Royal Caribbean loses $1.6bn in second quarter due to Covid

Royal Caribbean Group has reported a net loss of $1.6bn (£1.2bn) for the second quarter of the year, after the coronavirus pandemic caused the cruise operator to cancel all sailings during that period.

The group, which operates brands including Royal Caribbean and Celebrity Cruises, made a $473m net profit during the same period in 2019.

The company, which suspended all of its voyages globally on 13 March, said the Covid-19 pandemic was posing an “unprecedented challenge” to the cruise industry.

Royal Caribbean is burning through between $250m and $290m cash a month, while its ships are not sailing, because of ongoing costs including operating and administrative expenses, and commitments to build new vessels.

The company is looking at ways to reduce its outgoings in case it takes longer to restart cruises, and said it had taken “substantial actions” to bolster its financial position, including raising new debt secured on some of its ships.

The group, which dropped “Cruise” from its corporate name in July, wants to resume some operations at the start of November.

Royal Caribbean is using the current period to make its operations more efficient, said its chief executive, Richard D Fain.

“Our teams are working tirelessly to return to service soonest and doing so by developing new health and safety protocols to protect the well-being of our guests, crew and destinations we visit,” Fain said.

Royal Caribbean said bookings for the remainder of 2020 were “meaningfully lower” compared with 2019, although bookings for 2021 were going in the right direction.

It has tried to encourage customers to move their cruise to the same sailing the following year, rather than giving them a refund, although about 48% of passengers booked on cancelled trips had requested their money back.