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Carnival to resume trips in phases, emerge as a 'leaner' company

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Carnival said on Friday it was planning to resume operations in a phased manner and would operate with a smaller fleet on its return, months after suspending trips due to the Covid-19 pandemic, sending its shares up about 5 per cent.

[BENGALURU] Carnival said on Friday it was planning to resume operations in a phased manner and would operate with a smaller fleet on its return, months after suspending trips due to the Covid-19 pandemic, sending its shares up about 5 per cent.

The world's largest cruise operator also said it has reduced capital expenditures by more than US$5 billion over the next 18 months.

"We will emerge a leaner, more efficient company to optimise cash generation, pay down debt and position us to return to investment grade credit," chief executive officer Arnold Donald said.

The cruise business has been one of the worst hit after several ships, including some owned by Carnival's Princess Cruises, became coronavirus hotspots, killing some on board and forcing port quarantines for several crew and staff.

To survive through the crisis, companies, including peers Royal Caribbean Cruises and Norwegian Cruise Line Holdings, have raised billions through various means, even pledging ships and private islands.

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Carnival alone, raised over US$10 billion through a series of financing transactions since voyages were paused.

The company expects future capacity to be moderated by the phased re-entry of its ships, while some ships in its fleet could be removed and new deliveries would be delayed, Carnival added.

In total, the 13 ships expected to leave the fleet represent a nearly 9 per cent reduction in current capacity, and the company expects only five of the nine ships originally scheduled for delivery to be delivered.

On Thursday, Carnival said it would resume voyages run by its German cruise line AIDA.

The company's shares were trading at US$15.26 on the New York Stock Exchange.

REUTERS

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