets, or  whatever they call them) in favor of the app immediately after the pandemic restart in 2021. I believe they still offer the paper version at guest services desk but won't deliver it to cabins by default. I'm sure it saves a lot of paper and ink. I prefer paper but expect NCL to eschew paper by our next cruise in May. 

If they want to save paper, stop with the stupid ads delivered to cabins. They just go immediately into the trash as opposed to daily schedules that are very useful.

[At Sea At Peace]

On 1/4/2023 at 9:36 AM, Yesimapirate said:

Totally disagree.  NCL isn't going anywhere.   Nor are the other 3 major players.

 

Much like the post-911 airline situation, the only ones truly in danger are the creditors.  At some point,  the cruiseline holding companies with refinance to extend their debt.  Eventually,  if it become too much they'll delist and either go bankrupt or to private equity.  

 

November was the busiest month for bookings in the company's history.  They have a track record of profitability.  Wall St is not going to let them disappear. 

 

Well, that's one optimistic perspective along a lot of fronts.

 

Cruise Lines -V- Air Lines - US Covid Era Assistance

 

Air Lines - "In the Money"

 

The 10 major US 'passenger' airlines received more than $54 billion in 'direct payments' from the US. 

 

They also received $25 billion in subsidized loans from the US Treasury.

 

They 'suspended' the 7.5% excise tax on domestic air travel.

 

They 'suspended' federally associated payments to airports and land based contractors.

 

Cruise Lines - "Zip"

 

In essence, what the 10 air lines got in the $54 billion 'for free' was equivalent to what the 3 major cruise lines "borrowed" and "lost!"

 

On 1/4/2023 at 9:36 AM, Yesimapirate said:

the only ones truly in danger are the creditors. 

 

Equity gets scrapped first, as always.

 

Then 'lower tiered, unsecured creditors are next, as always.

 

In play, over $10 billion in customer deposits across the big 3.

 

The secured creditors control the future, have direct positions in the best ships, islands, etc. and are not known for 'sharing.'

 

NCL will likely continue to sail, just under some 'other than current ownership' arrangement.

 

 

 

 

[zzdoug]

2 hours ago, ontheweb said:

If they want to save paper, stop with the stupid ads delivered to cabins. They just go immediately into the trash as opposed to daily schedules that are very useful.

Be careful what you wish for... do we really want those becoming pop up ads in our phones? At least I can quickly throw paper printed ads away in the trash.