Disney Cruise Line last week became the latest of many cruise lines to announce the delay of a cruiseship newbuilding due to Covid-19.
Industry analysts said these delays are working to the advantage of the cruise lines as the prolonged pause in their operations looks set to continue into 2021.
The official cruise line of Mickey Mouse said cruise customers will have to wait until sometime in 2022 for the newbuilding Disney Wish to come sailing in.
Christine McCarthy, senior executive vice president and chief financial officer of parent The Walt Disney Co, revealed at a virtual conference last Thursday that shipbuilder Meyer Werft will miss the planned December 2021 delivery date for the 135,000-gt cruiseship.
McCarthy attributed the delay to supply chain disruptions caused by the coronavirus pandemic, and said discussions with the shipyard to finalise dates were ongoing.
She also said it was unclear when Disney, which has four ships on the water, will resume operations.
The delays and uncertainty that Disney is facing are the same that are faced by many other cruise lines that have vessels on order at European shipyards that, together with subcontractors and suppliers, have been affected by the pandemic.
Almost all the newbuildings that are currently under construction for cruise majors, such as Carnival Corp, Royal Caribbean, MSC Cruises and Genting Cruise Lines, have experienced delays of various lengths, as have orders from smaller operators and expedition cruise companies.
In a bullish cruise market such delays would be deemed unacceptable and result in high-priced lawsuits, compensation claims.
While neither the lines nor the builders have released details on what sort of compensation packages have been negotiated, industry observers familiar with the situation suggest that in the current environment, discussions have been amicable.
Delays with ships that are due for delivery in the immediate future have worked to the cruise lines’ advantage. That is because the prolonged industry shutdown would have left operators shouldering the mortgage bills and operating costs of ships that would have gone straight into lay-up for a prolonged period.
It is not a prospect that any company already haemorrhaging cash would want to be in.
One cruise line executive told TradeWinds that the costs start accumulating the moment the cruise line takes over title to the ship.
As long as a ship remains the property of the shipyard, the cruise line does not have to begin making mortgage payments nor bear responsibility for insurance, crewing, maintenance and other operating costs. Those remain the responsibility of the shipyard.
“That takes a major weight off any chief financial officer,” the executive said.
“Nobody wants to be in a situation like Virgin Voyages, who for eight months have been paying for an expensive cruiseship that has yet to carry a commercial customer.”
Delivered by Fincantieri in February, Virgin’s 108,100-gt Scarlet Lady crossed the Atlantic to begin its first voyage from Florida in March, only to see that voyage and all future cruises cancelled because of the pandemic.
Even delays with later deliveries, such as the Disney Magic, will likely be welcomed by cruise operators, whose senior executives have said they believe the cruise sector will experience a slow, staggered recovery.