Royal Caribbean Eyes COVID-19 Testing To Help Restart
Royal Caribbean Group said on Monday testing passengers for COVID-19 was “very likely” going to be part of a new set of safety measures planned to get its ships to resume sailing after months of being docked.
The company’s shares rose as much as 11% in early trading.
“We have not yet reached a point in our protocols where we’re ready to publish and release for discussion. But it’s very likely that testing will occur,” said Michael Bayley, chief executive officer of Royal Caribbean International.
Royal Caribbean and Norwegian Cruise Line are working on new safety standards, tapping former Food and Drug Administration Commissioner Scott Gottlieb to serve as co-chair of a group called the “Healthy Sail Panel”. Royal Caribbean said it expected the panel to approve a return-to-sailing plan by the end of the month for submission to the U.S. Centers for Disease Control (CDC).
“They’re going to have to be able to test, because if you get one infected person on a ship – that’s going to create a big problem,” said Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, adding that implementing testing may be the only way the CDC lifts its no-sail order.
U.S. cruise operators have said ocean liners would not ferry passengers again until at least the end of October, as coronavirus cases rise in the United States.
Royal Caribbean said booking trends for the second half of 2021 were encouraging, with guests willing to pay more than what they did in 2019.
The company, which has dropped “Cruises” from its corporate name, expects to burn $250 million to $290 million of cash on average per month, while its operations remained suspended.
On an adjusted basis, Royal Caribbean lost $1.3 billion, or $6.13 per share in the second quarter, bigger than analysts’ estimates of $4.82.
Reporting by Uday Sampath; Editing by Shounak Dasgupta