What happened
It's not quite all unicorns and rainbows for the cruise industry today, but all of a sudden, cruise stocks are looking up. In Thursday trading, shares of Carnival (CCL -1.14%) topped 5% earlier in the day, before falling back to a 4.5% gain as of 3:20 p.m. EDT. Fellow cruisers Royal Caribbean (RCL -0.45%) and Norwegian Cruise Line Holdings (NCLH 0.75%) benefited as well, rising 3.3% and 3.6%, respectively.
Image source: Getty Images.
So what
As the Miami Herald reported last night, Carnival "is still on track to resume cruises in the U.S. on Dec. 1 after a favorable ruling from a federal judge Wednesday."
Independent of coronavirus restrictions and no-sail orders, Carnival had been operating under a court order in Florida requiring it to certify that its ships were intact and not leaking oil before entering U.S. waters. The requirement was tied to a case in which Carnival had previously pled guilty to dumping oil into the ocean. Now, a new court ruling permits Carnival to make its certification 30 days prior to a cruise ship returning to U.S. waters from abroad, or seven days after returning, for vessels coming back to the U.S. prior to Dec. 31, 2020.
And the upshot is that, coronavirus permitting, Carnival should be able to resume cruising in December if it wants to.
Nor was this the only good news. In an earnings report this morning, American Airlines CEO Doug Parker apparently made some cautiously optimistic statements about the health of the holiday travel market, saying the outlook for vacation travel this December looks "relatively strong." He was speaking about the air travel market, but investors seem to be extrapolating from that to assume that demand for vacation-time cruising must be pretty strong as well.
Now what
Does any of this mean that Carnival's troubles are over? Hardly. There's still the potential for an extension of the CDC's no-sail order past its current expiration date of Oct. 31, for one thing. And cruise vacationers could refrain from cruising regardless of what the CDC says, if the second wave of coronavirus infections gets any bigger.
For today, however, the limited good news appears to be enough to lift investors' hopes, and Carnival shares are rising because of it.
