Norwegian Cruise Line Holdings Ltd. extended a suspension of global cruising through the end of September, dashing the stock market’s hopes for a return to service months after the Covid-19 pandemic shuttered the industry.
The company said the few exceptions were Seattle-based Alaska cruises set to sail in September. The company also is canceling some voyages in October, including Canada and New England trips.
Cruise industry stocks fell in after-hours trading Tuesday and extended declines into Wednesday, with Norwegian plunging as much as 11% in the premarket session. Carnival Corp., the market leader, dropped 5.6%, and the news also weighed on airline stocks.
The eventual return of cruising presents passenger-enjoyment challenges as well as health ones, Deutsche Bank analyst Chris Woronka wrote in a note Wednesday. He said industry contacts are concerned that cruise companies might have to offer “a diluted sailing experience that is so limited and foreign in substance that it ultimately results in a lower propensity to return.”
Cruise stocks had been staging a remarkable recovery in recent weeks on prospects that the industrywide shutdown could come to an end as soon as August. The capital-intensive companies have raised billions of dollars from stock and high-interest-rate debt offerings to weather months without customers.
But a resurgence of Covid-19 cases in places such as South Florida, home of the world’s largest cruise port, could be weighing on prospects for a return.
This article was provided by Bloomberg News.
