Renewable Energy Helps Utilities Survive Virus Slump

A support vessel is seen next to a wind turbine at the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool, Britain September 5, 2018. REUTERS/Phil Noble

European utilities with bulging renewable energy portfolios are showing that the way out of the coronavirus slump is coloured green.

Energy companies from Orsted A/S to Iberdrola SA reported robust first-quarter earnings in a period that has been bedevilled by a slump in energy demand and a collapse in gas prices. Owning large wind and solar portfolios has so far protected those companies from the worst effects of the crisis.

Utilities are the third best performing sector on the Stoxx 600 this year, down 11% instead of the 17% slump the broader market has suffered.

“There is complete consensus that the road to economic recovery must be green,” Ignacio Galan, Iberdrola’s chairman, said after announcing the results on Wednesday.

Here follows a round-up of the key energy earnings:

Orsted

The world’s biggest developer of offshore wind farms gave a sign that green power generators will emerge from the crisis relatively unscathed. The Danish firm maintained its earnings guidance for the year in its first-quarter update to the market.

Conservative hedging and 90% of generation from renewables should largely shield Orsted’s profit from the sharp decline in power prices and demand, according to Bloomberg Intelligence.

However, what lies ahead may be harder to navigate. Offshore wind projects in the U.S. are facing regulatory delays, pushing back the moment hundreds of megawatts were due to come online, potentially by years.

Iberdrola

The Spanish energy giant shrugged off any concerns that the coronavirus is hurting its business despite a collapse in demand in one of the European nations hit hardest by the pandemic. It maintained its growth and dividend target for the year. It pointed to 8.5 gigawatts of new capacity under construction as well as plans to hire 5,000 people as all reasons to be optimistic for the future.

Vattenfall

The state-owned Swedish utility showed how to profit from a collapse in prices by making 1.77 billion kronor ($180 million) from buying and selling energy. Traders managed to navigate volatile markets driven by the growing impact of the pandemic and a glut of natural gas that sent European benchmark prices down by almost half this year. Profit for Vattenfall’s growing wind business was up 44%.

Naturgy

The utility said Wednesday that it plans to revise all its natural gas procurement contracts in 2020. Gas prices slid to record lows in Europe and Asia, and many buyers are looking for deferrals of shipments. The rout is pushing gas buyers to seek better deals from suppliers in a market that’s seen to remain in a glut until at least the middle of the decade.

–With assistance from William Mathis and Lars Paulsson.

Class Action Suits Face Uphill Battle Against Cruise Lines

The Grand Princess cruise ship carrying passengers who have tested positive for coronavirus arrives in San Francisco Bay, California, U.S. March 9, 2020. REUTERS/Fred Greaves

After two passengers on their luxury cruise tested positive for Covid-19 in March, Emilio and Barbara Hernandez were so frantic to get off the ship, they wrote a note to the captain.

The Costa Luminosa sailed on with them still on board, and they ended up with the virus. Now recovering, the Hernandezes and 98 fellow passengers have sued Costa Cruise Lines Inc., a brand owned by Carnival Corp., alleging the firm endangered passengers’ lives through negligence and bad decision-making.

A Costa spokeswoman said the company stepped up its sanitation of ships and then took action, including quarantining passengers, after it learned of the positive test results.

The Hernandezes and their fellow plaintiffs are seeking class-action status. They may have rough sailing ahead.

The tickets that cruise passengers buy resemble legal contracts, and they generally contain language barring customers from filing class-action suits – lawsuits that allow one or more plaintiffs to act on behalf of a larger group. That’s just one of several built-in legal protections in cruise tickets meant to safeguard companies against a rash of litigation that’s already arising from the coronavirus pandemic.

“These claims are enormous – nothing the industry’s seen before with so many passengers fallen sick and bringing suit,” said Martin Davies, director of the Tulane Maritime Law Center at Tulane University Law School. Any judgments would be paid out of an insurance pool that the cruise lines have formed, Davies said.

Currently, no cruise company faces more claims related to the virus than Carnival, the industry’s largest operator. At least 22 lawsuits have been filed against Carnival-owned companies, seeking millions of dollars in damages. The company said it doesn’t comment on active litigation.

By comparison, Celebrity Cruises, owned by the second-largest company, Royal Caribbean Cruises Ltd., faces just one U.S. lawsuit so far: a proposed class-action filed by crew members who allege Celebrity failed to protect them from the virus. Norwegian Cruise Line Holdings Ltd., the third-largest, faces a shareholder lawsuit that alleges the company failed to disclose adverse facts that affected it due to Covid-19. Lawyers say passenger suits against other cruise companies are probably coming.

Some of the virus-related claims, including the Hernandezes’ case, seek class-action status and involve multiple plaintiffs, totalling almost 200 so far.

But suits seeking class-action certifications face an “uphill battle,” Davies said, because of the language contained in the passengers’ tickets. “Provided that’s what the contract says, generally the courts will find that enforceable.”

Range of Protections

It’s not uncommon for big businesses of all sorts to insist on class-action waivers in their contracts, but cruise operators have a range of other legal protections as well. Some of them stem from Byzantine maritime laws that date to the 19th Century when policymakers wanted to encourage investment in the shipping industry.

“If you print out one of these tickets, it’s like 20 pages of gobbledygook,” said John Hickey, a maritime lawyer. Hickey, who spent almost two decades defending cruise operators in court, now represents plaintiffs against them. “Most people have no idea the limitations they’re presented with.”

For example, judgments for deaths that occur far from U.S. ports are limited by the Death on the High Seas Act, enacted in 1920. Most ticket contracts limit any legal actions to select federal courts, predominantly in Florida or Los Angeles, no matter where the customers live. And most of them require passengers to notify a cruise operator within six months that they intend to sue.

In general, cruise industry representatives say it’s unfair to single out cruise operators, who they say implemented more aggressive screening and prevention measures related to Covid-19 than other travel sectors did.

Cruise lines “took immediate and aggressive action based on the information that was available when it was available every step of the way,” said Bari Golin-Blaugrund, a spokeswoman for the Cruise Lines International Association. “Importantly, all decisions were based upon the expertise and guidance of prevailing health authorities.”

The U.S. Centers for Disease Control and Prevention on March 14 ordered cruise ships in U.S. waters to suspend operations after travellers on more than 30 voyages were infected with Covid-19.

The Hernandezes’ tickets for the Costa Luminosa contained a “patently unfair” prohibition on class actions, said their lawyer, Michael Winkleman of Florida. He acknowledged “significant hurdles” for their lawsuit, which alleges that the bar on class actions should be voided because Costa Cruise Lines acted “intentionally by exposing passengers to a highly contagious virus” for which there’s no vaccine.

If the case isn’t certified as a class action, Winkleman said, he intends to file cases for the plaintiffs individually or in smaller groups. Class-action lawsuits, which can result in larger judgments or settlements, can help to move cases more swiftly for plaintiffs. Most plaintiffs’ law firms that pursue them do so on a “no win, no fee” basis, banking on bigger payouts, said Davies, the maritime-law professor.

Suits’ Allegations

“The ship never should have sailed,” Emilio Hernandez, 51, said in an interview. “They put profit over the safety of passengers and crew.”

He and his wife almost cancelled their March 5 sailing on the Costa Luminosa to Antigua and Europe, but Costa assured them precautions would be taken, he said. Their lawsuit alleges that the operator proceeded with the trip despite knowing that at least one passenger from the ship’s previous voyage, who disembarked Feb. 29, had coronavirus symptoms.

That passenger left for a medical emergency that was “not even connected to any flu-like symptoms,” said Rossella Carrara, a spokeswoman for the cruise operator’s Italian parent company, Costa Crociere Group, which is also owned by Carnival.

Sanitation procedures on the ship were stepped up ahead of the Hernandezes’ cruise, Carrara said, and quarantine of all passengers and other measures, such as daily temperature checks, were adopted after the company learned of positive test results.

Costa has said previously that the company passed information to Costa Luminosa passengers as soon as it received it and that it suspended new cruises on March 13, the day it learned that a passenger on its cruise had tested positive.

Many of the coronavirus lawsuits filed thus far argue that the companies should have known how infectious the pathogen was after an outbreak in late February on the Diamond Princess, which is operated by Carnival’s Princess Cruise Lines Ltd. What began as fewer than a dozen infections quickly spread to more than 700 passengers and eventually killed at least 13 despite a quarantine of the vessel off Yokohama, Japan.

Lawsuits filed by passengers of another Princess vessel, the Grand Princess, allege that the cruise line knew some people aboard had Covid-19 symptoms when the ship docked and boarded new passengers in San Francisco on Feb. 21 for a cruise to Hawaii. The two symptomatic passengers disembarked that day; one tested positive shortly afterwards and died, prompting California officials to refuse to let the ship dock.

Grand Princess

The Grand Princess suits, filed by lawyer Debi Chalik, claim that the cruise operator alerted passengers of the ship’s previous cruise about potential Covid-19 exposure in a Feb. 25 email, but didn’t warn passengers on its Hawaii cruise. Chalik’s office said it’s representing dozens of plaintiffs.

A spokeswoman for Princess Cruises said the company’s response to the Covid-19 outbreak “has focused on the well-being of our guests and crew within the parameters dictated to us by the government agencies involved and the evolving medical understanding of this new illness.” She said the company doesn’t comment on pending litigation.

On March 4, Carnival’s Chief Medical Officer, Grant Tarling, notified passengers and crew on the Grand Princess that the CDC was investigating a cluster of coronavirus cases connected to the previous voyage, according to the Princess website. It warned the 60 or so guests who also had sailed on that trip that they “may have been exposed.” It was then – two weeks after the voyage began – that testing started, the suits allege.

When the ship was finally permitted to dock, 21 people tested positive. All American travellers were quarantined on U.S. military bases.

Carnival’s President and Chief Executive Officer, Arnold Donald, told Bloomberg Businessweek in an April 16 article that his company’s response was reasonable under the circumstances. “This is a generational global event — it’s unprecedented,” he said.

Inspections Questioned

Before the new coronavirus, the cruise industry had generally avoided large-scale litigation over infectious disease outbreaks at sea. Since 2006, there’d been fewer than 10 lawsuits filed over norovirus, the notorious gastrointestinal ailment that for years has ruined some passengers’ experiences.

Yet many of the Covid-19 lawsuits raise questions about the inspections that U.S. officials instituted in response to norovirus outbreaks. Plaintiffs in the Grand Princess suits claim the cruise operator didn’t adequately sanitize the vessel between voyages. And Winkleman, the Hernandezes’ lawyer, said he plans to focus part of his cases on Carnival’s record of ship inspections and history of outbreaks at sea.

Costa Luminosa

The Costa Luminosa and the Grand Princess both have unremarkable inspection records. Ships need an 86 or higher to pass under the CDC’s Vessel Sanitation Program. The Costa Luminosa was last inspected on Jan. 5 and received a 94. The Grand Princess passed its last inspection in June with a 93.

The program subjects ships that dock at U.S. ports to surprise inspections twice a year. Since 2016, ships owned by Carnival fail about 3% of their inspections. Norwegian Cruise Line has the worst failure rate at 4% and Royal Caribbean’s rate is about 1%.

Carnival spokesman Roger Frizzell noted that the company makes up about half the industry, and said its ships “typically perform extremely well” during inspections. He said Carnival-owned ships have received the highest number of perfect scores as well.

For now, with cruises cancelled and the industry in a kind of suspended animation, the lawsuits and their claims represent a potential challenge that cruise operators haven’t seen before, said Ross Klein, an associate dean at the Memorial University of Newfoundland in Canada who has studied the cruise industry for more than two decades. “There are still a lot of ifs” about the success of the legal claims, he said, but the risk for the companies is there.

“The industry hasn’t had any calamitous losses – nothing that would be potentially as large as this if the cases proceed in court,” Klein said.

Fred Olsen creates ‘Plain Sailing Guarantee’

Fred Olsen creates ‘Plain Sailing Guarantee’

Fred Olsen Cruise Lines has created a ‘Plain Sailing Guarantee’ including ‘quibble-free refunds’ and flexibility for guests wishing to transfer to alternative cruises.

The guarantee, which is “designed to offer reassurance during the Covid-19 pandemic”, also spells out revised payment terms including balance payments being due 28 days before departure, rather than 90 days.

Guests who transfer to another cruise will receive a future cruise voucher on top of any funds that have already been paid, which can be put towards another sailing. This voucher will be valid for 24 months, with all funds to be automatically refunded, plus an additional 5%, if it is not used within this time.

Any guest with a 2020 cruise booked can also choose to transfer to another cruise on sale, even if their sailing has not been cancelled.

Jackie Martin, marketing & sales director, said: “What our new Plain Sailing Guarantee does is set out clearly what options are available to guests.

“Of course, it goes without saying that all guests are entitled to a full refund on any monies paid when a cruise is cancelled. But we know that a number of our guests are keen to enjoy cruising with us again when they can, so we have made it easy for them to transfer their booking.”

She added: “We know that everything seems a little uncertain just now, and some people may want a little more time to decide where and when they may want to travel again, which is why our future cruise voucher will last for 24 months.

“If at the end of this time some guests have still not managed to find a cruise to suit, we will automatically refund everything they have already paid, plus an additional 5%, as a thank you for their support and to cover any interest they may otherwise have accrued during this time.

“This is a challenging time for us all, and I would like to thank all of our guests for their support as we sail these choppy seas, and we can’t wait to welcome our guests back on board with us as soon as it is safe to do so.”

Last week, Fred Olsen extended the cancellation of sailings to an unspecified date beyond May 23 in the wake of the ongoing coronavirus pandemic.

The line will be assessing all upcoming cruises from May 23 in date order.

Meyer Turku Announces 450 Permanent Layoffs

A cruise ship under construction at the Meyer Turku shipyard in Turku, Finland. Photo: Meyer Turku

HELSINKI, April 28 (Reuters) – German shipyard Meyer Werft’s Finnish subsidiary on Tuesday started statutory talks to lay off up to 450 of its roughly 2,000 employees because of a hit to business from the coronavirus pandemic.

The shipyard, in Turku on Finland’s west coast, had initially started talks over temporary layoffs but said the market situation had now forced it to look for permanent cuts.

“These negotiations will include the permanent layoff of 450 people and another 900 are affected by other measures. These include temporary layoffs of different length, work time adjustments and other arrangements,” the company said in a statement.

Instead of ramping-up from one to two large ships delivered per year until 2023, the assumption is now that the Turku yard will build just one large cruise ship per year, it added.

“The corona pandemic has changed the situation unexpectedly and totally. We are facing the fact that the corona-caused pause in cruising requires to stretch the order book,” said Meyer Turku Chief Executive Jan Meyer. (Reporting by Anne Kauranen; Editing by Mark Potter)

Norwegian Cruise Line Withdraws Forecast

Norwegian Bliss in Ponta Delgada photo credit Dave Jones

 Norwegian Cruise Line Holdings Ltd on Monday warned of a quarterly loss and withdrew its 2020 forecast, as the cruise operator struggles with the suspension of all voyages through the end of June due to the coronavirus crisis.

The pandemic has halted international travel and effectively shut down the cruise ship and airline industries, with companies, now bleeding cash and scrambling for new funds to ride out the slowdown that could last longer than expected.

Shares of Norwegian Cruise and rivals Carnival Corp and Royal Caribbean Cruises have taken a hit in the past few months as ships remain docked at ports and people wary of taking trips in the future.

The cruise liners are also not eligible to receive funding under the coronavirus stimulus bill since they were not incorporated in the United States, adding to further woes for the companies.

Norwegian Jade Photo was taken from a tender credit Dave Jones

Norwegian Cruise withdrew its forecast for the first quarter and the rest of the year but said it expects to report a loss for those periods. Royal Caribbean has also withdrawn its forecast, while Carnival, which operated two of the virus-stricken cruises, has predicted an annual loss.

Shares of the Miami-based Norwegian Cruise rose about 9%, while those of Royal Caribbean and Carnival were up about 8%. The stocks have lost about three-quarters of their value so far this year.

Norwegian Cruise said it would cut $515 million in spending to boost its cash reserves and estimated cash burn of about $110 million to $150 million per month as suspension of its three brands continue.

The company, which had about $1.4 billion in cash and cash equivalents at the end of March, said on Monday it had $1.8 billion of ticket sales as of March 31, that includes cancellations of about $850 million through June 30.

Despite growing cancellations, Chief Executive Officer Frank Del Rio, was optimistic about future demand, echoing Carnival’s CEO Arnold Donald who has predicted strong 2021 bookings.

“We believe the disruption to the travel industry, while swift and severe, will eventually subside,” Del Rio said.

Norwegian Cruise said booking trends indicate demand for cruise vacations for 2021 is essentially flat, although at lower prices.

Nearly 150 Total Coronavirus Cases Confirmed on Cruise Ship in Japan

An aerial view shows Italian cruise ship Costa Atlantica in Nagasaki, southern Japan April 21, 2020. Kyodo/via REUTERS

Nearly 150 cases of coronavirus infection have been confirmed among crew members of an Italian cruise ship docked in Japan after health authorities finished testing everyone on board, an official said on Saturday.

The Nagasaki prefecture official said 57 more crew had tested positive, bringing the total infections on board the Costa Atlantica to 148, roughly one-quarter of the vessel’s 623 crew members.

Authorities began testing after one crew member tested positive for the virus earlier this week. No passengers are on board the vessel, which has been docked in Nagasaki in southwestern Japan since February for repairs and maintenance after the pandemic prevented scheduled repairs in China.

The official told a news conference that the prefecture was discussing with the national government how to handle a large number of positive infections on the ship.

He added that there was no change in plans to send those testing negative to their home nations as soon as possible.

The infection cluster on board the vessel comes as hospitals are running out of beds in some parts of Japan, where the national tally of virus cases has risen above 13,000. Some 350 people have died. Nagasaki, excluding the ship figures, has seen a relatively low number of 17 infections and one death.

Of those infected on board the Costa Atlantica, only one crew member has been admitted to hospital, while others remain onboard, having shown slight or no symptoms.

Nagasaki authorities had quarantined the vessel on arrival and ordered its crew not to venture beyond the quay except for hospital visits.

But prefecture officials said earlier this week that some of the crew had departed without their knowledge, and sought detailed information on their movements.

The cruise ship infections follow a similar incident earlier this year when more than 700 passengers and crew tested positive for the virus on the Diamond Princess cruise liner docked in Yokohama. (Reporting by Naomi Tajitsu and Chris Gallagher; Editing by Muralikumar Anantharaman and Ros Russell)

Boeing deal for Embraer collapses

Boeing deal for Embraer collapses

The proposed $4.2 billion sales of Brazilian aircraft manufacturer Embraer to Boeing has collapsed, according to reports.

Boeing was reported to have ended talks due to the impact of the coronavirus pandemic and the grounding of its 737 Max fleet, but Embraer has threatened to sue.

The Brazilian firm accused Boeing of “manufactured false claims” and said that it has “wrongfully terminated” the deal.

“We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the (deal), because of its unwillingness to complete the transaction in light of its own financial condition and 737 Max and other business and reputational problems.”

Boeing, which is expected to be granted a bailout by the US government, said it “exercised its rights to terminate after Embraer did not satisfy the necessary conditions”.

2021 cruise bookings a bright spot for travel sellers, lines

Lindblad Expeditions’ National Geographic Endurance. “There’s not a mass exodus by any stretch of the imagination,” said CEO Sven Lindblad.

The strength of 2021 cruise bookings have been widely discussed by both Wall Street and the consumer media as a barometer of the industry's ability to bounce back.

Several industry executives and large travel sellers have suggested that those future bookings are evidence of a level of strength and resiliency.

The media's coverage of ships with Covid-19 outbreaks has left cruising arguably the hardest hit of any travel product. It was the first industry to shut down completely, and its resumption will depend on the easing of regulatory and port restrictions. Strength or weakness in future cruise bookings might be the best way to gauge how deep a hit cruise has taken and how quickly it can recover.

Even if a large percentage of 2021 cruise bookings are future cruise credit (FCC) redemptions, the fact that they are being chosen over a refund indicates "resilience in a desire to book a cruise," said UBS analyst Robin Farley.

Citing data from what she called one of the largest cruise sellers, Farley said in a note to investors this month that "booking volume in the last 30 days for 2021 is actually up 9% versus the same time last year."

Farley's source reported that 76% of those who cancelled their cruises this year are taking the option for an FCC.

Some of the largest cruise sellers, including Cruise Planners and Cruise.com, also reported positive 2021 booking trends.

Cruise Planners CEO Michelle Fee said the company is "experiencing a strong 2021," with many FCC bookings but also clients who are pushing summer and fall bookings ahead and brand new bookings.

"A large volume is not necessarily FCCs," she said.

Anthony Hamawy, President of Cruise.com, said the company is seeing what he describes as a continuation of strength in 2021 bookings that started at the beginning of this year and has been boosted by clients using FCCs mostly in 2021.

Several cruise line executives said they are also seeing some 2021 strength.

"I can assure you we are also getting new bookings from customers who are not necessarily using an FCC," said Carnival Cruise Line's senior vice president of global sales and trade marketing Adolfo Perez.

Carnival Corp. CEO Arnold Donald said during an interview on CNBC's "Closing Bell" on April 14 that 2021 bookings were "strong."

"People are booking," Donald said during a subsequent media call. "They're booking for '21, in '20 -- people are booking this summer still. So there is demand."

Sven Lindblad, CEO of Lindblad Expeditions, said that clients are holding onto their bookings.

"A lot of people who were not able to travel now are simply rebooking for next year," Lindblad said. "Not all, obviously, and some are saying, 'We want to rethink it.' But we certainly aren't getting a lot of cancellations beyond the summer and into 2021. The new activity is not as robust as it would be normally; we all lost the Wave season, but there's not a mass exodus by any stretch of the imagination."

Lindblad said that even bookings on trips in the "relative near term" are holding up.

"We're getting some cancellations, but it's amazing how few compared to what it could be," he said.

Viking said in a statement that as of mid-April, its 2021 bookings are 20% ahead of 2020 bookings at the same point in time: "As a result, we have also opened additional inventory on our 2022 river and ocean itineraries. Our new Mississippi River cruises, which launched less than a month ago are selling well for the inaugural 2022 season, and there are several sailing dates that are already sold out. These bookings are driven largely by the hard work of our travel partners, and it is a testament to the resilience of our industry."

The stock market hit a factor for cruisers

Mark Conroy, Silversea Cruises' managing director of the Americas, said it's been a "mixed bag."

Members of the line's loyalty program and past passengers "are taking the FCC"; some who already had 2021 cruises booked are even pushing them into 2022.

Clients who are newer to cruising "have been more nervous, and they're the ones that have cancelled and want the refund because they don't know the company very well and they're not sure they want to travel again," he said. "That will wear off over time."

As of now, he said, many remaining 2020 cruises are well booked.

"The good news is before all this happened, 2020 looked like it was probably going to be the best year in our history," he said. "We still have our third- and fourth-quarter cruises that are booked well enough that we'd want to operate them if we're allowed to."

Conroy said that at the luxury level, clients are concerned about their stock portfolios, which might have suffered significantly during the crisis.

Deborah Deming of Frosch Classic Cruise & Travel in Woodland Hills, Calif., said that is a major concern with her upscale clientele.

"If you're 60 to 75 years old and $40,000 in the game with [a luxury line] and someone says you can have your money back, and you just saw your portfolio go down by $200,000, you want that money," she said.

Another factor, Deming said, is clients' concern about the cruise lines' viability and whether it's wise to leave such large amounts of money with them, something Conroy is also aware of. "That's why it's important that people know we're part of [Royal Caribbean Cruises Ltd.]," he said.

Tom Baker, president of CruiseCenter, said that many clients moving cruises into 2021 are doing so with suppliers that aren't offering a refund, so it's a "forced move."

"The biggest piece that is moving over now is the river cruise market, more than anything else because they are not offering refunds," he said. "[Clients] don't have a choice."

Among clients who do, he said, about half have picked departures for the following year, and some are waiting to see what happens. Indicating some 2021 strength, Baker said he's had to tell clients to book certain itineraries now.

"If you don't pick something and you're late to the game, you might miss out," he said, citing Viking as one of the companies that seem to be very well booked next year, in part because they are only offering refunds on cruises that are cancelled. For future dates, if the client doesn't want to go, they have to move the money to the following year.

Baker said that no matter what, he puts his clients first, even it means telling them not to use an FCC.

"I'm not going to talk anyone into taking a trip," he said. "If they want to cancel and a vendor is willing to give the money back, take the money. There will be tomorrow and there will be beautiful trips to plan once we're past this. And I will be here to help them."

Norwegian Makes Moves on Ship Finance Deals; Gains $386 Million

Norwegian Cruise Line Holdings has amended the export-credit backed facilities that finance Norwegian Bliss, Norwegian Breakaway, Norwegian Encore, Norwegian Escape, Norwegian Getaway and Norwegian Joy to incorporate the terms of a 12-month debt holiday initiative offered to the cruise industry by Euler Hermes Aktiengesellschaft, the official export credit agency of Germany, according to a statement.

The debt holiday was initiated to provide interim debt service and financial covenant relief for borrowers during the current global COVID-19 pandemic with respect to their Hermes guaranteed financings. Across the facilities, these amendments provide approximately $386 million of incremental liquidity to the company through April 2021.

Royal Caribbean Works Financing Options on 5 Ships for $250 Million

Royal Caribbean Cruises announced it had made changes to the export-credit backed loan facility incurred to finance Quantum of the Seas in order to incorporate the benefits of a 12-month debt holiday initiative being offered by Euler Hermes Aktiengesellschaft, the official export credit agency of Germany.

"As we have previously disclosed, the intention of this initiative is to provide interim debt service and financial covenant relief during the current global health crisis to cruise-line borrowers with respect to their Hermes-guaranteed financings," Royal Caribbean said, in a regulatory filing. 

Under the terms of the amendment, the lenders have made available to us a new tranche of the loan, the proceeds of which will be used to repay any principal amortization payments due on the facility between April 1, 2020 and March 31, 2021.  

The lenders have also agreed that, during the Deferral Period, a breach of the financial covenants will not trigger a mandatory prepayment under the facility.

In addition, the company announced it had amended the export-credit backed loan facilities incurred to finance the Celebrity Eclipse, Celebrity Equinox, Celebrity Solstice and Celebrity Silhouette in order to incorporate the benefits of the Debt Holiday.

"Across the Quantum facility described above and these four facilities, the Debt Holiday amendments will generate approximately $250 million of incremental liquidity through April 2021. This is in addition to the $200 million of incremental liquidity previously disclosed realized in connection with the implementation of the Debt Holiday across certain other Hermes-backed facilities," the company said.

Expedia to raise $3.2bn funding ‘to survive’

Expedia to raise $3.2bn funding ‘to survive’

Expedia has named group vice-chairman Peter Kern as new chief executive and announced moves to raise $3.2 billion in funds.

Kern has been running Expedia with chairman Barry Diller since the removal of former chief executive Mark Okerstrom in December.

The $3.2 billion in new capital will come via a $1.2 billion investment by private equity firms Apollo Global Management and Silver Lake and $2 billion in new debt.

Apollo Global Management and Silver Lake will each receive a seat on the Expedia board.

The group also announced acting chief financial officer Eric Hart will take the role permanently. Hart took over from former chief financial officer Alan Pickerill, who left alongside Okerstrom.

Expedia said it would seek government aid in countries where it could and announced the furlough of employees and reduced hours of others, initially to the end of August

The group said executive salaries would be cut by 25% and board members be paid nothing for the remainder of the year.

In February, Expedia announced the loss of 3,000 jobs, 12% of its workforce, as Diller pronounced: “We are stopping doing dumb things.”

In a statement yesterday Diller said: “We have one mandate to conserve cash, survive and use this time to reconstruct a stronger enterprise.

“We are unable to make any predictions as to when travel will rebound but emphatically believe that it will.”

The $2 billion in debt will be raised through the issue of ‘senior unsecured notes’ (bonds) and is expected to close on May 5.

In a statement, Expedia said: “These efforts are part of a comprehensive strategy to enhance Expedia Group’s financial flexibility and strengthen its liquidity position.

Kern has been a member of Expedia’s board since 2005 and vice chairman since 2018. He was chief executive of Tribune Media until September 2019 and is a managing partner of private equity firm InterMedia Partners.

Hart has been with Expedia for 11 years and chief strategy officer since November 2019. He previously ran Expedia’s CarRentals.com brand for three years of oversaw corporate strategy.

Kern said: “Between the significant steps Expedia Group continues to take to simplify the business and this new funding, we are in a better position to rise to the current challenge and come out even stronger. We understand the financial challenges ahead.”

Norwegian Cruise Line Holdings brands extend the suspension of sailings

Norwegian Cruise Line Holdings brands extend the suspension of sailings

Norwegian Sky leaving the Port of Miami, photo credit Dave Jones

Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises have extended the suspension of all cruises until June 30.

The Norwegian Cruise Line Holdings brands extended the current extension from May 11 as they bid to help stem the spread of Covid-19.

The company said it will continue to work with the US Centers for Disease Control and Prevention (CDC), the federal government and global public health authorities to take “all necessary precautions” to ensure the health, safety and security of guests, crew and the communities it visits.

“We are committed to taking all appropriate actions to combat the spread of Covid-19 and, as such, have extended our global voyage suspension through June 30,” said Frank Del Rio, president and chief executive of Norwegian Cruise Line Holdings. “We continue to work closely and in partnership with the US CDC, global public health authorities and local, state and federal governments to build upon our already rigorous health and safety protocols to ensure that our brands are ready to safely resume operations with these new protocols in place.

“Our teams are working around the clock to do what is right by our loyal guests and valued travel partners and we greatly appreciate their understanding as we continue to adapt to the ever-evolving global health environment.”

Guests who are booked on voyages with embarkation dates between May 11 and June 30, 2020, on Norwegian Cruise Line, Oceania Cruises or Regent Seven Seas Cruises are asked to contact their travel agent or the cruise line for more information.

Passenger ship flooring: LED, sustainability and safety

Recent cruise ship flooring products include new design features such as LED and an even greater green focus

New design features and an increased focus on safety and sustainability are some of the latest trends to be found within cruise ship and ferry flooring and decking.

Bolidt has added to its Bolideck range of ship deck covering solutions, with the first delivery of Bolideck LED leading to follow up orders from several owners.

Bolideck LED features integral LED lighting, and its first installation was on board 2,894-passenger capacity TUI Cruises vessel Mein Schiff 2.

Bolideck LED has been deployed in a bar and passenger access areas on Mein Schiff 2. It is also part of a ‘floor diamonds’ artwork on the ship, developed in partnership with ICArt and design studio SOFTlab.

The novel artwork floor installation required close co-operation between the shipyard Meyer Turku, Bolidt and SPT Finland, while the vessel was under construction at the Finnish yard. The project’s success depended on fitting the LED lighting with the right sequencing and at the optimum time in the production process to enable Bolidt to complete the striking flush decking finish.

“Feedback from passengers and crew on Mein Schiff 2 has been very positive,” says Bolidt maritime division director Jacco van Overbeek. “Following on from this initial installation, Bolideck LED has attracted a lot of interest within the market and has been specified for several additional cruise vessel projects, with installations due to take place over the coming year or so.”

He says Bolideck LED offers designers a high degree of flexibility as it is available in a wide range of different formats. This allows the client to integrate LED lighting within a larger deck space or deck design, or alternatively to create specific functional features, in sports courts or exits for example. Bolideck LED also allows deck lighting to be programmed to form different patterns or to vary the intensity of individual LEDs. Bolideck LED lighting can also be made invisible when turned off.

“With any number of lighting patterns possible, Bolideck LED brings additional freedom of expression for cruise ship interior designers. But it could also be used to enhance safety,” adds Mr van Overbeek. “As with all our products the important thing is it can be seamlessly integrated with other systems onboard.”

Along with Bolideck LED, Mein Schiff 2 features over 10,000 m2 of Bolidt products on board. Other products used include Bolideck Future Teak, Bolideck Select Soft and Bolideck Select Hard.

Bolideck LED was developed in-house at the company’s research and development centre. Mr Van Overbeek says “In these uncertain times we need innovation more than ever before and, in this regard, Bolidt has a unique track record that will help it and its partners in the maritime sector find a way forward.”

Brittany Ferries, MSC, Ultramar

Elsewhere, Gerflor has supplied its Streamo floorings to cruise and ferry passengers, with its recent projects spanning the Mustay Karim Russian river cruise ship, the new LNG-powered ferry for Brittany ferries, Ultramar’s two latest fast ferries and MSC Grandiosa.

Gerflor product manager Karine Bouttier tells sister magazine Passenger Ship Interiors & Refurbishment Review “Their interiors will be enhanced with Streamo Karavel luxury vinyl tiles, offering a wide palette of wood and mineral designs but also with homogeneous floorings, available in more than 60 colours.”

Streamo is Gerflor’s dedicated range for marine IMO applications. This includes homogeneous floorings with patented surface treatment, decorative luxury vinyl tiles and a wide offering of additional finishes and accessories (skirtings, stair nosings etc). Gerflor can also supply wall protection, entrance matting and all the tools needed for optimal installation.

The company is expanding its products with a soon-to-launch IMO adhesive, a new non-directional homogeneous flooring and a rubber studded tile.

The sustainability trend within the passenger ship industry can also be seen in Gerflor’s processes. Ms Bouttier says “In line with our strong commitment to sustainable development and a focus on innovative solutions, Gerflor can supply pre-cut pieces for all crew cabins, enabling our customers to facilitate the installation process, save time and costs, and significantly minimise waste.”

She highlights how the company is forging links between onshore and maritime flooring. “Working in close co-operation with our customers and our internal group studio design, we try to bring more designs and reduce the frontiers between land-based buildings and the marine market to make the passengers and crew feel at home.”

Creating green solutions

Last year Sika launched a new visco-elastic technology, VEM X, used for damping structure-borne noise. Sikafloor Marine VEM X is a one-component polymer modified cementitious product that can be used instead of polyurethane-based products bringing identical product damping characteristics.

Using Sikafloor Marine VEM X also means delivery to the shipyard is easier as there are no dangerous goods to transfer. Polyurethane-based products must be delivered to special waste stations as they are a chemical product.

Sikafloor Marine VEM X is patented by Sika, which is in the process of phasing out its polyurethane-based PU-Red solution and replacing it.

Sika Services corporate head of marine Oscar Ovejero says “The idea was to create a green solution. Companies in the past used PU, but this is no longer welcome in the industry, so we started this project. What we have now is a one-component, elastic cementitious compound with an acoustic performance at the same level as before. The new product is faster to install and uses cheaper raw materials, benefiting the customer, and the waste is a paper bag and not metal.”

“We have provided a new solution in sustainability, price, installation and service.”

The company has also developed a complete product line of artificial teak exterior floors and interior decorative floors, constructed from resin. These have recently been installed on the passenger tourist ship Enhydra in San Francisco, carried out with Canada-headquartered A&A Installations, and have also been installed on cruise ships being built at Meyer Turku.

Mr Ovejero says “Our resin exterior artificial floors offer faster application than PVC or wood as there are no joints in between. The continuous waterproof membrane can also be used as a levelling compound.

He highlights the freedom of design and colours for the floors. “There is a lot of freedom in design in term of logos and cutting plane. We have 15 colours in total, and different colours can be combined.”

He says the colours have been tested by Sika for over 5,000 hours and the results show the “colours are stable, there are no surface cracks and it is easy to refresh the surface.”