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Royal Caribbean Extends Its Global Suspension of Cruising

By Daniel B. Kline – Apr 17, 2020 at 9:15AM

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The cruise line has a new date by which it hopes to resume some activities.

Royal Caribbean Cruises (RCL 3.34%) has been shut down across the globe since March. It's currently operating under an order from the Centers for Disease Control (CDC) which sets parameters under which cruising can resume.

That order is in effect for 100 days but there are a number of ways in which it can be removed sooner. For now, Royal Caribbean has been moving carefully and the company remains optimistic it will resume operations before the 100-day mark.

The cruise line has, however, once again pushed back the date it expects to return to operations.

A Royal Caribbean cruise ship

Royal Caribbean has pushed back its return to the seas. Image source: Royal Caribbean.

When does Royal Caribbean hope to cruise?

It's important to note that any dates Royal Caribbean shares are essentially wishful thinking. Before it can actually begin operations, it needs to meet the standards set by the CDC, and it does not control some of the parameters it needs to meet to be able to sail again. Still, the company has set a return date:

Given global public health circumstances, Royal Caribbean Cruises Ltd. has decided to extend the suspension of sailings of our global fleet through June 11, 2020.

We are working with our guests to address this disruption to their vacations, and we are genuinely sorry for their inconvenience.

We expect to return to service on June 12.

If that happens, it will be a limited return, as some U.S. ports have already announced they will remain closed past that date.

What does this mean for stockholders?

Royal Caribbean has fully tapped its credit line and will likely need to take on added debt in order to make it through this period. It's possible the company will have to declare a Chapter 11 bankruptcy and that could wipe out shareholders.

The cruise line has not even hinted at that possibility, but it's worth considering before you think about buying shares.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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