Shares of Carnival (CCL -1.88%), the biggest of the American cruise lines, dropped yesterday along with those of all its peers when investors were disappointed by Norwegian Cruise Line Holdings' (NCLH 0.31%) earnings announcement.
Today, Carnival stock is moving back up -- 3.8% higher as of 3 p.m. EST -- and probably also because of Norwegian.
Cruise stocks had a rough 2020, and a rough start to 2021 as well, as the pandemic and recession continue to take their toll as their cruise ships remain locked in port. The good news now is that an end of the cruise suspensions may be in sight.
Sometime in the near future, the U.S. Centers for Disease Control and Prevention (CDC) is expected to announce new technical regulations permitting the resumption of trial cruises preparatory to a further reopening of the cruise industry. And helping to nudge the CDC to speed up the release of those regs were some comments from Norwegian Cruise CEO Frank Del Rio.
During Norwegian's earnings call last night, the cruise ship boss pointed out that after the trial cruises are over, and the CDC allows cruise lines to resume at least restricted operations, Norwegian will need about 90 days to get back to cruising operationally. It would be ideal, Del Rio said, if that green light were to come by June or July of this year, since this would allow Norwegian (and by extension, perhaps Carnival as well?) to get its entire fleet back in the water in time for the 2022 cruising season to begin.
And Del Rio further expressed hope that the CDC will permit cruise lines to utilize at least 50% of capacity initially on their ships.
The downside of that statement is inherent in the upside: If the CDC waits any longer than July, the cruise lines probably will not be able to get back to full strength in time to hit the surf running in 2022.
But even so, investors in Carnival seem to be hoping today that the CDC will take the hint from its rival, and get the ball rolling before it's too late.