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May 4, 2020

Carnival dangles US$28-a-night fares for planned Aug. 1 restart

The Carnival Corp. Royal Princess cruise ship sits docked outside the Port of Los Angeles in Los Angeles, California, U.S., on Sunday, March 8, 2020. The Centers for Disease Control and Prevention (CDC) issued a no-sail order to the Royal Princess as officials warned Americans over the weekend to avoid cruise ships. Photographer: Tim Rue/Bloomberg

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Carnival Corp. plans to resume sailing on Aug. 1, becoming the first major cruise operator in the Americas to outline a return to operations after coronavirus outbreaks on several ships shuttered the industry.

The company’s flagship Carnival brand said Monday it will restart initially from Galveston, Texas, and Miami and Port Canaveral, Florida. Departures from other home ports in North America and Australia are canceled through Aug. 31, and other pauses will last even longer.

With several states starting to reopen their economies, the company is offering discounts of as little as US$28 a day to get customers back. Still, many questions linger about the safety of cruising. When the industry shut down in mid-March, coronavirus outbreaks at sea wreaked havoc by trapping passengers, some of whom died, and placing demands on local health-care systems at a critical time in the pandemic.

“We will use this additional time to continue to engage experts, government officials and stakeholders on additional protocols and procedures to protect the health and safety of our guests, crew and the communities we serve,” the company said.

The cruise industry has historically used discounts to attract customers, but the extent of the sale shows the crisis of confidence Carnival is trying to overcome.

As of Monday, the company was offering five-day cruises from Galveston, to Cozumel, Mexico, in early August starting at U$139, plus taxes, fees and port expenses. The base rate comes to about US$28-a-day including food, cheaper than staying home for many people.

Turned Away

The industry stoppage in March came only after ports around the world started turning ships away in fear of the virus. Several vessels lingered at sea for weeks as they sought a place to dock.

Although most cruise companies -- including Carnival -- have portrayed the pause in operations as voluntary, President Donald Trump tweeted that he personally intervened.

The coronavirus swept the cruise industry broadly, but Carnival -- the largest operator -- had many of the earliest and most dramatic viral episodes at sea. The Diamond Princess, part of Carnival’s Princess Cruises brand, at one time had the biggest coronavirus outbreak outside of mainland China as it floated off Yokohama, Japan.

Compared with some other brands in the portfolio, Carnival Cruise Line has been relatively unscathed by the pandemic. Along with Princess, Holland America Line has been at the center of international crises tracked round-the-clock by the news media.

A “no-sail” order from the U.S. Centers for Disease Control and Prevention is due to expire on July 24 after a 100-day extension of the agency’s original edict.

Investors applauded the plan to restart. Carnival shares rose as much as 4.7 per cent to US$14.58 after the announcement. The stock was down 73 per cent this year through last week.