Please ensure Javascript is enabled for purposes of website accessibility

Norwegian Cruise Line: 90-Day Window Still Needed Once CDC Gives Green Light to Sail

By Rich Duprey - Feb 26, 2021 at 8:57AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Unfortunately, cruise ship operators are still stuck at a red light.

Although investors may be waiting just as eagerly as the cruise ship operators for the U.S. Centers for Disease Control and Prevention (CDC) to give the green light to resume sailing, Norwegian Cruise Line Holdings (NCLH 3.31%) says voyages won't launch right away. It still needs another 90 days to get the cruise ships shipshape for sailing.

That means if the CDC gave the OK today, the earliest Norwegian could begin sailing would be the beginning of June. Unfortunately, no one is expecting the CDC to lift its embargo any time soon.

Green traffic signal

Image source: Getty Images.

Still a rudderless situation

Norwegian Cruise Line CEO Frank Del Rio said there were high hopes for resuming voyages in the first quarter after the CDC issued its conditional sail order last October, but as everyone quickly discovered, the agency's conditional order really wasn't much different from its no-sail order.

Norwegian ended up repatriating 4,000 crew members back to their home countries who had been on standby since it was clear no one was going anywhere.

As the CDC continues to vacillate over when it will actually allow cruises to resume, Norwegian is burning through some $175 million a month in cash. And those costs will rise when it begins preparing to reenter the ship into service.

During the 90-day window, Norwegian will initiate a phased restaffing of its crew and start marketing cruises again. It also needs to recall the ships depending upon where they're stationed in the world.

Del Rio noted to have 100% of its fleet operational by early 2022, it would require approximately six to seven months of pressing one ship a week into service, but that's only if it got the go-ahead today. It's expected the ships will only be allowed to operate at around 50% capacity at most once the green light is given.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
NCLH
$13.73 (3.31%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.