What happened

Shares of Carnival (CCL 0.61%) (CUK 0.66%) plunged roughly 10% after the cruise ship operator said it lost nearly $3 billion in its fiscal third quarter. Royal Caribbean (RCL 1.97%) and Norwegian Cruise Line Holdings (NCLH 2.31%) also fell nearly 5% on the news.

So what 

With its ships stuck at port due to COVID-related sailing restrictions, Carnival's losses are mounting quickly. It suffered a $2.9 billion net loss during the quarter ended Aug. 31, including $937 million in impairment charges related to the downsizing of its fleet. Carnival now plans to dispose of 18 ships, up from a prior projection of 13 back in July. 

Rough seas off the side of a cruise ship.

COVID-19 continues to batter the cruise ship industry. Image source: Getty Images.

To bolster its cash reserves, Carnival will sell $1 billion in stock. The move will further dilute shareholders, many of whom have already suffered sizable losses during the pandemic.

Now what 

Carnival did say that bookings for its cruise ships for the second half of 2021 were "at the higher end of the historical range." However, it remains to be seen if people will flock back to these ships -- which have been prone to COVID-19 outbreaks -- if coronavirus case counts remain high into next year.

More likely is that cruise traffic will remain suppressed well into 2021. Until a safe and effective vaccine or treatment for COVID-19 is developed and made widely available, Carnival, Royal Caribbean, and Norwegian Cruise Line Holdings could continue to burn through vast amounts of their shareholders' capital.