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The difficult recovery of the Mediterranean cruise sector



           

Along with the Caribbean, the Mediterranean is one of the two global cruising spots. Stopped for several months due to the Covid-19 epidemic, the sector is timidly trying to restart the activity. version française



The MSC Grandiosa is the first giant of the seas to have resumed its activity (photo: MSC).
The MSC Grandiosa is the first giant of the seas to have resumed its activity (photo: MSC).
MEDITERRANEAN. Some companies are offering cruises again, but under draconian sanitary conditions. Out of the four giants capturing most of the market (Royal Caribbean Cruises, Norwegian Cruises, MSC Cruises and Carnival, which owns among others Costa), only MSC Cruises has tried the adventure since August 2020. https://www.econostrum.info/Les-croisieres-reprennent-timidement_a26978.html
 
The Swiss-Italian company has opened bookings to all Europeans in the Schengen area, with a route that includes Italian and Maltese ports. The MSC Grandiosa left Genoa on 16 August. MSC Cruises had limited, but failed to reach, the gauge to 4,500 passengers, a load factor of 70%.
 
MSC Cruises continues to offer on-board activities, but adapted to the need for social distancing. Buffets have disappeared in favour of table service, with temperature checks before entering the dining room. The company anticipated the worst. If a Covid case was declared on board, it negotiated with all ports of call to allow the patient to disembark for treatment or repatriation. 

 

Local cruises with local passengers

Covid alert on the Mein Schiff 6 during a cruise in Greece (photo: TUI Cruises)
Covid alert on the Mein Schiff 6 during a cruise in Greece (photo: TUI Cruises)
The other companies that have resumed their activities limit boarding to local customers for the time being. Like MSC, Costa tests all its customers at boarding (scheduled arrivals) and limits "outings" to the excursions it organises. For the time being, the shipowner reserves its cruises for Italians.
 
Same caution for the Germans of TUI Cruises. Two ships have returned to sea, with a maximum tonnage of 50%, then 60%. On the programme to begin with, the Nordic coasts without stopovers from German ports, and in the cabins, only Germans. A third liner has been added to the offer since September 2020, departing from Greece, with customers arriving from Germany by charter flights. A failed cruise, as the Mein Schiff 6 (900 passengers) received positive results at the end of September in Covid-19 for a dozen crew members. The ship immediately anchored off the island of Milos before reaching the port of Piraeus. New tests proved negative on Monday 28 September, but for the moment no one is disembarking pending instructions from the Greek authorities.

Shipowners specialising in smaller vessels have proved to be less cautious. Which seems logical. Accustomed to extreme lands, Ponant has fallen back on France with cruises organised from July 2020. The modest size of the Ponant ships guarantees a "health and social bubble". Thus, on Monday 24 September, two cruise ships dropped anchor in the port of Bastia, the Lyrial (Le Ponant) and La Belle des Océans (Croisieurope).

 

The whole sector suffers

According to the International Cruise Line Association (CLIA), the cruise industry lost €50 billion between March and September 2020. More than 300,000 employees have been directly impacted by the sudden cessation of all activity.
 
The companies are suffering the most, but this situation also penalizes dozens of professions: coach operators, travel agencies, port professions, guides...
 
For the moment, only two shipowners have filed for bankruptcy: Pullmantur and Cruise and Maritime Voyages. Owned 51% by Cruises Investment Holding and 49% by Royal Caribbean Group, the Spanish company Pullmantur owns a fleet of three ships, the Monarch, the Sovereing and the Horizon. They will end their life in a Turkish demolition yard. The six ships of the British Cruise and Maritime Voyages are to be auctioned off.
 
The giants of the sector have their backs to the wall. Carnival has raised $10bn (€8.5bn) on the financial markets, Norwegian Cruise Line $2bn (€1.7bn). Even at a standstill, a fleet is expensive, in the order of several hundred million dollars per month. It is therefore time to sell or demolish it. Carnival thus separates itself from about fifteen ships.
 
The shipbuilding sector is also hard hit. No or few cancellations in the French, Italian, German and Scandinavian yards, but a staggering of deliveries and payments for the 118 liners ordered and theoretically deliverable between 2020 and 2027. The European States are participating in this financial effort through loans.

 


Gérard Tur


Tuesday, September 29th 2020



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