With just one ship now sailing, Carnival loses $2.9 billion in Q3

Carnival Corp. lost $2.9 billion in the quarter ended Aug. 31, as the pandemic’s near-total shutdown of the cruise industry continues to block most of its business.

The world’s largest cruise company did get one ship slowly back into action this month, bringing Italian passengers aboard a seven-day cruise on its Italian Costa subsidiary, and has another such trip scheduled to leave Saturday. Costa will gradually open up its cruises to European residents, while Carnival’s AIDA subsidiary also expects to resume operations this fall, after Italian regulators blocked its August attempts to bring passengers back.

But these European forays aren’t enough to offset the total shutdown of cruising in the United States, which (as part of North America) accounts for about half of the industry’s customers. U.S. cruises aren’t expected to resume before at least November; the U.S. Centers for Disease Control and Prevention has extended an industry “no sail” order through the end of September, and U.S. operators have voluntarily agreed to suspend operations through at least the end of October, according to industry trade group Cruise Lines International Association.

Its inching European restart can’t fully staunch the financial bleeding for Carnival, which burned an average of $770 million every month in its third quarter. The company says it expects to bring that monthly burn rate down to about $530 million in the fourth quarter, as it continues to get rid of older ships. Carnival now plans to sell or scrap a total of 18 ships, or 12% of its pre-pandemic capacity.

“We continue to take aggressive action to emerge a leaner, more efficient company,” Carnival CEO Arnold Donald said in a press release.

The company, which ended the quarter with $8.2 billion of cash and cash equivalents, also said Tuesday that it would sell up to $1 billion in shares to increase its liquidity.

Carnival shares fell about 7% Tuesday morning, to $16.60 per share, after the company released its preliminary financial information for the quarter ended Aug. 31.

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