Carnival Cruise Line says it will sail again Aug. 1, a week after coronavirus no-sail order due to expire

Key Points
  • Carnival Cruise Line will resume service beginning Aug. 1, the company announced Monday.
  • The U.S. Centers for Disease Control and Prevention says cruise ship travel "exacerbates the global spread of Covid-19."
  • The CDC "recommends that travelers defer all cruise travel worldwide," according to its website.
Carnival's Breeze cruise ship leaves the Port of Miami.
Christina Mendenhall | Bloomberg | Getty Images

Carnival Cruise Line announced plans Monday to resume service beginning Aug. 1, despite concerns from the Centers for Disease Control and Prevention that cruise ship travel "exacerbates the global spread of Covid-19."

Carnival Cruise Line, which is owned by Carnival Corp., said it advised travel agents on Monday that eight of its ships will return to service on Aug. 1. Three of its ships will set sail from Galveston, Texas, the company said, and three others will sail from Miami. The company said two of its ships will sail from Port Canaveral, Florida.

"We are committed to supporting all public health efforts to manage the Covid-19 situation," the company said in a statement. "We are taking a measured approach, focusing our return to service on a select number of homeports where we have more significant operations that are easily accessible by car for the majority of our guests."

The company said all other North American and Australian cruises will be canceled through Aug. 31. The company said it will use that time to "engage experts, government officials and stakeholders on additional protocols and procedures."

Representatives of Carnival cruise line and owner Carnival Corp. did not immediately respond to CNBC's request for comment.

Shares of Carnival pared losses on the news. The stock was recently up less than 1% but has traded as high as $14.40 and as low as $12.75 Monday. 

In early March, as the virus spread rapidly among some cruise passengers, the State Department warned Americans against traveling by cruise ship. On March 14, the CDC issued a no-sail order for cruise ships and extended it on April 9 until July 24. 

The extension order said "that cruise ship travel exacerbates the global spread of Covid-19 and that the scope of this pandemic is inherently and necessarily a problem that is international and interstate in nature and has not been controlled sufficiently by the cruise ship industry or individual State or local health authorities."

At this time, the CDC "recommends that travelers defer all cruise travel worldwide," according to its website.

The CDC is currently reviewing plans from cruise lines for how they will prevent, detect, contain and respond to Covid-19 on potential voyages, CDC spokesman Scott Pauley said in a statement to CNBC. 

"At this point in time, we do not have enough information to say when it will be safe for cruise ships to resume sailing," he wrote in an email. "CDC will continue to work with cruise lines to ensure all necessary public health procedures are in place when cruise lines do begin regular sailing."

Carnival later updated their announcement to reflect that the company is cooperating with government officials and will encourage social distancing guidelines on ships that set sail. 

On Friday, the U.S. House Committee on Transportation and Infrastructure called for Carnival Corp. to hand over a slew of documents related to its response to coronavirus outbreaks on its ships that infected more than 1,500 and killed dozens of people. 

The committee, which says it has jurisdiction over maritime transportation issues, described cruise ships as "a fertile breeding ground for infectious diseases."

"We would hope that the reality of the Covid-19 pandemic will place a renewed emphasis on public health and passenger safety, but frankly that has not been seen up to this point," the letter sent to Carnival CEO Arnold Donald said. "It seems as though Carnival Corporation and its portfolio of nine cruise lines, which represents 109 cruise ships, is still trying to sell this cruise line fantasy and ignoring the public health threat."

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Representatives of the Cruise Lines International Association, of which Carnival is a member, did not immediately respond to CNBC's request for comment.

Jackie Ceren, a travel agent based in Florida, said she has clients who have been waiting for weeks to book despite the public health concerns. She added, however, that she's not sure the ships will actually set sail so soon and would be hesitant to advise her clients to book.

"It's going to all depend on what's happening with this virus. I do have people waiting. People do really want to get back on ships," she told CNBC. "But if people book and they end up having to cancel these cruises, no one's going to be happy. [Carnival is] making it worse, I think."

The company is eager to get back to service. In an April 14 interview with CNBC, Donald said he has high hopes for how the industry will bounce back after the coronavirus pandemic.

"Travel is going to return, travel and leisure, and when it does, we'll return with it. Social gathering at some point will return, and when it does, people will want to cruise," he said on CNBC's "Closing Bell."

With the industry at a standstill, Carnival and its competitors have taken steps to ensure liquidity through what could prove to be a lengthy low- or no-revenue situation. In March, the company fully drew down its $3 billion revolving credit facility. Last month, the company announced it was raising about $6 billion by issuing a mix of debt and equity.

In early April, the Saudi sovereign wealth fund disclosed an 8.2% stake in the cruise operator, which sent shares temporarily soaring amid a broader freefall. Carnival shares, which have a market value of $10.5 billion, are down nearly 73% since the start of the year. 

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