Carnival shares tank 31% after Princess Cruises says it will suspend global operations over coronavirus outbreak

Carnival shares tank 31% after Princess Cruises says it will suspend global operations over coronavirus outbreak
William Feuer Mar 12 2020 https://www.cnbc.com/2020/03/12/carnivals-princess-cruises-to-pause-glob...

*Shares of Carnival Corp. slid in pre-market trading Thursday after its Princess Cruises line announced the suspension of all operations due to the rapidly spreading COVID-19 pandemic.
*The announcement impacts the cruise line’s fleet of 18 ships, the company said, and will affect voyages from March 12 to May 10.
*Pre-market trading in the stock was halted pending the news.

Shares of Carnival Corp. plunged by more than 31% Thursday after its Princess Cruises line announced it was immediately suspending all operations for two months due to concerns over the rapidly spreading COVID-19 pandemic.

The announcement impacts the cruise line’s fleet of 18 ships, the company said, and will affect voyages from Thursday to May 10. Princess Cruises President Jan Swartz said the company is taking the “bold action” to reassure investors of its commitment to the well-being of its passengers.

Pre-market trading in the stock was halted pending the news. Shares of Carnival, which owns Princess Cruises, have fallen by 70.6% since Jan. 1. The stock closed at $14.97 a share Thursday, down 31.2% for the day.

Current Princess voyages that are underway and scheduled to end before March 17 will carry on as planned, the company said. Voyages that extend beyond March 17 will be ended at the “most convenient location for guests,” the company added.

Princess said it will compensate affected customers with credit for a free cruise with “an additional generous future cruise credit benefit” that they can apply toward another cruise. Customers can also request a cash refund online.

“We’ve been asked, and we’ve asked ourselves, why COVID-19 seems to be impacting Princess so heavily,” Swartz said in a video shared on YouTube. “We don’t really know.”

The State Department earlier this week issued an official advisory for Americans, especially those most vulnerable to COVID-19, which includes those with underlying health conditions, to “not travel by cruise ship.”

Princess Cruises has been hit particularly hard by the COVID-19 pandemic. One of its ships, the Diamond Princess, had one of the largest clusters of confirmed COVID-19 cases outside of China with more than 700 infected passengers and crew. The Diamond Princess and its 3,700 passengers and crew were quarantined at a Japanese port on Feb. 4 after a previous guest, who didn’t have any symptoms while aboard the ship, tested positive for the virus.

Several people died after disembarking the ship. The Japanese government and other nations eventually evacuated their citizens from the ship.

Last week, U.S. officials announced 21 confirmed COVID-19 cases on another Carnival-owned ship, the Grand Princess, which was moored off the coast of California. The ship had roughly 3,500 passengers and crew on board. After several days, California officials brought the ship to the Port of Oakland, where passengers are disembarking and being transported to federal quarantine facilities.

Representatives of the cruise ship industry have met with White House officials, including Vice President Mike Pence, to discuss a coordinated response to COVID-19, Carnival Corp. spokesman Roger Frizzell said earlier this week.

“We made it very clear that we needed cruise lines to be safer; to establish and to embrace new protocols; screening onboard, screening off; new medical protocols; shipboard processes for evacuating people that may contract coronavirus or a serious illness,” Pence said at a news briefing on Monday. “We’re going to work with the cruise line industry to improve the safety, improve the health environment on cruise lines, in the short term and in the long term.”

California Gov. Gavin Newsom said earlier this week that he is weighing cruise restrictions along the California coast as he awaits new federal guidelines for the industry. He said cruise operators should, in the mean time, introduce aggressive requirements for travelers “at the peril of that industry collapsing.”