Norwegian Cruise Line Holding’s President and CEO Frank Del Rio can look back at a successful first Quarter for 2022, despite the issues that came up through the situation in Eastern Europe and the Omicron outbreak at the start of the year.
Norwegian Cruise Line has hit the ground running as it became the first company to return to service with its entire fleet of 17 ships this week. Likewise, bookings are looking positive and edging towards the 2019 results, the highest numbers of all time pre-pandemic.
Norwegian Closes Down String First Quarter
Norwegian Cruise Line Holdings has seen a solid start to the year, despite concerns that arose due to the Omicron variant. By the end of the quarter, the company, which operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas, had 85% of its fleet operational.
Financially, the company reached a slight positive on its operating cash flow, something that will likely start to become fully positive during the course of 2022. Losses are still there, as the company incurred a $1 billion loss over the quarter.
Although slightly lower than the $390 million projected per month for the quarter, cash burn was still relatively high at $375 million per month.
Much of this had to do with the conflict in Eastern Europe and the disruptions, including additional travel restrictions, increased health-related protocols, and inevitable port closures that Omicron caused.
As a result of the situation in Eastern Europe, Norwegian Getaway was repositioned to Port Canaveral, Oceania Cruises’ Marina to the British Isles, and Regent’s Seven Seas Splendor to Northern Europe. NCLH has also removed all calls to ports in Russia from its itineraries in 2023.
Despite the challenges, NCLH is looking forward to a successful 2023. Bookings are looking strong, and with all ships sailing now, it is eying increasing occupancy levels onboard its vessels.
Strong Start to Second Quarter
Norwegian Cruise Line completed its phased fleet relaunch, the Great Cruise Comeback, on May 7, 2022, and its entire 17-ship fleet is now back in operation. This significant achievement marks the completion of a nearly 10-month process to return ships to service, which began with Norwegian Jade in July 2021.
Frank Del Rio, President and CEO of Norwegian Cruise Line Holdings: “Last week we reached the biggest milestone yet in our Great Cruise Comeback as Norwegian Spirit, the last ship in our fleet to resume sailing, welcomed guests onboard in Papeete, Tahiti.“
“The herculean effort to restart our fleet would not have been possible without the incredible fortitude of the entire Norwegian team and the unwavering support of our key partners and stakeholders around the world.”
With the cruise line expecting to welcome one additional ship, Norwegian Prima, later this year, the future is indeed looker brighter than was the case only a year ago.
Mark A. Kempa, executive VP and CFO of Norwegian Cruise Line Holdings: “With our entire fleet now back in revenue service we reached a critical milestone, which we believe will result in positive Operating Cash Flow for the second quarter.“
“We are focused on building on this recovery momentum and gearing up to deliver on our industry-leading growth profile through 2027, representing 50% capacity growth versus 2019, beginning with the incredible, first in its class, Norwegian Prima this summer.”
Oceania Cruises also celebrated the launch of its newest ship, the 67,000 gross tons, 1,200-guest Vista at the Fincantieri shipyard in Sestri Ponente, Italy. Vista will debut in April 2023. The cruise line also announced a stem-to-stern re-inspiration for Riviera and Marina in 2022 and 2023.
Regent Seven Seas Cruises, NCLH’s ultra-luxury cruise line, marked the return of its entire fleet to service on March 26, 2022.
Bookings Update
To achieve its goals, Norwegian Cruise Line Holdings will need one thing, guests onboard its ships, and here too, things seem to be going in the right direction. Although disrupted temporarily following the start of the developing situation in Eastern Europe, net bookings have rebounded and recently surpassed pre-Omicron levels.
Those bookings are now on course to match historical load factor levels. Bookings for 2023 are equally positive, with pricing significantly higher and at record levels over 2019. Those numbers include all three brands, which are all approaching record numbers.
This March, Oceania Cruises set a new single-day booking record focused mainly on the 2024 world cruise and four new grand voyages. New guests continue to find Oceania and its ships, almost half of the 2024 world cruise bookings were from new to brand guests.
Where all this will lead remains to be seen, NCLH still expects to run a loss for the second quarter of 2022. Although the company has hedged 41% of its expected fuel usage for the year 2022, current fuel prices will hurt NCLH, especially when ships are not yet at full operational capacity.
